Implications of Sports Gambling Legality

Category: Baseball, Business, Football, Media, MLB, NFL, Sports

On May 15, the Supreme Court overturned a law against sports betting, which will have an indelible impact on the sports industry across the board. As a result of a 6-3 vote, the Professional and Amateur Sports Protection Act (PASPA) was ruled to be unconstitutional, and sports betting has now been legalized on a federal level.

This ruling does not come as a surprise to many. In fact, numerous government officials have been clamoring this decision for years. One example of this is Chris Christie, the former governor of New Jersey. Christie suggested that sports betting be legalized in 2011, in an attempt to revitalize the economy of New Jersey by providing a fresh injection of cash to the casinos in Atlantic City. Despite approval from New Jersey voters, the measure did not come to pass, due to objection from the four major leagues as well as the NCAA. The five entities cited PAPSA as their defense, which was a federal ban on sports gambling.

In 2014, Christie took this measure to the Supreme Court, saying that the matter of legalizing sports gambling was an issue that should not be decided by the federal government, but by the states themselves. On Monday, the Supreme Court agreed with this, and declared that states were allowed to make or not make sports gambling legal as they saw fit. Some states have been prepared for this ruling for a while; New Jersey, Delaware, Mississippi, and West Virginia have the means and the infrastructure for sports betting, but were waiting for a federal ruling. Other states are currently in legislation, and will add the legalization of sports betting to the agenda. In some cases, like that of Connecticut, a special assembly will be called in the wake of the ruling.

New Jersey and Connecticut do stand to gain a lot of money from this decision. Since 2014, five of the twelve casinos in Atlantic City have either changed ownership, been re-purposed, or have shut down altogether. The implementation of a sports book will undoubtedly bring in new revenue to the casinos, keeping them afloat and revitalizing Atlantic City. Connecticut has become a destination for gamblers off of the popularity of Mohegan Sun and Foxwoods. Bringing in sports betting will only increase its profile, and will likely play a large part in the impending decision to bring a casino to Bridgeport.

As mentioned earlier in this post, the four major professional sports leagues were a primary driving force in the blocking of sports betting being legalized in New Jersey. However, in 2014 and 2015, the NBA and MLB (respectively) took on new commissioners, both of whom had revolutionary stances on sports betting. Up to this point, everyone was aligned to a uniform point: gambling was a detriment to the integrity of the game, and the leagues should not get involved. NBA Commissioner Adam Silver and MLB Commissioner Rob Manfred saw things differently. Both agreed that sports betting could be lucrative for the leagues as well as the gaming industry, if a properly monitored system was put in place. Additionally, the illegality has not stopped sports gambling from occurring. Leaders in sports are starting to adopt an “if you can’t beat them, join them” approach, and feel it’s better to capitalize on what’s already in play.  Per year, at least tens of billions of dollars are gambled illegally on sports. With sports betting being legalized, leagues can stand to make “integrity fees”; if adopted, a one percent cut of money gambled on a given sport could go to the league. This is not an unfair ask; these leagues are putting on competitive matches that compel people to place bets on teams on a nightly basis.

Sports media stands to benefit greatly from this as well. Potential bettors will be doing research and flocking to team news sites, trying to get information to make the most informed bet possible. This increase in interaction can only raise the profiles of the leagues, and give them more power to negotiate with networks in the future. In an interview with ESPN, Mark Cuban extolled the virtues of the ruling, saying that “It will increase interest, it will add to what happens in our arena and in stadiums”, and that the decision “doubled the value of the professional sports franchises in a second”.

Daily fantasy sites have been a source of controversy among fans and leagues since their inception. Many states have outlawed sites such as DraftKings and FanDuel, categorizing them as illegal gambling. Since this ruling in October 2015, many states have legalized the gaming sites, franchises have used their signage during games, and leagues have allowed their commercials to be broadcast during games. Almost immediately after this ruling was passed, DraftKings issued a press release saying that they were integrating daily betting into their platform to supplement their existing fantasy contests. In the release, Jason Robins (CEO and co-founder of DraftKings) said that they were excited to bring this new technology to their massive audience, and that this would only serve to bring people closer to the game.

If there is one major question to be asked in the aftermath of this ruling, it is how this will affect the players. If sports betting is legalized, will athletes be able to pursue endorsement deals from companies that specialize in it? With the decision to legalize gambling in sports, we find ourselves on a new frontier. We have seen a hockey franchise come to Las Vegas, and the Raiders call it home beginning in 2020. Time will tell as to the impact that this vote will have on sports betting, and on sports as a whole. One thing is for sure – it is certainly an exciting time to be a sports fan.


-Matt Mellinger, Communications Coordinator