Why It’s Time to End the Federal Prohibition on Sports Gambling

An estimated $90 billion will be bet on NFL and NCAA football games during the 2016-2017 season—yet only $2 billion will be done so legally. This discrepancy is a testament to the failure of the Professional and Amateur Sports Protection Act of 1992 (PASPA), a federal statute that outlawed sports gambling in the United States. Four states—Nevada, Oregon, Delaware, and Montana—were able to avoid this prohibition due to exemptions in PASPA that allowed states that had already legalized sports betting to continue to do so after PASPA was passed (although only Nevada allows traditional single-game betting). These exemptions have created a confounding legal landscape in which one state (Nevada) has a de facto monopoly on the multi-billion dollar sports betting industry.
Putting aside for the moment the constitutional issues implicated by PASPA’s enactment, PASPA is also simply bad policy. However well-intentioned the bill’s sponsors may have been, it is clear that PASPA has failed to achieve its three primary goals: (1) stopping the spread of state-sponsored sports gambling, (2) maintaining sports’ integrity, and (3) reducing the promotion of sports gambling among America’s youth. In fact, PASPA may have created more harm than good.
PASPA has not prevented sports gambling—it has simply diverted otherwise taxable state revenue to underground bookmakers and offshore sports betting websites. In a New York Times article published November 2014, NBA Commissioner Adam Silver stated that “despite legal restrictions, sports betting is widespread. It is a thriving underground business that operates free from regulation or oversight.” Silver went on to recommend what many lawmakers and even initial proponents of PASPA have come to realize that “sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”
Perhaps the most cited argument against the legalization of sports gambling is that it “compromises the integrity of the sport.” Notwithstanding the fact that match-fixing has continued to occur while PASPA has been in effect, this argument overlooks the fact that a regulated legal sports gambling industry would actually make match-fixing less likely to occur than under the current PASPA regime. This is because it is widely recognized that match-fixing is primarily conducted by illegal bookmaking operations and organized crime syndicates that will continue to persist whether or not sports gambling is legal, while the individuals who will be most affected by the legalization of sports betting (i.e. casual fans) are the ones who are least likely and least able to attempt to fix a match. In support of this assertion, Stefan Szymanski, an economist at the University of Michigan and an expert on sports and corruption, has stated that “legalizing [sports gambling] would actually help crack down on cheating….[L]egal bookmakers subject to government regulation have a powerful reason to keep sports honest, because nothing scares away customers faster than the suspicion that a game is rigged.”
Another major concern of PASPA’s sponsors was that legalized sports gambling would corrupt America’s youth. The issue with this argument is that sports gambling has become an inescapable part of American culture, including the proliferation of easily-accessible and unregulated online sportsbooks, around-the-clock daily fantasy sports commercials, and increased televised discussion of Las Vegas point spreads, it is clear that PASPA can no longer claim (if it ever could) to protect America’s youth from participating in sports gambling. Simply put, PASPA is not an effective form of legislation in the Information Age, where a sports bet can be placed quickly, easily, and anonymously by the click of a button. This argument is akin to the equally unfounded moral panics surrounding comic books in the 1950s and marijuana in the 1930s, which played on America’s fears surrounding subjects that they knew very little about. To continue to rely on outdated arguments to support such a statute is to ignore the realities of our current society, while depriving states the opportunity to reap the benefits of a multi-billion dollar industry.
When even the President of the United States admits to gambling on the Super Bowl, the validity and efficacy of PASPA must be called into question. It is simply not a realistic goal to try to eradicate sports gambling from the United States—it is a predominant part of American sports culture, and there is no evidence to suggest that it is going anywhere anytime soon. The only question is whether Congress chooses to allow illicit underground operations to continue to profit off this industry, or decides to bring this roughly $400 billion industry “out of the underground and into the sunlight where it can be appropriately monitored and regulated.” At a time when many states are struggling financially and looking for any opportunity to increase revenue, the country can no longer afford to shun the sports gambling industry based on unfounded and outdated principles. Whether the federal government likes it or not, sports gambling is here to stay—the least Congress can do is allow states to make a profit.
Charlie Peskowitz is a J.D. candidate, 2018, at NYU School of Law.