Sports Betting Already Happens; Government Might as Well Regulate It
Fans already illegally place bets, so the government should step in
June 15, 2012
Recently, New Jersey Gov. Chris Christie announced that he will defy a federal ban on sports betting, hoping to let New Jersey residents legally bet on sporting events by fall of this year.
In California, the state senate recently approved Senate Bill 1390, which seeks to legalize sports betting in California at locations that have an existing license to gamble, including horse racing tracks, card rooms, and tribal casinos.
A stumbling block to legalizing sports betting in these two states (and others that would like to follow) is a federal law they will attempt to challenge. Passed in 1992, the law made sports betting illegal in any state that didn't already offer it.
Only Nevada, Oregon, Montana, and Delaware were allowed to offer sports betting once the law passed. Nevada could offer single game sports betting, while the others were limited to a sports parlay lottery. New Jersey was given the opportunity of exempting itself from the law since it was the only state that offered legalized casino gambling, but the state chose not to take the exemption.
Today the NFL, NCAA, and other sports organizations oppose sports betting, arguing that they are protecting the sports they represent by reducing the chance of a fixed game. However, most of their sports' fans participate in sports betting. Politicians say they are protecting the people from themselves by protecting them from the ills of gaming, but most participants in the sports betting industry would embrace regulation to prevent adverse effects of gambling.
In 2011, Nevada Sports books accounted for $140.7 million, only 1 percent of the total estimated $380 billion (yes, billion!) wagered illegally, untaxed, and unregulated to offshore operations by placing wagers on sporting events. These bets are placed today to personal bookies at stadium seats, on one's smartphone, or personal computer. Those who place bets on sports in the United States would prefer to place a bet with a licensed gaming company like Caesars Entertainment, MGM, or publicly listed European bookmakers such as Ladbrokes and William Hill. These companies have operated for years and have solid business models that set odds similar to a market on Wall Street, with statistics and analytics. But because of the existing situation, most bettors risk their money with unregulated offshore bookmakers, some of which have a reputation of not paying out winnings.
A consequence of the federal government not regulating the large sports betting industry is that states will challenge existing laws, knowing that sports betting is not only popular but out in the open. Point spreads and odds on every sporting match are available on ESPN and Fox Sports for examination before people make a wager on their favorite team.
Do we continue to let sports betting operate as is in the United States and let the marketplace dictate to what degree regulation will exist, or should the individual states regulate sports betting within their borders?