By Rachel Brody |
Legalizing sports gambling would obviously create new taxpayer costs for crime and would open the door to widespread Internet gambling. More subtly and most importantly, legalizing sports gambling would result in the creation of new Wall Street financials and catalyze a new speculative bubble similar to the 2008 debacle on credit default swaps. The financial "side-bets" of sports gambling need to be exposed as creating no product, having no real asset base, and "wearing no clothes." Emphasizing similar points, the website for 60 Minutes still carries the viewable news report "The Bet That Blew Up Wall Street," a.k.a. "Financial WMDs."
The congressional bipartisan U.S. National Gambling Impact Study Commission highlighted that gambling scandals have historically accompanied collegiate, professional, and even Olympic sports. Noting that the U.S. Congress had been misled into allowing legalized sports gambling in four states(Delaware, Montana, Nevada, and Oregon), the U.S. Gambling Commission recommended "that the betting on collegiate and amateur athletic events that is currently legal be banned altogether." Before, during, and after the U.S. Gambling Commission, this Recommendation 3.7 was actively supported by all of the U.S. professional and collegiate sports associations, which were concerned with the "integrity of sports," the potential for systemic corruption, and organized crime.
Throughout the last decade, multiple congressional bills were introduced to close the "Las Vegas Loophole," which allows Nevada sports gambling. Despite majority support in both the U.S. Senate and House of Representatives to close the loophole, the Nevada congressional lobby was able procedurally to derail all of these bills—in a disturbing testament to the monetary lobbying power of the Nevada gambling interests.
According to the medical, sociological, and psychiatric communities, gambling addiction parallels drug addiction. These medical similarities may be viewed in the 60 Minutes news expose, "Slot Machines: The Big Gamble." Sports gambling is also known as the "gateway drug" to gambling addiction. At 4 percent to 6 percent of their demographic, young people are already showing double the gambling addiction rate of the older generations. Therefore, the U.S. Gambling Commission recommended extensive efforts to educate young people regarding the problematic nature of gambling (Rec. 3.13), and the commission recommended the continued criminalization of Internet gambling (Rec. 5.1).
When states such as New Jersey and Illinois consider ignoring the federal ban on sports gambling, they broadcast to Washington, D.C., and to the world that they are scofflaw states—unfit for Fortune 500 companies who need stability of expectations. In all economic scenarios, but particularly in economic downturns, governments should demonstrate ethical and stable decision-making attributes. The emperor of sports gambling is wearing no clothes.
About John Warren Kindt Professor at the University of Illinois
Roderick D. Wright California State Senator
Gary Payne Managing Director of the International Sports Betting Association
Raymond J. Lesniak New Jersey State Senator