America's Smartest Gamble: Legalizing Sports Betting
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Atlantic City (Ron Miguel, Creative Commons)
But sports betting reforms shouldn't end in this country after Governor Christie's decision to legalize sports betting in New Jersey.
According to the American Gaming Association, gamblers legally wagered between $80 and $90 million on last year's NCAA basketball tournament. The AGA also reported, however, that the aforementioned amount would have been less than four percent of illegal wagers on the tournament, mostly through online betting or offshore betting outside of Nevada.
Why is that? Due to the federal government outlawing sports betting in all states but Nevada, Delaware, Oregon and Montana, potential tax revenues that could be received either from online betting or having sports books in every state are non-existent. That came from Congress passing a law more than 20 years ago, called the Professional and Protection Act of 1992, which banned sports betting outside of states that were practicing it already. Now, Nevada is the only state that makes a significant amount from sports betting, as Las Vegas netted a cool $3 billion from it in 2012.
New Jersey lost a few trials in court to the federal government regarding this issue beforehand. But instead of trying to condemn states like New Jersey for trying to legalize sports betting, the federal government should approach it from a different direction.
If potential tax revenues from sports betting can help a state's economy, why shouldn't every state be allowed to open sports books? Shouldn't every state get to reap the same benefits from sports betting that only a few currently have?
Atlantic City has struggled to make a profit over the last decade. In fact, Atlantic City casinos are making at least $2 billion less in annual gaming revenue compared to 2006. The aftermath of Hurricane Sandy didn't help New Jersey's economy either.
The tax revenues that come from sports betting would help, but making Atlantic City a tourist attraction again would be huge for New Jersey. Sports betting drives people to casinos and hotels. People from the East Coast wouldn't travel to Las Vegas as much if another sports betting option was significantly closer. The boost of Atlantic City travelers would also greatly benefit local businesses.
This sounds too good to be true for all state governments, considering the federal government would probably want a slice of the pie from the tax revenues that the state would be receiving. But why stop at legalizing sports books in all states?
As was mentioned before, online sports betting is really where the money is. Online sports betting is a multi-billion dollar industry, yet the government doesn't touch a dime of it. In fact, $500 billion was wagered illegally on sports in 2012. Now that placing a bet is as easy as opening an app on a smartphone, that number will only increase.
If the federal government works with betting websites to make sports wagering legal, the government would be able to gain tax revenues from a previously untapped resource.
Look at the marijuana debate for example. Both marijuana and sports betting are involved in the lives of many people, and as a result have potential to make a big impact on this country's economy if legalized. Just like sports betting, only a few states are permitted to sell marijuana.
Legalizing marijuana not only would save the federal and state governments billions by not having to spend on measures to prevent the use and selling of marijuana, they also gain a lot of money through multiple revenue streams. Same with sports betting.
For sports leagues that are worried about legalizing sports betting, there hasn't been a fixed game or point-shaving scandal in any of the four major American sports since 1954. Yes, despite billions of dollars bet on sports legally in Las Vegas, there hasn't been a single person convicted for fixing a professional game in 60 years in the U.S.
The repercussions of going to jail and being disgraced by the sports community are too large to throw games for money, especially since athletes are paid quite handsomely.
In fact, sports leagues should focus on the fact that betting only drives interest toward their sport. Yet, isn't it hypocritical that sports leagues condemn betting, but promote fantasy sports?
A decent percentage of fantasy leagues involve money or require a buy-in. While it can be difficult to monitor whether every fantasy league is free or for money, professional sports leagues support them nonetheless. And don't even get me started on how daily fantasy leagues can be legal, but not sports betting.
Sports betting in the U.S. is more mainstream than ever, and it's time for the federal government to adjust its stance and become part of the answer.
Reach Senior Sports Editor Max Meyer by email.
