NBA Commissioner: Legalize and Regulate Sports Betting

NBA Commissioner Adam Silver took a surprising stance on sports betting in a November 13th opinion piece posted at the New York Times. In the statement, he argues that the National Basketball Association needs to rethink its long tradition of opposing any expansion of legalized sports betting in the United States.

His op-ed explains how the 1992 Professional and Amateur Sports Protection Act (PASPA) was enacted to prohibit individual states from legalizing betting on professional or amateur sports. Mr. Silver’s basic argument is that illegal sports betting is widespread despite decades of opposition from lawmakers and national sports leagues. It’s time to bring the activity out of the shadows so that we can effectively regulate it in order to protect the integrity of the sports and address problem gambling.

His argument reflects what proponents of legalized betting have been claiming for years – that it would make more sense to embrace sports betting, tax it and regulate it. Our nation’s efforts to ban sports betting have been miserable failures by every metric. Adam Silver points out that underground sports betting is estimated to be a $400 billion-a-year industry. What we’re doing simply isn’t working.

To be fair, the commissioner has made similar statements in the past. However, this is the first time he’s come out with an open letter to the public and made a serious case for legalizing sports betting. It comes during a time in which the sports leagues are simultaneously embracing online fantasy leagues (which are legal) and opposing New Jersey’s latest attempts to introduce sports betting in the Garden State.

One of the points Mr. Silver makes is that times have changed since the passage of PASPA. Since the law was enacted, an increasing number of states have embraced other forms of gambling. You can find brick-and-mortar casinos in most states today. Legal poker and casino games are within driving distance of most Americans. Internet gambling is becoming increasingly widespread despite the legal challenges on that front.

Now, daily fantasy sports is seeing explosive growth with the likes of FanDuel and DraftKings expected to pay out nearly half a billion dollars in winnings this year alone. There are clear differences between fantasy sports and traditional fixed-odds betting, but both involve winning and losing real money in the realm of sports.

The sports leagues obviously see the benefit in embracing fantasy sports. When you have a roster of players drafted from teams around the league, you have more skin in the game and are likely to tune into more games. It isn’t a far stretch to imagine how traditional sports betting could have the same effect on viewership.

Sports betting itself doesn’t have the dirty connotation it did just a couple decades ago. Sports writers routinely refer to the Vegas lines and expected betting handle for big games. The nation seems to be ever so slowly warming up to the idea of betting on professional sports.

The Argument Against Legalization

One of the popular arguments against legalization is that it is based on a false premise. Just because people are doing something anyways doesn’t mean you should legalize it. Murders and robberies are all too common in the US despite being illegal but you don’t see people claiming that we should legalize and regulate those “activities.”

What makes sports betting different is that it doesn’t inherently trample on the rights of other people. As the old saying goes “your rights ends where mine begin.” Legalizing sports betting would not lead to infringement on the rights of others. It would only expand the freedom of the individual.

Another argument is that regulation wouldn’t actually protect the integrity of the game. Match fixing would become even more problematic with betting shops located in every state. This may be a genuine concern, but it ignores the prominence of offshore online gambling. The internet allows for anonymous gambling with zero oversight.

Bringing the money to regulated bookmakers in the US would still give us a clearer picture of who was betting on games and make it significantly easier to identify suspicious betting trends. In the current black market environment, bookmakers have little incentive to cooperate with US authorities. In a legal environment, there would be strong incentives to cooperate with investigations and report suspicious betting patterns and line movements.

Sports betting opponents do raise some valid concerns however. The expansion of sports gambling would likely make it more alluring to a wide audience, which in turn could lead to great instances of problem gambling and match fixing. The industry could enact safety protocols to protect the vulnerable, but it’s hard to argue against halftime commercials for sportsbooks tapping into a much larger market than what any of us have ever seen. It’s difficult to predict what kind of an impact that would have on the prevalence of wagering.

Going Forward

This debate is likely to continue for some time, but it’s starting to look like we’re slowly heading the direction of legalization. The nation as a whole seems more open to the idea. On top of that, the sports leagues back powerful lobbying groups who have the ears of lawmakers.

If sports leagues start to take up Adam Silver’s position, there’s a very real chance that we see an expansion of legal sports gambling. These leagues have traditionally been some of the most active opponents to sports betting. If the leagues switch sides, we may very well see the momentum shift in a new direction.