Turkeys vote for Christmas- Andy Brown

On August 7, major US sporting leagues (the National Football League, Major League Baseball, National Basketball Association, National Hockey League and the National Collegiate Athletics Association) filed a complaint in the US District Court for the District of New Jersey against that State’s plan to legalise sports betting. The US sports leagues allege that New Jersey’s passage of its Sports Gambling Law (N.J.S.A 5:12A-1) is unlawful under 1992’s Professional and Amateur Sports Protection Act (PASPA – 28 U.S.C §3701), which prohibits States from establishing sports betting ‘in recognition of the fact that the spread of state-sponsored gambling on the outcome of sports events would irreparably harm sports leagues and organizations’, as pointed out in the complaint.

By launching this complaint, the sports leagues are effectively putting PASPA on trial. Behind PASPA is a big assumption – that State-sponsored gambling would irreparably harm sport. As has been pointed out by Kevin Braig of Dismore & Shohl LLP in ‘Betting on the NFL Goes on Trial’, it will be up to the sports leagues to obtain a permanent injunction to prove that New Jersey’s plans will harm sport, as outlined in eBay v MercExchange (547 U.S. 388 (2006).

This could prove impossible. The National Gambling Impact Study Commission estimated that US illegal sports wagers total $380 billion annually. The FBI estimates that over $2.5 billion is illegally wagered on the NFL’s March Madness each year. In other words, sports betting is already taking place, but the authorities don’t know much about what bets are being taken, or how those bets are being arranged. Looking across the pond to the UK, the regulated market has helped detect corruption by analysing bets placed. In all cases, the corruption has involved agents acting for unlicensed bookmakers. The Gambling Act 2005 has actually helped sport and gambling operators work together to identify and prosecute corruption.

“The issue principally surrounds the activities of the unlicensed sector”, said Clive Hawkswood, CEO of the UK’s Remote Gambling Association (RGA) in a March 2011 interview with World Sports Law Report. “The focus should be on coordinating the efforts of national gambling regulators which already receive significant revenues from licensed betting operators to address regulatory matters”.

INTERPOL Secretary General Ronald Noble illustrated the global extent of illegal sports betting at a 1 March 2011 meeting of an IOC Task Force to tackle sports betting. He spoke about the success of a cross-border programme to tackle illegal sports betting ahead of the 2010 FIFA World Cup, involving four Asian countries. “In just one month, it resulted in more than 5,000 arrests from 850 raids, close to US$10 million in cash seized and US$155 million in illegal bets prevented”, he said.

It is also naïve to assume that US sports – due to their nature – are immune from the attempts of illegal bookmakers to corrupt. Most cases detected in the UK have involved ‘spot-fixing’ rather than attempts to fix games. This involves illegal bookmakers taking in-game bets on whether a player will make the next pass, or hit the next ball (and paying players to cooperate). Such in-game betting could be outlawed in a regulated market, protecting sport.

It is also worth pointed out that the US sporting leagues may find it difficult to argue that prohibiting sports betting protects the public. American Gaming Association figures argue that legal sports wagering helps bring over 30 million visitors to Nevada each year and provides employment for thousands.

It is no coincidence that following years of ignoring the US market, UK bookmaking giant William Hill was licensed by the Nevada Gaming Commission. It foresaw that US restrictions on sports betting might be coming to an end and moved accordingly. It may have been correct. No court in its right mind would find that an unregulated, illegal market protects sport better than a regulated licensed one. By opposing New Jersey’s plans and potentially putting PASPA on trial, it appears that the turkeys have voted for Christmas.

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About Andy Brown

Andy is Editor of World Sports Law Report, a monthly journal tracking global developments in the regulation of sport. Prior to this, he was Managing Editor of Sport Services Group, a subsidiary of the Press Association that provided information services to the sporting industry. He was founding Editor of Football Insider magazine and has also worked on a number of other sports business publications.

* These issues and more will be discussed at Sport & Gambling 2012.

Andy Brown’s

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