With a recent court ruling keeping alive the hope for sports wagering back to New Jersey’s struggling casinos, the issue of legal sports gambling is back on the public's radar, with much credit owed to the fantasy sports betting arena.
Presently, legal sports betting in the US is limited to Nevada, Delaware, Oregon, and Montana, thanks to their exemptions from The Professional and Amateur Sports Protection Act of 1992. Fantasy sports betting however receives their green light from a clause attached inside of the UIGEA, legislation enacted in 2006.
The popularity of daily fantasy sports betting sites FanDuel and DraftKings bring a tinge of controversy and hypocrisy to the discussion of legalized sports betting, along with questions on their own apparent need for regulation amid an insider trading scandal.
The legality of such sites was brought up in the last Republican Presidential Debate, with New Jersey governor Chris Christie putting the issue deftly at rest by stating, “We’re talking about fantasy football?”
Governor Christie remains a 25 to 1 long shot according to the political betting odds market. Sportsbook Review released an editorial on September 25 which analyzed whether Christie is the President online sports bettors need.
Lotto Double Standard?
Nothing denotes the hypocrisy in the argument against internet sports gambling better than the state sponsored lottery systems prevalent across the United States, especially when at least one US state might be free rolling winners.
With over $62 billion in play annually across the country, these games of chance net the states $20 billion in revenues to be distributed to certain causes.
Economic Benefit for Legal Sports Betting
Most of the time, lottery revenue goes to the state fund for education, although this revenue makes up little of the overall budget. In the state of California for example, the lottery provided approximately $1.35 billion to the education fund in 2014, but that was only a fraction of the overall budget, or around 1%. In other states, lottery funds go to more specialized social causes. In Colorado, lottery revenues go to environmental causes. In Pennsylvania, the funds go to senior citizen programs. And in Kansas, funds go to building juvenile detention facilities.
The profitability of these state run lotteries varies widely, with Oregon leading the U.S. in returning 67% of lottery revenue back to their general fund. However, the neighboring state of Idaho only returns 26% of their lottery revenue back to public programs.
An argument could be made that legalizing sports wagering, online or otherwise, would reduce the revenues of these state sponsored lotteries. That would be one reason for opposition within the states - the competition for a finite bucket of funds. But for that argument to be valid, you’d have to prove that these funds are coming from the same demographic.
Would people who play the lottery all of the sudden switch their behavior to gamble on sports instead? The sheer numbers of wagers made online suggests otherwise, as Merrill Lynch predicted that online wagering would reach $177 billion in 2015, with $100 billion of that being wagered on sports.
Sports Betting the next Marijuana?
With the legalization of marijuana in Colorado and Washington successfully exposing those hidden markets to taxation, it is only a matter of time before the $177-billion-dollar internet gambling market follows suit. Sportsbook Review asked if internet gambling would be the next marijuana in an editorial at the start of the year.
The technological advances to allow this activity come so quickly that the chances of squashing it completely are now almost non-existent.
It is not an ethical question anymore, but a political necessity, as politicians are faced with the choice between raising existing taxes or widening the tax net by bringing even more revenues through legal sports betting, as New Jersey is attempting to do.
Sportsbook Review will keep readers updated on the status of sports betting in the United States.