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Questions Continue To Swirl Around Sports Gambling Legislation

March 16, 2016
Just about every week, a news item pops up that serves as a reminder that the issue of sports gambling is constantly with us.

In February, two states bordering Maryland -- Delaware and Pennsylvania -- had sports wagering issues churning in their respective legislatures. Neither development was especially eyebrow-raising, but in both cases, the actions taken illustrated that the question of sports gambling is constantly hovering.

In Delaware, that state's legislature is considering methods to make it more convenient to bet on the NFL parlays offered in Delaware casinos and at dozens of retail outlets. 

The Delaware Lottery has oversight for that wagering, and the lottery agency recently announced that in 2015, total wagers for NFL parlays in the state was $39.4 million. The good news, from the lottery's perspective, was that the 2015 figure was about a 400 percent increase from 2009, when the football parlays started there. But the not-so-good news was that 2015 wagering was about only a 4 percent jump from 2014.

The conclusion is obvious -- Delaware seems to be hitting the top end on sports wagering.

Right here it needs to be noted that only four states are allowed to have sports gambling, and Nevada is the only one of those four that's permitted to have wide-open, single-event wagering.  The other three states, Delaware, Montana and Oregon, are permitted parlay or pool wagering.

The overall prohibition and the handful of exemptions are the result of a federal law passed in 1992, the Professional and Amateur Sports Protection Act, more commonly referred to as PASPA. The four exempted states were grandfathered because they previously had such wagering on the books.

Now back to Delaware. To help reenergize the slowing rate of growth in sports wagering in that state, there is a proposal in the Delaware legislature to allow betting on the lottery's NFL parlays on computers and mobile devices. Nevada already has mobile sports wagering in operation, and online betting has moved the needle financially for sports book operators there.

Nevada had a record month in January for all sports betting (more than $448 million wagered), and a research analyst for the Nevada State Gaming Control Board credited mobile apps for helping generate more action. 

If Delaware were to approve remote wagering on its sports parlays, obviously there would be rules. Online bettors would have to be within the state and they'd have to be 21 years old.  Delaware already has online gambling for poker and casino games.

Meanwhile, in Pennsylvania, that state's legislature recently took action on sports gambling that is mostly symbolic but interesting in its near unanimity.

A committee in the state House of Representatives overwhelming approved, 23-1, a resolution "urging the Congress of the United States to lift the federal ban on sports betting and to allow states that authorize, license and regulate casino gaming, including the Commonwealth of Pennsylvania, to legalize sports betting through its licensed facilities."

In other words, if PASPA can be undone, Pennsylvania wants sports books in its casinos.

You'd have to figure that the scores of states that already have casinos and would want sports betting represents a big club.
And that brings us back to PASPA and the chief challenger to the federal act, which is the state of New Jersey. Jersey wants sports gambling, in large part, to help its own flagging casino industry, and the state has been fighting since 2012 in the courts to have sports wagering.

On other side, fighting to preserve PASPA is, of course, the NFL, the other major sports leagues and the NCAA.

The two sides were in court once again in mid-February, this time in front of a full panel of the U.S. Court of Appeals for the Third Circuit in Philadelphia, as New Jersey pressed its appeal to overturn a previous ruling that had body-slammed New Jersey's attempt to do an end-run around PASPA. New Jersey tried to dodge PASPA by lifting its own state prohibition on sports gambling. The tricky part is this -- New Jersey contends that it would not be regulating sports wagering (which would have it running afoul of PASPA), yet the sports wagering would be restricted to casinos and racetracks.

The sports organizations have argued that by restricting where sports wagering can be conducted that the state is, indeed, authorizing sports wagering in a way that has the state in violation of PASPA.

If New Jersey loses yet again, it can appeal to the U.S. Supreme Court. However, as it is frequently pointed out, the Supreme Court hears less than 1 percent of the cases that are presented to it for a hearing, and in this instance, there isn't even a situation where two or more lower courts have rendered decisions at odds with each other.

Here's the bottom line:

New Jersey keeps losing in court on this sports wagering issue, and it is quickly running out of courtrooms where it can mount an appeal.
The conclusion is that if the effects of PASPA are to be undone, then Congress will have to do it, and anyone who has been paying attention lately knows how difficult it has been to get Congressional action on almost anything.

Yet -- there has been a drip-drip-drip of support for allowing sports wagering.

NBA commissioner Adam Silver penned a now-famous article in The New York Times last year, saying that sports betting appeared to be inevitable and that it should be regulated.

Daily fantasy sports, despite being under legal and legislative scrutiny, has gained wide acceptance and has contributed to creating a more accepting climate of fans having a financial interest in the games.

Initiatives such as the one in Pennsylvania appear to bipartisan, and scores of states are now reliant on gaming tax revenues to support their budgets.

So maybe altering PASPA to allow states to make their own decisions on sports wagering is actually something on which Congress can agree.

It's just hard to set the odds on that happening.

Issue 219: March 2016