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Regardless Of Supreme Court Decision, Rise Of Sports Gambling Will Continue

May 15, 2018
Forget the NFL agonizing over what's a catch, or Major League Baseball's latest gimmick to quicken the pace of its games.

The most important decision regarding the future of sports has been in the hands of the U.S. Supreme Court for the last several months. That would be the call on the case that pits the state of New Jersey against Big Sports (meaning the NFL, MLB, NBA, NHL and NCAA).

The decision on that case has been expected on any given Monday -- the day the Supreme Court usually announces decisions -- this spring or early summer. It could land in May or June.

At issue is whether New Jersey can offer sports betting at its casinos and racetracks, just like Nevada. The central issue has been a 1992 federal law, the Professional and Amateur Sports Protection Act (PASPA) that prohibits states from legalizing sports gambling. Big Sports has opposed New Jersey, contending legalized sports betting could hurt its product.

Some folks have viewed the case as simply whether sports gambling will be allowed in any state that wants it. That's too simplistic.

Unlike a sports score, the decision the Supreme Court hands down may not render an outcome as clear-cut as the final numbers on a scoreboard.

Regardless of how the Supreme Court rules, there are some things about sports gambling in America that are almost certain:

More Widespread Sports Gambling Will Happen

Regardless of the Supreme Court's decision, whether it is sweeping or nuanced, the momentum toward sports gambling in America has become an irresistible force. Whether the spread of sports gambling is a function of a judicial decision or legislative action -- such as Congress repealing or amending PASPA -- it's coming, just as sure as another TV commercial for insurance.

Why?

It is financially good, or even essential, for everyone who makes money off of sports -- the owners, the players and the media. Those folks are finally frightened enough by their loosening grip on America's fleeting attention to concede the point.

Nothing encourages fan engagement quite like having a stake on an event's outcome. For those selling T-shirts, luxury suites and everything in between -- like advertising time and subscriptions to sports content -- fan engagement is everything.

Leagues, Players And States Will Want Their Cut

Admittedly, you don't have to be a soothsayer to see this coming because the leagues already tipped their hands. Stunningly, while they are parties in the argument against New Jersey's ambition to have sports gambling, the NBA and MLB have simultaneously been mounting efforts in some individual states to help craft legislation to mold the rules and regulation of sports gambling laws. That such legislation will establish state governments' shares of taxes is a slam-dunk.

A big part of the leagues' helpfulness in crafting that legislation has been to devise ways in which they would extract direct or indirect revenue from the wagers.

In one proposal, sports leagues suggest they receive 1 percent of the handle (meaning all money bet on games), which would translate to a stunningly high 20 percent of sports gambling revenues.

The justification for the money-grab, sometimes dubbed an "integrity fee," is that leagues would have to beef up their vigilance to protect the integrity of their games. Of course, considering there's a multi-billion dollar illegal market in sports gambling churning away every minute of every day, you'd think that sports leagues were already taking care of the integrity business.

But if the "integrity" argument doesn't work, the leagues could argue that the statistics and data to determine wagers are something that they own and control -- and they should be paid for those things.

As far as the players are concerned, that move is already afoot. Last month, the players' associations for all four major sports leagues joined to announce their interest in sports gambling.

They said, in part, the following:

"Our unions have been discussing the potential impact of legalized gambling on players' privacy and publicity rights, the integrity of our games and the volatility on our businesses," the Players' Associations said in a joint statement.

"Betting on sports may become widely legal, but we cannot allow those who have lobbied the hardest for sports gambling to be the only ones controlling how it would be ushered into our businesses. The athletes must also have a seat at the table to ensure that players' rights and the integrity of our games are protected."

Notice the use of the word "rights" (as in "publicity rights") in that statement. Those rights just may have some monetary value, as the players see it.

Sports Media Will Increasingly Focus On Betting

Until recently, the issue of betting has been a minor sidebar in sports coverage.

That will change.

It already is changing.

Brent Musburger, the veteran broadcaster who had a long career at CBS, ABC and ESPN, now anchors a purely sports betting show from Las Vegas that is live streamed several days a week.

The Action Network is a website that has brought together previously independent websites that specialize in sports data, daily fantasy sports and betting analysis to produce a fistful of articles every day. The Action Network was put together by Los Angeles-based The Chernin Group, which has produced TV series and feature films, so this is a serious editorial effort.

As sports' gambling becomes more widespread, reporting on betting and wagering advice will become as much a part of the mainstream sports media landscape as that night's highlight plays.

Ted Leonsis, owner of the NBA's Washington Wizards, NHL's Washington Capitals and WNBA's Washington Mystics, along with other sports teams including the Arena Football League Baltimore Brigade, is especially bullish about sports wagering's place in media.

In a radio interview late last year, Leonsis made this observation:

"I joked the other day with someone from ESPN, I said look, 'If you're a day trader or you're in the financial community, you have CNBC on 24/7. And there are buy-side analysts and there are sell-side analysts and there's a ticker. You could see one day ESPN2 being like CNBC.'

"Gambling is no different than betting on stocks on Wall Street, right? The people who do best are the most informed."

Leonsis is a sports owner who can feel the tectonic plates of sports beginning to shift.

There can be arguments that it will be for the better or for the worse. 

What there is no argument about is that it is inevitable.

Issue 244: May 2018