Has Sports Betting Made Criminal Activity Easier? September 27, 2017 September 27, 2017 by Karen While the majority of sports betting establishments offer a world of thrills, hair-raising competition and unceasing entertainment, there is a large number that have unfortunately experienced a flood of criminal activity in their midst. The Professional and Amateur Sports Protection Act (PASPA) of 1992 was the legislation that made wagering illegal on the federal level, with a few exceptions, e.g. It took 26 years before the Supreme Court ruled that banning betting was unconstitutional, a decision that still splits opinions in the US. In May of 2018, The United States Supreme Court issued a ruling that allows individual states to decide whether and how to allow gambling on sports. The decision overturned a 1992 federal law – the.
NBA Commissioner Adam Silver says there's $400 billion per year of illegal sports betting in the U.S. alone. Seriously?
Last week, NBA Commissioner Adam Silver published an op-ed in the New York Times arguing that Congress should legalize sports betting in the United States. Gambling on basketball, football, and other sports, he explained, is already an enormous underground industry run by illegal bookies and unsavory offshore websites. Better to bring the business out into the open and carefully regulate it, like in Nevada.
This all seemed like a fairly reasonable stance. But my editor and I were struck by one nugget in Silver's piece. 'There is no solid data on the volume of illegal sports betting activity in the United States,' the commissioner wrote, 'but some estimate that nearly $400 billion is illegally wagered on sports each year.' It is, of course, extremely difficult to approximate the size of any illegal industry, given that criminals aren't the best at keeping business records. But this was an irksome sentence. It seemed to say: Sure, nobody really knows how much of this shadowy activity goes on, but here's one eye-popping guess that's sure to be repeated by reporters. (And the number was indeed repeated). Moreover, $400 billion is a hulking sum of money-;an average of about $1,700 wagered by every American adult every calendar year, or equal to roughly 2 percent of the entire American economy.
So, we wondered, where did that number originate? Could it possibly be right? Spoiler alert: It's probably made up.
When I asked the NBA where Silver got that $400 billion figure, a spokesman pointed me to the 1999 final report of National Gambling Impact Study Commission. (He told me it was 'one of the sources' Silver drew from, though the spokesman never identified any others.) Authored by a nine-member panel created by Congress, this was the first comprehensive study of gambling and gambling addiction in America in decades. The panel ultimately urged Capitol Hill to pass a raft of new limits on gambling, including a complete ban on college sports betting, even in places where it was already legal. (Happily for the city of Las Vegas, this did not come to pass.)
The section on sports is short but dramatic. 'Estimates of the scope of illegal sports betting in the United States range anywhere from $80 billion to $380 billion annually,' the commission wrote, 'making sports betting the most widespread and popular form of gambling in America.' Silver, it seemed, took the high end of that range, but didn't adjust it for inflation.
So, case closed? Not quite. The $380 billion figure was footnoted in the report, but the citation wasn't a research paper. Instead, it referred back to an Associated Press article that appeared in the May 18, 1999, edition of the Las Vegas Review-Journal, titled 'Ban on College Sports Betting Could Cost State Books Millions.'
That news article, it turned out, recounted one of the commission's own hearings, which had taken place in Las Vegas the previous November. 'Commissioners were told that while legal sports betting in Nevada draws $2.3 billion a year, illegal sports betting runs anywhere from $80 billion to $380 billion annually,' the article explained.
So, who told the commission about this $380 billion worth of sports betting? Thankfully, the commission's very retro website includes the complete transcripts of its hearings, including the Vegas meeting. In an introductory briefing, commission staffer Dr. John Shosky explained, although 'reliable figures on the scope of sports gambling are difficult to find,' at least one study suggested that about $88 billion was bet illegally each year. Vic Salerno, the CEO of American Wagering, a Vegas bookmaker, cited estimates between $50 billion and $250 billion (the latter of which appeared to have come from a clinical psychologist who studied gambling addicts rather than any kind of economic study). None of the other expert speakers appear to have presented specific numbers.
The $380 billion figure only emerged later thanks to an exasperated commission member, John Wilhelm. A fellow commissioner had suggested that the gambling industry itself needed to take more steps to combat sports gambling addiction. Wilhelm found this idea absurd, since most wagering was illegal. 'According to the testimony and the staff briefings, there's about two and a half billion dollars' worth of legal sports gambling in this country and there's somewhere, depending on whose guesstimate you take, within $80 to $380 billion worth of illegal sports gambling,' he said. 'There's no way that I could see for anybody to get the neighborhood bookie or the local college bookie to step up to the plate and share in the responsibility for the apparently rampant compulsive gambling problems that directly relate to sports wagering.'
A fair point, to be sure. But in his rhetorical flourish, Wilhelm seems to have pulled the number $380 billion out of thin air. If any experts did mention the number to him, it wasn't preserved for the public record. This might not have been a problem for the purposes of the meeting--his point was that illegal sports gambling probably dwarfed legal sports gambling. However, the AP proceeded to report the number as fact. The commission then cited the wire service's report in its final study, rather than the actual words of its expert panel. Thus, a statistic that may well have been made up on the spot was sealed into history. Among other places, the number (or inflation-adjusted versions of it) would eventually resurface in future congressional testimony, in academia, in a Supreme Court brief, and, of course, in the New York Times.
Though the NBA didn't provide it, I did find one other potential source for Silver's statistic. In 2008, the law firm Wachtell, Lipton, Rosen & Katz produced a study on sports gambling for the NBA's board of governors that stated: 'By some estimates, total volume of sports betting in the United States is $325 to $400 billion, with less than 1 percent of this betting taking place legally in Nevada.' Again, the document does not cite a source, and the lawyers who wrote it did not respond to my request for comment. It may very well be based on the Gambling Impact Study Commission's findings.
If not $400 billion, then how much money is bet on sports illegally in the United States each year? Honestly, I have no idea. During my reporting, I couldn't track down any contemporary studies that offered a credible estimate of the illegal sports betting market. When I asked the American Gaming Association if it knew of any, a spokesman pointed to the 1999 commission report, and said that the trade group was only just getting ready to conduct its own research on the issue.
Ultimately, we don't need to know the exact dollar amount that Americans wager each year to debate whether sports betting should be illegal. Even if it were simply $100 billion rather than $400 billion, it would still be a huge market. The point, though, is that it's always healthy to be suspicious of bold, shocking statistics, no matter how reliable the source might seem.
Also on Slate: 'A Casino Sent Promotional Emails to Compulsive Gamblers Because of a Software Glitch.'
Long title | An Act to prohibit sports gambling under State law, and for other purposes. |
---|---|
Acronyms(colloquial) | PASPA |
Nicknames | Bradley Act |
Enacted by | the 102nd United States Congress |
Effective | October 28, 1992 |
Citations | |
Public law | 102-559 |
Statutes at Large | 106 Stat.4227 |
Codification | |
Titles amended | 28 U.S.C.: Judiciary and Judicial Procedure |
U.S.C. sections created | 28 U.S.C.ch. 178 § 3701 et seq. |
Legislative history | |
| |
United States Supreme Court cases | |
Struck down by U.S. Supreme Court in Murphy v. National Collegiate Athletic Association on May 14, 2018 |
The Professional and Amateur Sports Protection Act of 1992 (Pub.L.102–559), also known as PASPA or the Bradley Act, is a judicially-overturned law that was meant to define the legal status of sports betting throughout the United States. This act effectively outlawed sports betting nationwide, excluding a few states.
The sports lotteries conducted in Oregon, Delaware, and Montana were exempt, as well as the licensed sports pools in Nevada[1]. In addition, Congress provided a one-year window of opportunity from the effective date of PASPA (January 1, 1993) for states which operated licensed casino gaming for the previous ten-year period to pass laws permitting sports wagering. The latter exception was clearly crafted with New Jersey in mind. However, New Jersey failed to take advantage of this opportunity. Excluded from the reach of PASPA are jai alai, as well as parimutuelhorse and dog racing.
In a May 2018 decision in Murphy v. National Collegiate Athletic Association, the Supreme Court of the United States ruled that PASPA conflicts with the Tenth Amendment.
History[edit]
On June 26, 1991, the Senate Judiciary Subcommittee on Patents, Copyrights and Trademarks held public hearings on sports gambling. It found '(s)ports gambling is a national problem. The harms it inflicts are felt beyond the borders of those States that sanction it.' David Stern, the then-commissioner for the National Basketball Association, testified that 'The interstate ramifications of sports betting are a compelling reason for federal legislation.' In light of these findings, Congress exercised its authority under the Commerce Clause to enact Senate Bill 474 Professional and Amateur Sports Protection Act (PASPA) in 1992, codified at 28 U.S.C. § 3701.[2]
Legislative efforts against the act[edit]
New Jersey has been a leader, both in legislation and in the legal process, in support of the legalization of sports betting in New Jersey despite its original failure to take advantage of the carve out in the PASPA of 1992. The law is also known as the 'Bradley Act', named for New Jersey Senator and former NBA star Bill Bradley. New Jersey voters in 2011 voted for a state constitutional amendment that would permit sports gambling. The next year, the NJ State Legislature enacted the Sports Wagering Act ('2012 Act'), allowing sports wagering at New Jersey casinos and racetracks.[3]
Legal challenges[edit]
Proponents of repeal typically assert that the law as written is inherently unconstitutional, as the Tenth Amendment of the U.S. Constitution reserves to the states all rights not explicitly granted to the federal government—such as gambling regulation. While the primarily legal challenge to the law came from New Jersey, other efforts to overturn it had been set in motion before the Supreme Court's decision in May 2018; this included a sports-betting bill being introduced in Kentucky[4], as well as the other states who are in the process of creating and or passing some form of sports betting legislation and the formation of the pro-repeal American Sports Betting Coalition, a lobby alliance which includes the American Gaming Association and the National Indian Gaming Association.[5]
PASPA was formally challenged in the state of New Jersey. In March 2009, New Jersey State Senator Raymond Lesniak filed a lawsuit in the United States District Court for the District of New Jersey claiming, among other things, that the PASPA unconstitutionally discriminated among the states by allowing four states to offer sports betting while disallowing the other forty-six states from enjoying the privilege; however the case was dismissed as the court argued that only then-Governor Chris Christie could bring the suit, and at that time, Christie believed it would be difficult to challenge the law.[6] A 2010 referendum showed overwhelming support by state voters to legalize sports gambling,[7] and by 2012, the state passed a law that would allow for sports gambling at licensed locations.[8] This law was challenged by the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League, and Major League Baseball in August 2012, arguing their new law violated PASPA.[9] The state argued that they knew their law likely violated PASPA, but argued that PASPA itself violated the Tenth Amendment's protection against anti-commandeering federal laws that stripped the power of the state to repeal their own sports gambling ban.[10] This case, heard in the United States District Court for the District of New Jersey, found for the sports leagues, dismissing the state's claims regarding PASPA.[11] New Jersey appealed the decision. On September 17, 2013, the Third Circuit Court of Appeals, in a decision by Judge Julio M. Fuentes, found for the sports leagues, again ruling that the state law violated PASPA and enjoined the state from enacting the law.[12] However, the Appeals Court also ruled that PASPA did not prevent New Jersey from repealing any existing laws it had.[13]
Based on the Appeal Court's comment, New Jersey, now with Governor Christie's blessing, passed a new law in 2014 that repealed a former state law that banned sports gambling.[13] The four leagues and the NCAA filed suite against this new law, again arguing that it violated PASPA. The leagues and the NCAA prevailed both at District Court and at an en banc decisions from the Third Circuit by August 2016, leading the state to petition the Supreme Court of the United States to hear the case.[14] New Jersey appealed this case to the United States Supreme Court, requesting examination of PASPA under the anti-commandeering provisions of the Tenth Amendment.[15]
The Supreme Court accepted the case in June 2017[16] and heard oral arguments in December 2017;[17] during this time, Governor Christie stepped down and was replaced by Phil Murphy; the case before the court became Murphy v. National Collegiate Athletic Association. The case was combined with a separate petition NJ Thoroughbred Horsemen v. NCAA, representing commercial interests related to PASPA. The Court ruled in May 2018 in a 7-2 decision that parts of PASPA were unconstitutional as they commandeered power from the states, and in a 6-3 decision, determined that the whole of PASPA was unconstitutional.[18][19]
Illegal Sports Gambling
References[edit]
- ^Lambert, Troy (July 18, 2017). 'Supreme Gamble: The Professional and Amateur Sports Protection Act'. Huffington Post.
- ^Rodefer, Jeffrey (March 5, 2007). 'Sports Protection Act'. gambling-law-us.com. Retrieved July 24, 2017.
- ^Johnson, Brent (October 17, 2014). 'Christie signs law allowing sports betting in N.J.'The Star-Ledger. Retrieved July 24, 2017.
- ^'New Kentucky Bill Would Legalize Sports Betting In Bluegrass State'. Legal Sports Report. September 20, 2017. Retrieved October 24, 2017.
- ^'Tribal, Commercial Casino Alliance On Sports Betting Gains Momentum'. Legal Sports Report. September 25, 2017. Retrieved October 24, 2017.
- ^Spoto, MaryAnn (September 25, 2011). 'Casino, horse racing leaders push for legalization of sports betting in N.J.'The Star-Ledger. Retrieved March 16, 2018.
- ^Spoto, MaryAnn (November 8, 2011). 'Sports betting backed by N.J. voters'. The Star-Ledger. Retrieved March 16, 2018.
- ^Friedman, Matt (January 17, 2012). 'Gov. Christie signs bill allowing gamblers to place bets on pro, college sports teams'. The Star-Ledger. Retrieved March 16, 2018.
- ^Heitner, Darren (August 7, 2012). 'Constitutionality Of Sports Betting Prohibition At Issue In NCAA And Professional Leagues' Lawsuit Against New Jersey'. Forbes. Retrieved July 24, 2017.
- ^Schamis, Axel; Van Bramer, Katherine. 'Christie v. National Collegiate Athletic Association'. Legal Information Institute. Retrieved March 18, 2018.
- ^Drape, Joe (March 27, 2013). 'Cash-Hungry States Eye Sports Betting, to Leagues' Dismay'. The New York Times. Retrieved July 24, 2017.
- ^'Appeals Court Upholds Constitutionality Of New Jersey Sports Betting Ban'. United States Department of Justice. September 17, 2013. Retrieved July 24, 2017.
- ^ abPurdum, David; Rodenberg, Ryan (March 3, 2018). 'The odds of legalized sports betting: New Jersey vs. the leagues'. EPSN. Retrieved March 16, 2018.
- ^Johnson, Brent; Salant, Jonathan (August 9, 2016). 'N.J. loses again in quest to bring sports betting to state'. The Star-Ledger. Retrieved July 23, 2017.
- ^'Christie v. National Collegiate Athletic Association'. SCOTUSblog. Retrieved July 26, 2017.
- ^Johnson, Brent; Salant, Jonathan (June 28, 2017). 'U.S. Supreme Court agrees to hear N.J. sports betting case'. The Star-Ledger. Retrieved July 22, 2017.
- ^'The NJ Sports Betting Case Gets Its Day In SCOTUS: What We Learned'. Legal Sports Report. December 4, 2017. Retrieved December 5, 2017.
- ^Purdum, David (May 14, 2018). 'Supreme Court strikes down sports betting law'. ESPN. Retrieved May 14, 2018.
- ^Maese, Rick (May 14, 2018). 'Analysis | What the Supreme Court's sports gambling decision means'. The Washington Post. ISSN0190-8286. Retrieved May 14, 2018.
External links[edit]
- Opinion for Murphy v. National Collegiate Athletic Assn. (16-476) from SupremeCourt.gov
- Professional and Amateur Sports Protection Act of 1992, Chuck Humphrey, Gambling Law US
Illegal Sports Gambling Statistics
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