Legal & RegulatorySports Betting

Has New Jersey been going about the sports-betting issue the wrong way?


t is now near impossible to even imagine New Jersey being successful in its attempts to repeal the terms of the Professional and Amateur Sports Protection Act (PASPA) of 1992, after the Third Circuit Court of Appeals in Philadelphia voted 10-2 against the state following a hearing on the matter in February.

This comes after the state was blocked from allowing sports betting in the state in 2012 and 2014, as the plans were opposed by the four major US sports leagues and the National Collegiate Athletic Association, wanting to protect the sports from match fixing. The 2014 law would have allowed for racetracks and casinos to offer sports betting.

For the average observer, deciphering through the terminology and the wording of the hearing would have been akin to working at Bletchley Park during World War II. New Jersey had to go down the route of claiming it would not regulate sports betting, but would in fact become a grey market and repeal the terms of PASPA without authorising sports betting. PASPA does allow for single-game sports betting in Nevada and limited sports betting in Montana, Delaware and Oregon. Repealing its terms rather than authorising sports betting would make it “the sports betting rule that doesn’t really allow sports betting but doesn’t make it illegal either so kind of does allow you to do it in a roundabout way” rule. It is doubtful that it can be explained sensibly and it was unsurprising to see the state lose again.

State Senator Ray Lesniak has not given up hope of taking the issue to the US Supreme Court, though their chances may be similar to that of myself going up against Floyd Mayweather in a boxing ring.

All of this confusion leads to one question: Why doesn’t New Jersey attempt to go the way of online gambling and ask for legislation to bypass PASPA entirely?

This would be comparable to the 2011 Department of Justice Wire Act, which in a sense went over the 2006 Unlawful Internet Gambling Enforcement Act’s head and allowed for intrastate online gambling, which New Jersey duly followed up on, as it opened a regulated market in November 2013. With regards to sports betting, this may be New Jersey’s best hope. Lesniak has said he is open to testing the temperature on repealing all sports-betting laws.

Making it possible for any state to allow sports gambling may seem extreme, but here are some reasons as to why it could work.

Sports betting works elsewhere

Without wishing to take position on a particularly sizeable horse and witter on about the way we do things in dear old Blighty, you would only have to watch one round of Premier League matches to see how the two industries can work together. As many as 10 Premier League teams currently have their shirts sponsored by gambling operators and a wave of betting partnership announcements were made in the weeks leading up to the start of the season, including Chelsea and Tottenham Hotspur’s deals with William Hill.

There is perhaps a cultural difference in that for many British football fans, an average weekend involves placing bets on games around Europe. With the likes of Bet365 sponsoring Monday Night Football and operators screening their ads at half time during matches, it is ingrained on the football supporter or indeed the sports fan.

The latest Gambling Commission figures show that Great Britain’s land-based sports betting gross gaming yield (GGY) totalled £3.2bn between October 2014 and September 2015, while online sports betting GGY was £1.46bn for the period between 1 November 2014 and 30 September 2015.

It is worth remembering though that match fixing related to gambling does happen in Great Britain and other cultures where sports betting is more easily accessible than the US. Gambling Insider was told by Sportradar last year that its Fraud Detection System has noted over 2,000 sporting events as likely to have been manipulated since 2009.

Those who are anti-gambling can point to incidents like cricket’s infamous spot fixing scandal of 2010, where Pakistani bowler Mohammad Amir was paid by bookmaker Mazhar Majeed to deliberately bowl a no ball at a certain time in a Test match against England, receiving a prison sentence along with his captain Salman Butt.

These are different times

There is also a clear argument that US sports have been tainted by gambling rings in the past, such as the 1919 Black Sox Scandal, where eight Chicago White Sox players were accused of fixing baseball’s World Series against the Cincinnati Reds, or the 2006 Operation Slapshot, an investigation into match fixing in the NHL that linked to around half a dozen players. The second of those scandals is particularly interesting, as it still occurred after the passage of PASPA, and proved that it cannot entirely rid sports from allegations of match fixing.

New Jersey, despite suffering some early geolocation and payment processing problems, has proven it can regulate an online casino and poker market safely and efficiently, with the market revenue totalling $392.3m since the market launched. This is the same US state that was the second to offer casino gambling after Nevada. It knows how to regulate gambling and should be allowed to make up its own mind as it did with casinos and online, without worrying about issues regarding the specific wording of PASPA.

Why does PASPA work anyway?

New Jersey’s argument against PASPA as a whole should be quite simple, in that its terms do not make sense. Why allow forms of sports betting in certain states and in particular adopt such a relaxed attitude with Nevada and ban sports betting from all other states? What makes the states where sports betting is allowed any safer from fixers than the other 46?

Another question that opponents of regulated sports betting might have never considered is: If a crook wants to use athletes to fix sporting contests, then why would they need to know about or even begin to care about whether the market is regulated or not? A crook that wants to fix matches has no regard for laws anyway and will attempt to fix matches regardless. Like all forms of gambling, if a sports-betting market is regulated in any state, then this is always more likely to drive gamblers away from the black market and it could be operated just as safely as any other form of gambling.

Put simply, if a state thinks PASPA works for them, then so be it, but if not, then a state has plenty of ammunition to argue that it should allow sports betting.

What next?

What has been clear from this whole process is that New Jersey is not prepared to take no for an answer and quite frankly, it has nothing to lose in attempting to change the entire US sports betting regulatory landscape in order to get its way.

It would be naive to assume that simply asking for new sports betting legislation would bring about change in the short term or would even stand a chance, but going through PASPA rather than around it could be the way forward if Lesniak introduces a bill to allow for intrastate sports betting.
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