How U.S. Leagues Won By Losing Supreme Court Case On Sports Betting

September 7, 2023
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As the United States' most popular sport opens a new season on Thursday, the nation’s five major sports leagues appear to have actually won a landmark Supreme Court decision they lost five years ago.
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As the United States' most popular sport opens a new season on Thursday (September 7), the nation’s five major sports leagues appear to have actually won a landmark Supreme Court decision they lost five years ago.

The leagues are cashing in on sports betting like never before and it may have been all part of a carefully planned ruse, according to one theory posited by sports-betting expert Ryan Rodenberg, a tenured professor with the Department of Sport Management at Florida State University.

“It was a clever move for the NFL and its other co-plaintiffs to file the federal lawsuit against New Jersey that eventually overturned PASPA,” Rodenberg told Vixio GamblingCompliance on Tuesday (September 5).

PASPA is the Professional Amateur Sports Protection Act of 1992 which prevented states outside Nevada from legalizing and regulating sports betting until being overturned in a 6-3 decision by the Supreme Court on May 14, 2018. 

By eliminating PASPA, the Supreme Court opened the door for the NFL and its other co-plaintiffs — Major League Baseball, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association — to enter and eventually derive significant direct and indirect revenue from the spread of regulated sports wagering.

“While licensed sportsbook operators are paying the leagues millions of dollars for ‘official sports betting partnerships,’ the payees (or leagues) are climbing the sports betting learning curve and will soon emerge as full-blown direct competitors bent on putting licensed sports book operators out of business,” Rodenberg wrote in an article published in November 2022 by the Journal of Legal Aspects of Sport.

Although the leagues strongly supported the passage of PASPA in 1992, they began to experience “buyer’s remorse” as technological advances in the digital era made the sports-betting market an increasingly “untapped revenue source,” according to Rodenberg.

The Supreme Court actually should not have agreed to hear the sports-betting case, Rodenberg argues, because it “was the wrong case — with the wrong plaintiffs — to generate a ruling with lasting precedential value.”

“The Supreme Court ignored the optimal path and sports-betting legalization in the United States is left with the wreckage,” Rodenberg said.

Although sports leagues have enjoyed economic benefits from legal betting, policy and integrity challenges related to sports wagering are also becoming more obvious heading into the 2023 football season.

Since April, the NFL has suspended ten players for sports-betting violations. 

A similar situation exists in colleges where at least 15 athletes from the University of Iowa and Iowa State University face criminal charges for breaking gambling regulations. Several students have agreed to plea deals on charges of underage gambling, avoiding more serious allegations.

The leagues argue these transgressions would not have been discovered without their aggressive monitoring of wagers which followed the legalization of sports betting.

In response to the recent suspensions, the NFL has ramped up efforts to educate players about the league’s gambling policy.

The NFL policy also includes a separate admonition for coaches, staff and personnel saying, “Do NOT Bet on Any Sports!”

But Rodenberg is not alone in his concern that Pandora’s box may already have been opened.

Author Dan Moldea called the 2018 Supreme Court decision “bone-headed” and said he is convinced sports gambling “will cause the inevitable destruction” of college and professional sports.

Moldea has been a thorn in the NFL’s side ever since 1989 when he wrote a controversial book entitled, “Interference: How Organized Crime Influences Professional Football.”

One year before the court decision in 2018, Moldea predicted the NFL would need sports betting to be legalized to secure a prosperous future.

“I’d like to have a dollar for every beard who has placed bets for NFL players — whose careers they now own,” Moldea told Vixio in an email.

Michael Lawton, senior economic analyst for the Nevada Gaming Control Board, said betting on college football and the NFL in 2022 in Nevada set a new record of $2.79bn, an increase of 2.61 percent more than in 2021.

“We have been informed by our operators that the split between the two is 60 percent NFL and 40 percent NCAA,” Lawton said.

“However, this is not something we have verified; it is more anecdotal.”

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