Lone U.S. Sports-Betting Holdout Benefits As March Madness Returns

March 17, 2022
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As the betting frenzy known as March Madness commences today, the National Collegiate Athletic Association stands alone among all major U.S. sports organizations in refusing to fully enter the lucrative sports-betting market.

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As the betting frenzy known as March Madness commences Thursday (March 17), the National Collegiate Athletic Association (NCAA) stands alone among all major U.S. sports organizations in refusing to fully enter the lucrative sports-betting market.

The NCAA doubled down on its opposition to sports betting on January 27, announcing a partnership with EPIC Risk Management to protect student athletes from “gambling harm.”

EPIC Risk Management includes a group of reformed problem gamblers who provide cautionary tales to prevent gambling addiction.

“This program is the latest action by the national office as the membership adapts to increased legalized sports wagering,” Stan Wilcox, the NCAA’s executive vice president of regulatory affairs said in a news release.

“The NCAA continually assesses the evolving sports wagering landscape, and we are committed to providing tools, resources and educational initiatives for our schools and conferences,” Wilcox said.

Tom Farrey, executive director of the sports and society program at the Aspen Institute, said the NCAA’s opposition to sports betting stems from the enormous gulf between revenue produced by college sports and the small amount flowing to athletes.

“Those athletes are the most impoverished, and thus the most motivated to find ways outside of the standard compensation system to profit from their knowledge or effort,” Farrey said.

Although it may be impossible to know how many student athletes bet on sports, including their own games, Farrey said he would not be surprised “if it happens a lot more than we know about.”

“The best thing the NCAA has going for it is the lack of transparency with personal gambling activity — the privacy of transactions,” he said.

The NCAA endured a tongue-lashing last June from U.S. Supreme Court Justice Brett Kavanaugh when the court voted 9-0 to reject the NCAA’s request for an exemption from federal antitrust laws.

Although not directly related to sports betting, the Supreme Court’s ruling allows college athletes to receive expanded benefits such as laptops from their schools.

The ruling also could pave the way for more states to allow college athletes to be compensated for the use of their name, image, and likeness.

More than half of the 50 states already allow such compensation.

“Under ordinary principles of antitrust law, it is not evident why college sports should be any different (from any other business),” Kavanaugh wrote in concurring with the unanimous opinion written by U.S. Supreme Court Justice Neil Gorsuch.

“The NCAA is not above the law,” Kavanaugh wrote.

Tom McMillen, a former Democratic congressman from Maryland who attended Oxford University on a Rhodes scholarship and later played in the National Basketball Association, questions whether the NCAA is enforcing its bylaws on gambling.

Despite the NCAA’s prohibition of the release of any gambling information by member universities, the Middle Atlantic Conference announced a data-sharing agreement on March 9 with Genius Sports.

Meanwhile, the Pac-12 Conference is working with Tempus Ex Machina to aggregate data.

“The conferences are beginning to tip their toes in the water, and it’s very analogous to the name, image and likeness issue,” said McMillen, who is president and chief executive of the LEAD1 Association which represents college athletic directors.

“A dead-letter law is one that’s still on the books but no longer enforced. Is the NCAA just not going to enforce these bylaws anymore?”

McMillen has predicted colleges eventually will make about as much money from selling data as they do from television contracts.

The American Gaming Association (AGA) estimates 45m Americans will bet $3.1bn this year on March Madness, the popular name for the annual men’s college basketball tournament.

Although the NCAA will not profit from the wagers, it will receive billions from its contract with television networks showing the games.

Under the current 14-year deal, which expires in 2024, television networks CBS and Turner Broadcasting System are paying $10.8bn.

The networks will pay another $8.8bn for an eight-year extension ending in 2032.

Jay Kornegay, manager of the Westgate Casino’s Superbook in Las Vegas, said this will be the first back-to-normal March Madness since the COVID-19 pandemic.

March Madness was canceled two years ago as the pandemic struck.

“Last year, we were restricted to 50 percent capacity. This year, we’re at full capacity and we’re sold out,” Kornegay said.

Unlike the Super Bowl, March Madness lasts almost three weeks and is expected to produce record revenue this year.

“It’s more popular at the beginning of the event rather than the end versus other championships,” Kornegay said.

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