The Pearl Harbor of U.S. Sports Gambling: 7 points on the Supreme Court Decision
There are certain days and events in history where everything changes. One day is ‘before’ – then the event happens and everything is changed ‘after’ that moment. You can choose your personal moment in history: September 11th, the Fall of the Berlin Wall, Pearl Harbor, Black Tuesday and the Great Depression, the Assassination of Archduke Ferdinand, etc, etc…
Today, in sports, was one of those events.
The American Supreme Court struck down a decades-old law prohibiting sports gambling in the United States.
In a judicial stroke of the pen it has opened the largest commercial real estate opportunity since the Oklahoma land deal. Right now, bookmakers, bettors, casinos, sports leagues and, especially, sports data brokerage companies are rushing into the United States as fast as they can go.
Here are seven points:
1. The U.S. sports gambling market is worth hundreds of billions of dollars annually. If that amount seems large to North American readers, it is because you are thinking only of American bettors. Sports gambling is globalized so there are millions of people all over the world who will now become interested in U.S. sports.
2. The American sports gambling world has for a long time been an exercise in institutional hypocrisy akin to the 1920’s prohibition era on alcohol. The TV networks and sports leagues knew that gambling drove a lot of the interest in their sports. On the other hand, it represents a danger to the integrity of their product. So like a breathless maiden in a Jane Austen novel when the bad boy dropped in for tea, they would do a lot of fluttering of their lace fans to show that they were intrigued while publicly declaring they would have nothing to do with such a scoundrel.
3. Bad day for organized crime. Sports gambling has been a massive, day-to-day earner for the mob. Spoke to Joe Pistone – aka Donnie Brasco – the FBI’s best undercover agent of the mafia in the U.S. As a mobster, he ran a number of sports books and estimated that sports gambling brought the mob as a much money as drugs.
4. The Supreme Court decision will cue a lot of what a lawyer friend of mine calls the ‘Oooky-wooky’ areas of the law. This advanced technical term means that there is a lot of grey areas – where states, sports leagues will decide on a case by case basis for years whether to allow sports gambling in their jurisdiction. However the end result will be a complete acceptance of gambling in sport in the United States.
5. The image of stake-holders scrambling across a line to grab their spot in a newly opened market is not strictly accurate. Since the NBA executive Adam Silver’s New York Times op.ed article in October 2014, where he endorsed legalized sports gambling, the writing has been on the proverbial wall. (link here: https://www.nytimes.com/2014/11/14/opinion/nba-commissioner-adam-silver-legalize-sports-betting.html)
For the last few years, sports gambling monitoring companies like Betgenius and Sportradar have been moving into the United States to sign deals with the sports leagues. The companies get the data of the sports leagues – a resource worth billions of dollars in a legal gambling market – the sports leagues get these companies help in checking the odd movements on specific games to hinder fixing.
6. Death of ‘Fantasy Sports Leagues’. Why would a gambler bet on a complicated, make-believe product when they could bet on the real game?
7. Rise in Match-fixing in American sports. Before today, if an athlete wanted to correctly fix a game they would have to have connections with organized crime. Not the easiest thing to do. Now, they will have much easier access to legalized sports betting.
The other concern – which is something that few like to speak of in the sports gambling monitoring world – is that the gambling market can successfully see potential fixes in small games in small leagues, but in the big games, the sports gambling market is simply too large to properly monitor.
Interesting times to come….
For the case documents and some superb analysis of the legal issues, please see…
Comments (3)
Great analysis Declan! This will lead to many, many diverse issues with which we all will need to deal including hw we address this in our curriculum.
Hi John, It will change almost everything in sports marketing, sponsorship, integrity issues, commercial rights, addictions issues and a mass amount of sociological issues. Cheers, Declan
The following is not an expert opinion but I believe that up to the present at the federal level gambling via foreign websites by Americans has been illegal. What this recent judicial opinion means is that any shady dealings executed in the US can easily be dealt with within the US instead of in, say, Panama, or by trying to extradite some shady dealer to the US. On the other hand we can now look forward to the equivalent of a soccer goalkeeper throwing the ball into his own net in other sports.