Nevada’s virtual monopoly on legalized sports wagering could be in danger.
But is that bad for business?
In a New York Times op-ed piece last Thursday, National Basketball Association Commissioner Adam Silver wrote the league should reconsider its stance against the expansion of legal sports gambling.
Silver, who became NBA commissioner in February, is the first head of a major professional league to soften that opinion.
“I believe we need a different approach,” Silver said of the estimated $400 billion annually wagered illegally on sports outside of Nevada. “(Sports wagering) is a thriving underground business that operates free from regulation or oversight.”
Silver said that sports betting should be brought into “the sunlight where it can be appropriately monitored and regulated.”
The gaming community pounced on those words.
American Gaming Association CEO Geoff Freeman said the Washington, D.C.-based trade organization would help “identify the size and scope” of the U.S. illegal gambling market and offered to partner with the NBA and other leagues.
William Hill U.S. CEO Joe Asher, whose European-based race and sports book company stands to benefit if legal wagering expands in America, agreed with Silver’s contention that a regulated sports betting industry protects consumers.
“Sports betting is widespread throughout the U.S. today,” Asher said. “Unfortunately, it is mostly illegal, unregulated and untaxed. That serves to benefit the criminals who serve that market today.”
In the days following publication of Silver’s commentary, Las Vegas-based sports handicapper R.J. Bell became a popular person with national media outlets.
Bell’s message in multiple interviews about Silver’s remarks was expanded sports wagering is good for Las Vegas.
The growth of casinos nationwide created markets that were in some ways a scaled-down version of Las Vegas. Bell said legal sports books across the country will have the same historical result as casinos — breeding new gamblers who want to visit the Strip.
“They will be a lesser version of what we do here,” Bell said. “They will create a farm system for Las Vegas and Nevada.”
Bell speculated that pro sports leagues or teams might even partner with large casino companies.
Partnerships were created in January between the NBA’s Philadelphia 76ers and the National Hockey League’s New Jersey Devils with bwin.party, the Internet gaming arm of Atlantic City’s Borgata. Sports betting is not part of the online package.
All this discussion is preliminary. If the debate on legal sports betting nationally is compared to a baseball game, the fans would still be entering the stadium to watch batting practice. The contest hasn’t even begun.
On Thursday, U.S. District Judge Michael Shipp will hear arguments on New Jersey’s latest effort to legalize sports wagering. The state wants to allow sports books to open in racetracks and is opposed by the four major sports leagues and the NCAA.
Shipp issued an injunction last month, preventing New Jersey from offering sports bets.
Last year, the 3rd U.S. Circuit Court of Appeals tossed out a state legislative push to implement sports wagering in Atlantic City casinos. New Jersey voters, however, approved sports betting in 2011.
Silver said the NBA is part of the lawsuit because of the Professional and Amateur Sports Protection Act, or PAPSA. The 1992 congressional action prohibits sports wagering everywhere but Nevada, Oregon, Delaware and Montana. Only Nevada has sports books.
PAPSA can only be rescinded by Congress or declared unconstitutional by the U.S. Supreme Court. If either takes place, all bets are off.
Silver wrote he would support Congress adopting a federal framework for sports wagering that includes strict regulatory and technological safeguards protecting the integrity of the game.
“Without a comprehensive federal solution, state measures such as New Jersey’s recent initiative will be both unlawful and bad public policy,” Silver said.
For now, Silver stands alone. His counterparts in the National Football League and Major League Baseball have been silent. NHL Commissioner Gary Bettman was noncommittal.
“(The) issue of legalized sports betting needs a lot more discussion before any decisions about government legalization and regulation can be made,” Bettman told Canada’s Globe and Mail.
Nevada is protective of its sports wagering industry, which saw $3.62 billion in wagers and revenue of $202.8 million in 2013. Both figures were records. Through September, wagering is up 7.4 percent and revenue is up 24.4 percent.
Freeman said a regulated industry protects consumers and integrity of the games.
Bell said the best example is the 1994 points shaving scandal involving players on the Arizona State University basketball team. Las Vegas sports book operators noticed unusually heavy wagering on four games involving the Sun Devils. They tipped off law enforcement in Phoenix and the FBI busted the operation.
“The gaming industry is committed to thwarting illegal gambling wherever it occurs,” Freeman said.
Howard Stutz’s Inside Gaming column appears Wednesdays and Sundays. He can be reached at email@example.com or 702-477-3871. Follow on Twitter: @howardstutz.