Why pro sports are rethinking bans on betting

Slowly but surely, professional sports leagues are warming to the idea of fans gambling on their games, largely as a way to connect with them in a digital world that makes it increasingly hard to get their attention.

 Major League Baseball Commissioner Rob Manfred said last week he was re-examining baseball’s ban on wagering, which dates back nearly a century to the 1919 Black Sox Scandal. That’s when mistreated Chicago White Sox players acted in cahoots with gamblers to purposely lose the World Series.

“Sports betting happens,” Manfred said at a Yahoo Finance conference. “Whether it’s legalized here or not, it’s happening out there.”

Manfred didn’t disclose what options were being considered as part of the review, and an MLB spokesman wasn’t aware of any timetable for when a decision may be reached. National Basketball Association head Adam Silver embraced the idea of sports gambling in a New York Times op-ed in 2014. At the time, Manfred expressed support for Silver’s column.

“Baseball has been largely silent on the issue since then,” said Daniel Wallach, a sports law expert at the Florida law firm Becker & Poliakoff. “I don’t think this is so much baseball’s evolution on the issue as much as it’s a recognition of the reality that’s occurring.”

Other sports leagues, however, remain leery about gambling

National Football League Commissioner Roger Goodell noted during the recent Super Bowl that the nation’s most popular sport needs to “make sure that there’s a fine line between team-sports gambling and the NFL” to protect the integrity of the game. And the National Hockey League has opposed efforts to legalize sports betting both in the U.S. and Canada. 

But both leagues have plans to put franchises in Las Vegas and have partnerships with operators of daily fantasy sports sites, as does MLB. An NFL spokesman declined to comment beyond Goodell’s statement, and a spokesman for the NHL couldn’t be reached.

The NCAA also remains opposed to sports betting because it “threatens both the integrity of the game and the well-being of student-athletes,” according to spokeswoman Emily James.  

“The NCAA is at risk for corruption in a way that the NFL isn’t because the NFL is paying even their lowest-paid guys $450,000,” said Victor Matheson, a sports economist at the College of the Holy Cross, while college athletes don’t receive any monetary compensation.

Sports gambling is illegal in most states, though the prohibition is widely ignored. A 2015 estimate from the American Gaming Association shows that $150 billion is illegally wagered annually at offshore casinos and local bookmakers, among other places. Gamblers wagered almost $5 billion just on last weekend’s Super Bowl.

In another twist, New Jersey is challenging restrictions on sports betting in the 1992 Professional and Amateur Sports Protection Act (PASPA) in federal court. According to Wallach, the Supreme Court recently invited the U.S. solicitor general, who represents the government in cases before the court, to submit its position on the law and whether the high court should hear the case.

That was a usual move and indicates that the court is interested in taking the case, he said.

“That was a game-changer,” Wallach said. “Many were skeptical that New Jersey would ever be able to convince the Supreme Court to hear the case. ... If the court reviews the case, it’s probably more likely than not that the federal law will be invalidated on constitutional grounds, and that will open everything up.”

Several experts in sports law and economics believe wagering on sports will be legalized in coming years because team owners have no other choice, especially when the NFL -- a TV ratings juggernaut -- saw a drop in viewers this season. The change, however, may be gradual.

As Jodi Balsam, an associate professor at Brooklyn Law School, put it: “They’re confronting a new digital world order in which their reliable revenue streams may be shrinking.”

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.