Wanna Bet? The Supremes Say… “Maybe.”

 

Six years ago, faced with a gaping hole in the state budget, New Jersey Governor Chris Christie decided the way to fill the coffers was to offer legalized sports betting. All four major professional sports leagues and the NCAA immediately objected and sued to stop it. Their hammer was the Professional and Amateur Sports Protection Act – or PASPA.

PASPA was the brainchild of Bill Bradley, the three-term Senator from the Garden State. It sought to stem the spread of sports betting after three states added sports games to their lotteries to accompany the already legal sports books found in Nevada. Bradley, who is a Basketball Hall of Famer, understood that the only thing that separates professional sports from professional wrestling and roller derby is the idea that the games are on the up-and-up. When the law was passed in 1992 we were just three years removed from Pete Rose’s lifetime banishment from baseball and mere months from Michael Jordan’s first retirement from the NBA.

Jordan, fresh off his second championship with the Bulls, was called to testify in the trial of drug dealer James Bouler. Among his possessions when Bouler was arrested was a personal check from Jordan for $57,000. Originally it was claimed to be a personal loan but later Jordan admitted it was to cover a weekend’s worth of illegal gambling. Jordan took his contract with Bulls and White Sox owner Jerry Reinsdorf and hit the minor leagues with the Sox AA affiliate in Birmingham, AL.

Fast forward to Tuesday morning. Before recessing for the summer, the Supreme Court granted certiorari to hear New Jersey’s appeal. Times have certainly changed.

For one thing professional sports are no longer shunning gambling like they used to. Almost all pro sports teams accept casino advertising for their stadiums and in their radio broadcasts. The NFL has approved the move of the Oakland Raiders to Las Vegas and the NHL expansion Vegas Golden Knights begin play this October. Furthermore, Albert Breer of Sports Illustrated reports that the heads of the pro players unions have been meeting in New York off-and-on for the last 18 months to deal with the issue of game integrity.

What then, are New Jersey’s chances? Michael McCann, SI’s legal analyst, sets out the Garden State’s argument:

New Jersey asserts that PASPA requires—“commandeers”—New Jersey to prohibit sports betting under New Jersey law. From this lens, PASPA forces New Jersey to act against its own will. In that same vein, New Jersey asserts, PASPA interferes with the sovereignty of states to decide whether sports betting ought to be lawful. As a corollary argument, New Jersey has argued that by empowering Nevada to maintain its sports betting scheme, PASPA violates what is sometimes called the “equal sovereignty doctrine.” Under equal sovereignty, states are owed equal treatment from the federal government. New Jersey contends that Nevada has received preferential treatment from the federal government. Of encouragement to New Jersey, U.S. Supreme Court Chief Justice John Roberts has repeatedly stressed the importance of the federal government treating states equally.

The sports leagues have already learned how to live with legalized gambling to a certain extent. Canada offers sports betting but with the caveat that you can only bet as a parlay, that is, you cannot place a bet on just a single game. The thinking is that gamblers would have a much harder time fixing multiple games on the same day.

The larger issue is one that goes beyond the leagues. Is it really a road we want to go down? We know state lotteries are the most regressive form of taxation. The rich do not buy lottery tickets. It’s estimated that illegal betting annually reaches just south of the $400 billion mark*. (About $15B of that is centered on just two events, the Super Bowl and March Madness.) Over a decade ago it was estimated that up to 3 percent of the adult population of the US had a gambling problem and 3 million of those could be classified as “pathological.” A Baylor University study estimated that each problem gambler costs the economy around $10,000 per year. But lives are not necessarily the bottom line on a ledger sheet. Every one of those individuals represents a lot of emotional destruction in a family that just can’t be measured.

If the Supremes side with New Jersey, the dominoes will fall quickly. Decades of deficit spending has put a lot of states on the brink of insolvency. As with lotteries and casinos, no state will surrender the income to be had from their citizens to adjoining states. The politicians will take the money, pat themselves on the back for the cleverness of their revenue scheme, and assuage their consciences with an 800-number on a handful of billboards.


* This number was asserted in a recent speech by NBA Commissioner Adam Silver. Silver has gone on the record as accepting legal sports betting as inevitable.

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  1. Jimmy Carter Member
    Jimmy Carter
    @JimmyCarter

    EJHill: The politicians will take the money, pat themselves on the back for the cleverness of their revenue scheme, and assuage their consciences with an 800-number on a handful of billboards.

    Boy, You ain’t kiddin’. And those billboards are paid for with those very sin taxes, too.

    Edit:

    Now, that I think about it, the politicians would just pass a law mandating the House (casino) pay for the billboards.

    • #1
  2. The Reticulator Member
    The Reticulator
    @TheReticulator

    As long as gambling addiction is covered by ObamaTrumpCare, what’s the problem?

    • #2
  3. Mike LaRoche Inactive
    Mike LaRoche
    @MikeLaRoche

    State lotteries and now this. Sad.

    • #3
  4. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    For years governments have taken billions (particularly in Canada) from the taxes on liquor and not given a thought for alcoholics. For years they prosecuted organized crime for running numbers, then they came out with Lotto. Whats a crime today? It’ll someday be a government revenue stream? Pot is just the beginning. Meth, Heroin, E, prostitution. We’ll have government of the corrupt leading and regulating the corrupt. Corruption for all, and all for corruption!

    • #4
  5. Drusus Inactive
    Drusus
    @Drusus

    Well, one thing is for sure, I’m sick to death of people being stripped of awards and achievements because of misdeeds off the court/field/ring. Let them suffer legal consequences and leave the game alone. Pete Rose deserves to be recognized in the Hall of Fame, and no assistant coach’s crimes can truly remove the wins of Joe Paterno.

    Doping is a different story, as it certainly affects the validity of the achievements.

    • #5
  6. Vice-Potentate Inactive
    Vice-Potentate
    @VicePotentate

    According to the abstract for the Baylor study.

    A significant portion of the “social cost” is in the form of law enforcement spending and incarceration, which would presumably go down with legalization. Another significant portion places a causal effect on gambling where no such conclusion can be drawn. Gamblers suffer from the primary affliction of the lower class in America, which is to prioritize short term pleasure over long term pain. Attributing divorce and suicide to gambling is tricky given this a priori assumption. Would gamblers’ thrill seeking behavior take other forms if gambling was not available? I guess we just don’t know because there is no control group in these studies.

    Attributing a current social cost to gambling is fine, as far as it goes, but extrapolating costs after legalization is a bridge too far for me.

    • #6
  7. Duane Oyen Member
    Duane Oyen
    @DuaneOyen

    It’s the same “libertarian” argument as gets tossed out regarding drugs.  Civil society is not allowed to protect itself from large scale pathologies because to do so “interferes” with an individual’s “right” to destroy himself, and we can’t have any state (generic, not US) protecting itself at the cost of individual liberty.

    So, instead we have the gradual destruction of whole societies as blue-haired ladies pull slot levers (see Kevin Williamson) and gamblers undercut sports integrity.

    • #7
  8. thelonious Member
    thelonious
    @thelonious

    If games are being fixed it isn’t thru legal casinos.  It’s too easy to trace.  The people who run the different leagues especially the NFL know they’ve benefited from people gambling on their sport.  It seems they’re wising up to this and know it would cut down the possibility of game fixing if sports betting was legal.  I have no problem with this as long as it doesn’t become a government monopoly like the lottery.

    • #8
  9. A-Squared Inactive
    A-Squared
    @ASquared

    Meh. We are talking about adding an additional form of gambling in a state where gambling is already legal. It won’t give the state much in additional gambling revenue  and it won’t create many new gambling addicts.

    To me, this is an issue where the states can decide for themselves

    • #9
  10. Umbra Fractus Inactive
    Umbra Fractus
    @UmbraFractus

    If the games are being fixed, address that problem. The government has no business banning a mostly harmless recreational activity. Yes, there are gambling addicts out there, but we don’t use the existence of alcoholism to justify bringing back Prohibition.

    • #10
  11. Songwriter Inactive
    Songwriter
    @user_19450

    EJHill: If the Supremes side with New Jersey, the dominoes will fall quickly. Decades of deficit spending has put a lot of states on the brink of insolvency. As with lotteries and casinos, no state will surrender the income to be had from their citizens to adjoining states.

    I was genuinely surprised when both Texas and Tennessee (bastions of religious & fiscal conservatism) legalized a state lottery. To my knowledge, neither were running deficits. But millions of dollars were being lost to neighboring states offering the lottery.

    Sad.

    • #11
  12. Patrick McClure Coolidge
    Patrick McClure
    @Patrickb63

    Umbra Fractus (View Comment):
    If the games are being fixed, address that problem. The government has no business banning a mostly harmless recreational activity. Yes, there are gambling addicts out there, but we don’t use the existence of alcoholism to justify bringing back Prohibition.

    UF is correct.  Alcohol prohibition as a moral control was horrible.  Gambling prohibition as a moral control is equally as bad.  Punish those who transgress and leave responsible adults alone.

    • #12
  13. KC Mulville Inactive
    KC Mulville
    @KCMulville

    Why do poor people play the lottery? Because one dollar isn’t going to get them out of poverty anyway. That one dollar isn’t going to make the difference between having medical insurance or a car. Which means, one dollar’s chance of getting out of poverty is zero. But if you hit the lottery, even if the odds are infinitesimal, it’s better than zero. It’s similar to the reason that poor people buy expensive sneakers; if you’re not going to get out of poverty anyway, why not enjoy it while you can? At least it’s something.

    EJ’s right; rich people don’t buy lottery tickets. But that’s because they have a realistic path to achieving financial stability, not because they’re any wiser. Poor people don’t buy lottery tickets because they think it’s an effective strategy; it’s because when the chances are zero to zero-point-two-thousand, it doesn’t matter anyway.

    That’s the real problem – that sense that it doesn’t matter anyway.

    • #13
  14. EJHill Podcaster
    EJHill
    @EJHill

    Since the election of Donald J. Trump we’ve all gotten an earful about ethics and principles from our friends on both the right and the left. What’s ethical and principled about a government that purchases power and pays for its own lack of responsibility by enabling the vices and the most base behaviors from its citizens?

    We’ve so exhausted our abilities to suck revenue out of people’s accomplishments we’re now stuck preying on their weaknesses – gambling and the consumption of mind altering substances. If the state could find a way to put a monitor on your genitalia they’d probably tax that, too.

    The problem is in the promotion of the activity. While gambling will always exist it has a base that will not necessarily grow, that is until the state starts promoting it. The billboards and news stories about Powerball jackpots encourage people into non-productive spending. Wait until states start competing with other by announcing their NFL playoff payouts.

    I don’t particularly worry about the professional leagues. Nobody bets on pro wrestling so the state would have a compelling interest in keeping those entities “clean.” Players who fritter away their contracts will always be the weakest links. But the temptations and the bigger disaster would lie with NCAA football and basketball.

     

    • #14
  15. Z in MT Member
    Z in MT
    @ZinMT

    EJ,

    I think many conservatives would agree that sin taxes are inherently hypocritical. However, this is a separate question from whether gambling should be legal or not.

     

    • #15
  16. Z in MT Member
    Z in MT
    @ZinMT

    KC Mulville (View Comment):
    Why do poor people play the lottery? Because one dollar isn’t going to get them out of poverty anyway. That one dollar isn’t going to make the difference between having medical insurance or a car. Which means, one dollar’s chance of getting out of poverty is zero. But if you hit the lottery, even if the odds are infinitesimal, it’s better than zero. It’s similar to the reason that poor people buy expensive sneakers; if you’re not going to get out of poverty anyway, why not enjoy it while you can? At least it’s something.

    EJ’s right; rich people don’t buy lottery tickets. But that’s because they have a realistic path to achieving financial stability, not because they’re any wiser. Poor people don’t buy lottery tickets because they think it’s an effective strategy; it’s because when the chances are zero to zero-point-two-thousand, it doesn’t matter anyway.

    That’s the real problem – that sense that it doesn’t matter anyway.

    I would add that people play the lottery because it is a cheap form of entertainment. See, when you are lower middle class and you have a lottery ticket in your hand, you can spend hours fantasizing what you would do if you won the lottery. People are bad at understanding probabilities, but they do know that you can’t win the lottery if you don’t buy a ticket. So, without the purchase of the ticket they cannot fantasize.

    • #16
  17. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    EJHill: We know state lotteries are the most regressive form of taxation.

    If we are going to look at lotteries as a form of taxation, it is the fairest tax ever invented.  It’s the only tax where people go into stores and ask to pay the tax.  Anybody who doesn’t want to pay that tax doesn’t have to.  And to a lucky few who get this particular tax refund, it is enormous.

    • #17
  18. SEnkey Inactive
    SEnkey
    @SEnkey

    I agree with those expressing discomfort about the state of our society and government. I would just add that the way to address this is through culture not law. I have no principled legal objection to gambling. I do have serious moral objections to it. This is where churches, philanthropic organizations, and societies come in, they should be shaping society so it doesn’t matter what the law is. I think this is where Putnam’s “Bowling Alone” gets so much right. For many people these forms of entertainment are a way to belong to something. Show up at a casino enough and you are a member, and they will shower you with incentives and gifts. Gone are the days where men joined the Rotary club etc. And that isn’t a class distinction, my grandfather grew up in little Norway in Chicago in the 1930’s. His family was full of poor immigrants, but they all belonged to some sort of fraternal, neighborhood, or relief society in the area. That just doesn’t happen anymore, they aren’t as available, we aren’t raised to look for them. Creating a healthy layer of local societies would do a lot more to help the lottery buying types than keeping gambling illegal.

    • #18
  19. Jimmy Carter Member
    Jimmy Carter
    @JimmyCarter

    KC Mulville (View Comment):
    Why do poor people play the lottery? Because one dollar isn’t going to get them out of poverty anyway. That one dollar isn’t going to make the difference between having medical insurance or a car. Which means, one dollar’s chance of getting out of poverty is zero. But if you hit the lottery, even if the odds are infinitesimal, it’s better than zero. It’s similar to the reason that poor people buy expensive sneakers; if you’re not going to get out of poverty anyway, why not enjoy it while you can? At least it’s something.

    If that’s the case, then that’s one of the reasons why They are poor and will remain poor; Their perspective on money and how it grows (or doesn’t).

    • #19
  20. Martel Inactive
    Martel
    @Martel

    Duane Oyen (View Comment):
    minutes

    It’s not like current opposition to legalized gambling is exactly consistent.  “Large scale pathologies” are perfectly fine when they’re the means by which people spend their paychecks on lottery tickets and bar kino, but when some friends get together for poker, all of a sudden gambling is some massive vice that society needs to wipe out.  Losing your money to Fred from the plant is a societal ill that must be crushed, but lose your money to the State of Ohio and it’s wonderful because the right people benefit from your weakness.

    We’re not going to win the “War on Gambling” when governments openly advertise and promote gambling any more than we’ll win the “War on Drugs” as we drug every kid who can’t sit still for boring teachers.

    When the anti-gambling crowd starts fighting state lotteries I’ll respect their views, even if I ultimately disagree.  Until then, I call hypocrisy.

    • #20
  21. The Reticulator Member
    The Reticulator
    @TheReticulator

    Martel (View Comment):
    When the anti-gambling crowd starts fighting state lotteries I’ll respect their views, even if I ultimately disagree. Until then, I call hypocrisy

    What do you mean “until?” That happened long ago.  Many people fight that kind of gambling more than any other.

    • #21
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