The NCAA and the Legalization of American Sports Betting
As the battle for legitimization of the sports betting industry rages with New Jersey’s Christie vs NCAA, it’s hard for the general public to predict where things will end up. Earlier this week, the nation’s highest court announced it would be issuing decisions on Wednesday morning. Well, Wednesday came and went without so much as a peep from the Supreme Court.
But amidst SCOTUS’ silence, states and organizations alike have weighed in on the impending decision. A great deal of speculation and legislation efforts have cropped up in the two and a half months since oral arguments took place.
In Missouri, five sports bills have been introduced; the two most recent ones — introduced this week — have the full support of two of America’s biggest sports organizations: the NBA and the MLB. And their sponsors have begun a major PR push for their legislation.
Missouri state Sen. Denny Hoskins and state Rep. Dean Plocher introduced their respective sports betting bills last week.
The bills constitute a unified push in the Show Me State to legalize what has been estimated as a $3 Billion industry in Missouri alone. For years the NBA and MLB have been lobbying for legalization. Many believe these bills, called the Comprehensive Missouri Sport Betting and Sports Protection Act, will be the most appealing and successful pieces of legislation to date. With the blessing of two major sports leagues, the two lawmakers believe the bills will gain the traction needed to pass.
Here’s Hoskins, in a press release from the lawmakers:
“It’s been estimated that illegal sports betting takes place to the tune of nearly $3 billion dollars a year in Missouri. The time has come to stop pretending a problem doesn’t exist, and bring this activity into the sunlight, create some oversight, while bringing in new revenue to the state as well as jobs and economic activity at our casinos.
But we have to do this the right way, and that means strict, anti-fraud requirements and tight coordination with the sports leagues to ensure Missourians can remain confident games are being played with integrity.”
Why are the NBA and MLB so on board? Well, as it stands, the bill gives the leagues expansive control over how sports betting would go down in the state. So of course, they like it. Included in the bill is an integrity fee — a one percent tax on all wagers paid to the leagues — for which the leagues have been pushing. That “fee” equates to the leagues getting roughly 20 percent of all revenue.
The bill also gives the leagues access to personal bettor information and control over data rights.
More from the presser:
The legislation also allows a sport’s governing body to limit or restrict betting on their own sports and requires that betting operators retain all information regarding bets for three years.
In addition, the legislation requires casinos to keep 1 percent of the total amount wagered on a sporting event to pay toward a sports betting right and integrity fee. This administrative fee pays for the sport’s governing body’s cost of maintaining the integrity of its sporting events. The legislation also creates penalties for those found guilty of match-fixing and any action associated with the corruption of a sporting event.
It seems the greatest fear surrounding legalization is the compromise of sporting integrity — obviously in a world where sports betting is legal there will be those individuals who seek to rig games and fix matches.
The NCAA’s Deep-Seeded Feelings
In a state where Ole Miss college football reigns supreme, Republican state Rep. Roun McNeal has pushed a bill that would ban sports betting in the event that a Supreme Court decision legalizes it nationwide this year. His move runs counter to the efforts of lawmakers in more than 20 states nationwide who have been hard at work crafting legislation to legalize sports betting. Those lawmakers want to make it easy for their states to reap the rewards. But not in Mississippi.
Rep. McNeal had this to say at press time:
“We don’t want to be caught with our pants down.”
More specifically, he means to say that the state of Mississippi does not want to open the door for collegiate games to be messed with. And they are not alone.
Ironically, we are where we are because of the NCAA. When New Jersey began its push to legalize sports betting in the state, it was the NCAA who pushed back.
On its website, the NCAA features a page called ‘Sports Wagering Enforcement,’ which states clearly their position on the matter:
“The NCAA opposes all forms of legal and illegal sports wagering, which has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community.”
Across the country, a number of critical players in statehouses, as well as sports organizations such as the NCAA, want to put a stop to the momentum that legalization currently has, citing concerns over the potential compromised integrity of games and worries over the economic and social impact of sports gambling.
Tom McMillen, the president and CEO of the NCAA Division I Athletic Directors Association — which recently rebranded itself as Lead1 — wasn’t shy about his group’s concerns.
“There are some deep-seeded feelings that this is a particularly delicate situation in the college arena,” said McMillen, a retired professional basketball player and a former Democratic congressman from Maryland.
Education Fraud and the Compensation Conundrum
Here’s the thing: college athletes don’t get paid — not even in basketball and football where money flows like dirty rainwater into the pockets of the NCAA elite. The 231 NCAA Division I schools with data available generated a total of $9.15 billion in revenue during the 2015 fiscal year, of which athletes saw nothing.
But, hey, at least they’re receiving full-ride scholarships to get their educations. Never mind the incomplete nature of those educations.
Noting that unpaid college athletes are especially vulnerable to large amounts of money flowing through their game and that “there is a serious concern as to where all this new money would go,” McMillen said that nearly 80 percent of the members of Lead1 were opposed to legalized sports betting.
“These kids are on scholarship. Listen, we’ve seen point-shaving scandals before,” he said. “We’re concerned.”
Perhaps, if the NCAA addressed the glaring issue of making millions off of predominantly black athletes who are receiving fraudulent educations under the guise of a ‘full scholarship,’ those athletes wouldn’t be as susceptible to point-shaving opportunities. The integrity of collegiate games is intrinsically blemished by the NCAA’s unwillingness to pay their athletes. It would seem their anti-legalization efforts are somehow connected to their stance on athlete payment. Having explicitly stated that the NCAA has no legal responsibility to make sure education is actually delivered to its athletes, it’s hard to take McMillen’s concerns seriously. Nonetheless, their efforts, both publicly and behind the scenes, could go a long way in helping to shape the national legal landscape on sports gambling before and after the expected ruling by the Supreme Court.
Would Legalization Worsen Poverty in the South?
All this being said, the NCAA’s concerns over legalization are not entirely without basis. MS Rep. McNeal also expressed fears that legalizing sports betting could subject Mississippi residents — already the poorest in the nation, according to 2016 Census data — to further economic hardship.
“There are a balloon of studies that show that people on the lower end of the economic spectrum are the ones who spend most of their money on lottery tickets, on sports gambling,” he said.
Certainly, the diehard fans of Southern collegiate football teams would be inclined to wager on their favorite teams—but the fact is, sports betting is a multi billion dollar industry that would put tax revenue back in the pockets of state residents. That money could help build economic and educational infrastructures that in turn help families who need the support. But none of that is possible without the NCAA’s support.
Options Moving Forward
The NCAA is not without recourse to build a successful, morally upright system of sports betting — case in point Sen. Hoskins and Plocher’s bill. Their legislation seeks to place the regulatory controls in the hands of the leagues themselves.
This would be the easy option for an organization that fears for a loss of integrity in gaming. The NCAA could simply back off, and instead get involved in creating the proper legal framework and funding for integrity monitoring, enforcement and consumer protections. As of now, according to McMillen, the NCAA has done neither.
Meanwhile, the NBA and MLB, despite joining up with the NHL, NFL and NCAA in the suit to fight New Jersey’s legalization push, continue their efforts to help push for state legislation that would legalize sports betting under terms favorable to them.
That push began with the NBA but the MLB quickly followed suit and began lobbying state legislatures. The NFL and NHL have not taken an official position on expanded sports betting.
Still, McMillen has predicted that the NCAA and lawmakers in the southern states will remain opposed for the time being — even if that means, as Rep. McNeal said, “getting caught with their pants down.”