Sports Betting in the United States: the NBA Plan

By Prof John Wolohan, Syracuse University, New York, USA

On January 24, 2018, NBA Commissioner Adam Silver, speaking about the potential expansion of legalized sports gambling in the United Stated outside Nevada, outlined what the league would want to support legalized gambling.

The NBA wants 1 percent of every bet made on its games in addition to other regulations; a request that could create massive revenue for the NBA and other sports leagues in the future.

To illustrate how valuable this could be to the league: according to the Nevada Gaming Control Board, in 2016, over $4.5 billion was wagered in Nevada’s sports books.  Of that amount, $1,252 billion was bet on basketball.

While the extra money that the NBA could generate would be significant, the NBA has always worried that gambling would hurt the integrity of their games.

This was especially true after referee Tim Donaghy was sentenced to 15 months in prison in 2008 for his participation in the gambling scandal.  So why, less than 10 years after the sport’s biggest gambling scandal, is Adam Sliver talking about and the NBA seemingly happy with gambling on NBA games?

First, the truth is that the NBA and the other professional sports leagues may not have much of a choice.

On Monday, December 4, 2017, the United States Supreme Court heard legal arguments in Christie v. National Collegiate Athletic Association (NCAA) concerning the New Jersey attempt to change its laws to permit gambling on professional and college sport events in Atlantic City casinos and at the state’s horse racing tracks.[1]  The case, which has involved a long five-year legal battle between the State of New Jersey and the NCAA, MLB, NBA, NFL, and the NHL, examines whether the Professional and Amateur Sports Protection Act (PASPA) violates the United States Constitution. Most commentators believe that the United States Supreme Court is going to overturn PASPA and allow some form of gambling in New Jersey.

Second, the actions of the leagues, moving teams to Vegas and working with casinos and Daily Fantasy Sports, make the leagues’ concerns over sports betting having a negative impact on their games, seem hypocritical.

In fact, NBA Commissioner Adam Silver argued that “[g]ambling has increasingly become a popular and accepted form of entertainment in the United States,” and pointed to the “thriving underground business that operates free from regulation or oversight” as further support for his position that there is “an obvious appetite among sports fans for a safe and legal way to wager on professional sporting events.”[2]

While Silver may truly favor legalized sports gambling, getting 1 percent of the book might be more difficult.  Currently, the league gets zero.  Therefore, it is difficult to see why Nevada would willing hand over any money to the NBA.

As for the other states, after fighting with the NBA and the other leagues in the courts, it is hard to see why the states would hand over tax revenue to a group of billionaire owners who are already playing in taxpayer-funded stadiums.

[1] N.J. Admin. Code § 13:69-1.1, et seq. see also, N.J. Stat. Ann. 5:12A-1. (West 2012) (“New Jersey’s Sports Wagering Law” or “Sports Wagering Law”).

[2] Adam Silver, Legalize and Regulate Sports Betting, N.Y. TIMES (Nov. 13, 2014),   http://www.nytimes.com/2014/11/14/opinion/nba-commissioner-adam-silver-legalize-sports-betting.html.