The Case for Sports Gambling in America

10 minute read

On a recent Saturday afternoon, I settle into a plush leather couch at a burger joint inside Las Vegas’ new SLS Hotel & Casino with a cold beer and a crumpled ticket in my right hand. Prince is playing on the speakers and gourmet pub fare like ahi tuna burgers sits on the tables. I could be in any upscale sports bar, save for that piece of paper, which says that since I bet $100 on the University of Arkansas men’s basketball team, I will win $1,000 if the Razorbacks can somehow hand the Kentucky Wildcats their first loss of this college basketball season.

What’s so wrong with this picture? Nothing. But for the privilege of parting with $100 because Kentucky won in a rout, I had no choice but to travel to Nevada, the only state in America that allows full-on sports betting. Why should I have to fly thousands of miles to legally make a stupid decision?

The question is especially puzzling these days since gamblers in every corner of the country are seeing lots of action anyway. From March 17 to April 6, for example, almost $2.5 billion will illegally change hands in the U.S. This three-week college basketball bonanza, March Madness, is a frenzy of illicit gambling. But that’s just a fraction of the total amount won and lost under the table.

An estimated $140 billion per year is illegally wagered on sports in the U.S., according to the American Gaming Association (AGA). And yet at a moment when states across the country have relaxed gambling prohibitions and built hundreds of new casinos, a 1992 federal law bars sports betting everywhere except Nevada, Delaware, Oregon and Montana, states that allowed legal sports gambling prior to the law’s passage. (Today Delaware allows only certain types of bets on NFL games, and Montana offers state-licensed fantasy football and NASCAR games, while Oregon no longer has a sports-betting lottery.)

It’s time for that to change. Putting down $10 on the home team should no longer be illegal. Like drinking alcohol, gambling on sports is a socially acceptable behavior in moderation and can be a revenue source for cash-strapped municipalities. Currently, all that money is going to bookies and offshore websites. America is leaving millions on the table and not doing anything about the acknowledged downsides of gambling.

Plenty of other nations realize this. According to Global Betting & Gaming Consultants, 105 countries–including places where major U.S. professional sports teams play regular-season games–permit betting. The NFL, which actively opposes the further legalization of sports gambling, plays games in London, where storefront betting parlors dot the streets like Starbucks. And it’s widely believed that gambling, which includes not just calls to the local bookie but also fantasy sports and office pools, can boost fan engagement and the popularity of sports leagues.

America’s major pro sports leagues have long argued that gambling risks creating incentives for athletes to fix games, but recent comments from two commissioners are indicative of a broader shift in thinking. Although baseball’s official position against legalized gambling hasn’t changed, new MLB commissioner Rob Manfred tells TIME it is “incumbent” on him to revisit the issue with owners.

NBA commissioner Adam Silver has gone further, ending the league’s opposition to legalized pro sports gambling. Silver says his view evolved after seeing how European soccer fans stayed invested in games as they placed in-game wagers on their smartphones. “It’s part of the culture in Europe to bet on sporting events. Of course, it’s legal and regulated,” Silver tells TIME. “It’s part of the culture in the United States to bet on sporting events.” He adds, laughing, “It just happens to be illegal.”

A Flawed Law

The U.S.’s current prohibition on legal sports gambling dates to 1992, when Congress passed the Professional and Amateur Sports Protection Act (PASPA), outlawing sports gambling in 46 states. Given how more serious off-field issues, like domestic violence, have threatened to derail our enjoyment of sports, the arguments for PASPA now sound hopelessly quaint. “There is no greater threat to an athlete’s personal sense of accomplishment than state-legalized sports gambling,” former NFL star Mike Singletary told a Senate subcommittee in 1991. At the hearings, supporters of the law wore buttons with such slogans as Don’t Gamble with our Children’s heroes.

For a law designed to limit sports betting, PASPA has failed miserably. According to UNLV’s Center for Gaming Research, Nevada’s legal sports-betting market has more than doubled since PASPA’s passage, from $1.8 billion to $3.9 billion. While it’s not possible to accurately quantify the illegal market in the U.S., the AGA, a trade group that believes that current sports-gambling law is flawed, says it has been growing, from an estimated $80 billion in 1999 to $140 billion in 2014.

Such trends were supposed to ruin sports. “The spread of legalized sports gambling would change forever–and for the worse–what our games stand for and the way they are perceived,” former NFL commissioner Paul Tagliabue said in 1991. Yet while sports betting–legal and not–has skyrocketed, teams have only become more valuable. In 1991 the average NFL franchise was worth $125 million. Today, according to Forbes, an average team is valued at $1.43 billion.

Fears about game-fixing haven’t been borne out either. “There is absolutely no evidence that legalizing gambling leads to increased match fixing,” says Sean Patrick Griffin, a criminal-justice professor at the Citadel and the author of Gaming the Game, a book about former NBA referee Tim Donaghy, who pleaded guilty to passing inside information to illegal bettors.

Silver, for one, believes that gambling regulation could be a check on fixing. “Number one, I support it to protect the integrity of the game,” he says. “If we continue to see massive amounts of underground betting at our games, at a volume that we know–based on the information that we have–is growing rapidly, that creates more of an opportunity for inappropriate activities.” Which makes sense: Why would criminals expose themselves to regulated markets when the underground market is so much larger? Legal sports books have enormous incentive to monitor activity, because it’s their money on the hook if fixers win big bets.

Nor does it help that Congress passed a law intended to stop a vice while at the same time essentially giving one state a perpetual monopoly on that vice. “The grandfathering is a true oddity,” says Ryan Rodenberg, a sports-gambling-law expert at Florida State University. “I haven’t been able to find another law that mimics PASPA.”

Perhaps the greatest argument against PASPA is the meteoric rise of fantasy sports. Some 41 million Americans and Canadians played fantasy sports last year, according to the Fantasy Sports Trade Association, and it has become a key way for leagues to grow fan interest (and make additional revenue). Thanks to a carve-out in the 2006 federal Internet Gambling Prohibition and Enforcement Act, fantasy sports are considered a game of skill. But in spirit, playing fantasy and wagering on a game are essentially the same: you win or lose based on the unpredictable outcomes of sports.

Silver’s predecessor, former NBA commissioner David Stern, warned as recently as 2012 about legalized gambling creating so-called point-spread fans who leave the arena frowning because their favorite team won but didn’t cover the spread. His successor has a more pragmatic view. “If our main concern was that we only want fans rooting for our team to win, then we shouldn’t be in the fantasy sports business,” says Silver. In November, the NBA acquired an equity stake in the fantasy site FanDuel, which paid out more than $560 million in winnings in 2014. “In a perfect world, sure, I want a Nets fan to go to a game and only be satisfied based on the final score,” says Silver. “But that’s not realistic.”

The ticketing market offers a blueprint. Ticket scalpers, like gamblers, were once the bad guys. But in the past decade, sports teams have partnered with legit companies like StubHub, making it aboveboard to resell a ticket for profit. “There was such resistance to the secondary market,” says Jeanie Buss, president and part owner of the Los Angeles Lakers. “And instead it’s been something that’s been good to our fans, it’s been good for business, it’s created jobs. And those companies pay taxes.” Bringing sports gambling out of the shadows could create similar benefits.

Risks and Rewards

Even some PASPA proponents recognize that the current rules are a relic of the pre-Internet era. “If I were there, I would certainly look at it again,” says Dennis DeConcini, who introduced PASPA as a U.S. Senator from Arizona. “Times change, with the Internet and what have you.” Would he fix it? “I could be convinced,” he says.

In January, Arizona Senator John McCain, DeConcini’s former colleague, said Congress should hold hearings on revisiting PASPA. Meanwhile, legislation is pending in five states that would legalize sports gambling. But it’s a fight in New Jersey that may be the first true test of the law. In October, Governor Chris Christie signed a bill legalizing sports gambling at the state’s casinos and racetracks. Major U.S. pro sports leagues and the NCAA sued to block the measure, and an appellate hearing is scheduled for March 17.

New Jersey’s rationale is simple. When PASPA became law, Nevada and Atlantic City, N.J., were the only major casino destinations in the nation. Since then, states across the country have turned to gambling–from lotteries to full-fledged casinos–to fill their coffers. Since 1989, 21 states have opened 236 commercial casinos, according to the AGA, while there are now 483 gaming operations on Native American reservations in 29 states.

So why exclude sports? New Jersey thinks sports betting could boost its ailing Atlantic City casinos. Sports books would create service jobs and white collar positions, including ones for lawyers, accountants and regulators.

Any gains from sports gambling undoubtedly come with potential costs. Gambling addiction is a recognized psychological disorder. Yet the National Council on Problem Gambling, the country’s largest advocacy organization for betting addicts, takes a neutral position on legalization. “We would just hope that if sports gambling was more widely legalized, some of the profits would go toward getting help for people who needed it,” says executive director Keith Whyte.

One thing is certain: there will be plenty of profits. In Vegas, after losing my first bet of the day, I walk to the 30,000 sq. ft. (2,800 sq m) Westgate Las Vegas SuperBook, the largest sports-betting venue in town. Hundreds of seats face dozens of big screens, and when games come down to the wire, the crowd goes berserk. It’s like watching a game in an arena.

Believing I’ve learned my lesson, I place a few smaller bets: $20 on Syracuse, which is trailing Duke by nine at halftime, to lose by four points or less, and another Jackson on the Dallas Mavericks, at home, to cover the eight-point spread against the bum Brooklyn Nets. And another $40 gone. The Dukies crush Syracuse. The Nets win by 10. Hey, just because something is legal doesn’t mean you have to be dumb enough to do it.


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