In 2018, the landscape of sports in the United States changed for the foreseeable future but not because of anything that happened on a court or field.
Instead, the change stemmed from the Supreme Court striking down a federal law that did not allow states to oversee legal sports betting with a few exceptions such as Nevada. The flood gates opened for states to authorize gambling in their territory for the first time since 1992.
However, it is naive to think that sports betting was only taking place in the states that were grandfathered into the 1992 law. Illegal gambling is a billion dollar industry by some estimates. With states now having the ability to regulate this business, governments will now be able to institute taxes on sports bets thereby increasing governmental revenue.
For example, Rhode Island has issued a 51 percent tax on winnings. According to the governor of the state, the projected increases will go into the state’s general fund, helping to improve schools and roads. No wonder 18 states sued the federal government to overturn that law.
Professional leagues will also earn more money from this change. The NBA especially has pushed for this change. In 2014, NBA Commissioner Adam Silver wrote an op-ed for the New York Times advocating for legalized sports gambling, arguing that the increasingly popular hobby needs regulation. What he doesn’t mention, though, is that the NBA would profit greatly from the overturned law. Indeed, in July 2018, two months after the Supreme Court’s ruling, the NBA announced a partnership with MGM Resorts International, the first ever such agreement between a professional league and a gaming company.
Another argument for the benefits of legalized sports gambling is the personal freedom awarded to citizens. As mentioned earlier, it is not as if people weren’t betting on sports; they were just doing under the table deals or using untrustworthy websites. Now, it is no longer a federal crime to bet for your favorite team.
But for all the benefits, there is a reason that the law was passed almost three decades ago. Legalized gambling on sports presents the potential for the “integrity of the game” to be fatefully ruined, according to Silver. In other words, sports betting is such a profitable industry that it would be easy for someone to abuse the system. We have seen multiple examples of this historically.
Let’s travel back to 1919.
In perhaps the greatest American match fixing scheme in history, eight players on the Chicago White Sox supposedly fixed the World Series, purposely losing to the Cincinnati Reds for large payouts on the bets they placed on their own game.
Fast forward to the latter half of the 20th century.
One of the greatest baseball players of all-time, Pete Rose, was banned from baseball after an investigation by the MLB uncovered the fact that Pete Rose bet on his own games as a manager for the Cincinnati Reds. It never appeared that he fixed any of his own games, but the fact that he bet on them has continued to shadow his career. Rose, the all-time leader in career hits, still is not in the Hall of Fame.
And then there’s 2007, when NBA referee Tim Donaghy was caught helping a friend gamble enormous sums of money on the games he refereed. Donaghy continues to deny that he ever made calls to fix games, but ESPN recently published an in-depth article, featuring dozens of interviews that conflict with Donaghy’s story. According to multiple people involved in the scandal, Donaghy did in fact intentionally fix games, although FBI and NBA investigations could never prove that fact. It is estimated that Donaghy’s scandal generated millions of dollars for those involved.
These are just three examples that prove how gambling can affect the integrity of sports. Some argue that legalizing sports betting will allow for increased regulation from professional leagues, hopefully preventing players, coaches, referees or anybody involved from profiting on their ability to alter the outcome of contests. But there is no guarantee that leagues will be able to catch every possible issue.
Each individual person will have a different opinion on this subject due to its innate polarizing nature. And there are great benefits, specifically for leagues and governments who stand to benefit from the ballooning industry. In general, the increased revenue arguably outweighs the potential scandals that might arise. While the arguments against sports betting are legitimate as evidenced by historical developments, the infrequency of such debacles makes it a no-brainer for forward-thinking leagues, governments and people to accept and even embrace sports gambling.