by EJ Fagan
January 4, 2024
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NOTE: The following comes from EJ Fagan's substack page and is shared with permission.
Please check out EJ's substack page for more great articles.
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In 2017, the Supreme Court sided with the State of New Jersey in Murphy v. National Collegiate Athletic Association, overturning the Professional and Amateur Sports Protection Act (PASPA) of 1992. PAPSA had banned sports gambling outside of a few states like Nevada.
New Jersey argued that the law requires states to enforce federal law, but New Jersey wanted to regulate its own sports gambling industry and let Atlantic City casinos and online operations offer bets on sports. The court ruled that while the federal government could potentially regulate sports gambling itself, it could not commandeer state governments to do so.
Since then, gambling advertising has taken over American sports media. I watch a lot of New Jersey Devils games. A massive portion of the broadcasts are dedicated to gambling. Drop-ins report live odds and prop bets in between play. During intermissions, the MSG Network host some guy from a gambling website speculate about the odds. During commercials, multiple online outlets run a combined dozen or more ads each game.
I don’t have a moral problem with gambling. When I lived closer to a good poker room, I used to go to the Maryland Live! casino to play on the weekends. I played a little Daily Fantasy Sports when it first hit the internet, until I realized that I was hopelessly playing mostly against well-tuned hedge fund algorithms. I’ve played a lot of normal fantasy baseball with friends with a decent amount of money on the line. If people want to gamble on baseball, I think it is reasonable to let them.
My problem with the status quo is how predatory the sports gambling industry and sports media partnership has become. Gambling is addictive. My guess is that a tiny fraction of the viewing audience will ever go to ESPN Bets or FanDuel or DraftKings or some other site to place a bet on the game. But, those that do place a lot of bets, making the casinos a lot of money. The goal of advertising is to get you hooked, then slowly suck every dollar they can out of you. While I’m sure that some of the sports gambling whales can afford it, I’d guess that most sports gambling addicts can’t. Sports teams and media are complicit in preying on their fan and viewers.
Like any other race to the bottom, state-by-state regulation will always fail. The internet makes it effortless to place a bet even if your state bans sports gambling, so any state bans will do little to reduce gambling at the cost of state taxes. That’s why the U.S. Constitution gives Congress the power to regulate interstate commerce. The federal government needs to act. What can they do?
Option #1: Ban Sports Gambling Entirely
I wouldn’t be upset if Congress passed a law banning sports gambling. With so much money on the line, we’re going to eventually see major scandals. College basketball has long had a point-shaving problem. But, as I mentioned above, I think there is also a good case to let adults have some fun and place a few bets.
Option #2: Limit Sports Gambling to Physical Casinos
The real 2023 problem, in my mind, is that sports gambling is too easy. The internet decreases all friction in virtual transactions. It’s too easy for someone to see an ad with a nice teaser incentive, pick up their phone, and start down the road to a gambling addiction.
So let’s add some friction. Keep sports gambling legal, but force it to take place in physical, brick-and-mortar casinos. States could decide what a casino is, or Congress could set some criteria. I don’t want every corner bar to become a “casino”, but I think that even forcing someone to go outside will make it easier to avoid gambling addictions. And maybe my friends and I can take a day trip to Atlantic City and place a few bets. It’s fun.
Option #3: Ban Sports Gambling Advertising
Lots of countries limit advertising on cigarettes and other addictive substances. Let’s ban sports betting advertisements to make it harder for sportsbooks to hook new addicts.
I like this option the best. It does not infringe on anyone’s freedom to go out and place a bet. It simply reduces predatory behavior on the part of advertisers and their partners. Lots of people will still gamble, but many fewer than will without a policy change.
Congressman Paul Tonko, who represents Albany, has introduced the Betting Our Future Act. The law would ban sports advertising on television and radio. It’s a good start, although the bill has not yet received a hearing. I’d recommend adding a ban on “teaser rates” to lure in gamblers, like free bets for new sign ups. If you support the bill, call your member of Congress and let them know. I just called mine.*
* A quick political science lecture. Legislation takes time. Tonko’s bill is a very simple attempt to get the ball rolling, not something that will pass tomorrow. We need members of Congress who prioritize the issue, engage with stakeholders and bureaucrats, and get a more developed, bipartisan and negotiated bill through the legislative process. Then, when some window of opportunity for policy change opens up, such as through intense media coverage of a scandal, they can pull a well-developed bill off the shelf and offer it as a solution to the problem. Calls to your member’s office help them realize that their constituents are concerned about a problem and may encourage them to make it a priority.
