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Why Major League Sports Are Freaking Out About a New Attempt to Legalize Betting on Their Games

Would league sports support gambling if they could profit from it?

“On January 17, 2012, New Jersey Governor Chris Christie signed into law an Act passed by the New Jersey State Legislature purporting to permit wagering at casinos and racetracks on the results of certain collegiate and professional sports or athletic events. On July 2, 2012, pursuant to the Sports Gambling Law, the New Jersey Division of Gaming Enforcement published proposed regulations concerning the licensure and operation of sports gambling in Atlantic City casinos and at New Jersey's racetracks….The public comment period for the Sports Gambling Regulations ends on August 31, 2012. Once these regulations become effective, which is expected to occur within the next two months, Atlantic City casinos and racetracks across New Jersey will be able to apply for licenses and commence gambling operations on amateur and professional sports.”

Thus begins the lawsuit brought forth by the NCAA and the four major sports leagues—the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), and National Hockey League (NHL)—in an attempt to stop New Jersey from legalizing sports gambling.

The state’s new law violates the Professional and Amateur Sports Protection Act (PASPA), a federal statute passed in 1992 which halted the spread of state-sponsored sports gambling beyond the four states (Nevada, Delaware, Oregon and Wyoming) which already possessed legal variations of it. Governor Christie, in an effort to both bring in needed revenue while making a stand for States’ rights, shunned PASPA, a law which benefits only the leagues who initiated its passing. Oddly, the federal government hasn’t chosen to enforce PASPA—the sports leagues do the dirty work.

This is not the first time this issue has come up. In fact in 1993, New Jersey previously attempted to circumvent PASPA. That initial measure failed. Delaware also tested the limits of PASPA in 2002 and again in 2009. Each time, the leagues were there to stop the state from expanding its sports gambling beyond what was already allowed (single game wagering is not available in Delaware, only parlay cards are).

Despite the sweetheart relationship the leagues enjoy with the federal government which has given them each a level of anti-trust status, making them monopolies in all but name, not every attempt made to limit sports gambling has been successful. Between 2000 and 2002, the leagues, in concert with the NCAA, sought to pass a federal bill which would have made it illegal to wager on any college sports whatsoever (including in Las Vegas where it was legal). In this instance, Congress did not heed the leagues’ wishes.

However in 2006, the leagues were instrumental in getting a different federal law passed—the Unlawful Internet Gambling Enforcement Act (UIGEA). This “prohibits the acceptance of credit, electronic funds, checks, or the proceeds of other financial transactions by persons involved in the business of betting or wagering in connection with unlawful internet gambling.” When a key measure in this legislation was threatened a year later, the leagues again were there to ensure the UIGEA remained intact.

But why do the NCAA, NFL, et al. have such a vengeance against people gambling upon their sports? The notion appears counterintuitive, given the obvious interest a betting fan would possess.

Setting aside the NCAA’s claims which exist on an entirely separate plain than the major leagues’ (its main argument revolves around the “amateur” nature of college athletics…which are about as “amateur”—and clean—as the Olympics are today), there are three main points of contention which are repeated in the anti-sports gambling argument.

#1 – Legalizing sports wagering in New Jersey would not eliminate illegal gambling.

On this first point, the leagues are absolutely correct. If New Jersey wins its right to offer sports wagering, illegal bookies would continue to exist. Nevada, the only state which offers full-line sports wagering, only accounts for 1 percent of all the money bet on sports in the United States. The other 99 percent is conducted illegally.