Why the Supreme Court changed America’s betting rules

By M.J.

LITTLE connects radioactive waste with LeBron James, Serena Williams and other contemporary sporting heroes. But the link is there and it could have a big impact on how millions of Americans watch their favourite sports. It was highlighted by the Supreme Court, which ruled on May 14th that legislation preventing most Americans from gambling on sport was unconstitutional. When explaining its decision the court referred to a ruling it gave in 1992 to strike down a federal proposal that would force states to dispose within their own borders of the radioactive waste that they generated. The court decided that the same arguments applied to the outlawing of sports betting and that states should not be forced to implement federal regulations. With the ban lifted, how readily will states embrace gambling and what does it mean for sport itself?

As the court’s opinion makes clear, America has always had conflicting views of gambling on sport. To some, it offers vital revenue for state governments, deepens the fans' connections with their teams and, above all else, is fun. For others, it is a highly addictive, potentially ruinous pastime that threatens sporting integrity by encouraging corruption. For much of the professional sports era, the moralists have won out and opportunities to gamble legally have been tightly controlled. Since 1992 the Professional Amateur and Sports Protection Act (PASPA) has prevented states from legalising sports betting, with a carve-out for Nevada, where such gambling was already allowed in casinos, and minor exemptions for three other states. Consequently, American sport looks and feels quite different from its equivalent in Europe, where gambling firms have their logos emblazoned on team jerseys, stadiums are lined with betting terminals and bookmakers even sponsor the leagues.

America, with professional competitions in (American) football, basketball, baseball, ice hockey and soccer, offers an enormous opportunity for bookmakers. But dramatic changes are unlikely to happen quickly. Despite the huge potential implied by the court’s ruling—estimates of the value of illegal gambling in America vary from $50bn to $150bn a year—industry professionals have reacted cautiously. Major League Baseball (MLB) issued a statement in which it referred to the need for “proper protections”, adding that “integrity” was its top priority. The National Football League referred to the “potential harms” to public confidence in its matches and asked Congress for legislation to govern betting. Their worries have merit. Bringing gambling into the mainstream would permit greater surveillance, but legalisation would also make the betting market many times larger, with bigger potential rewards for fixers and corrupt players alike. Other sports offer cautionary tales: both cricket and tennis have suffered corruption scandals in recent years, driven by the expansion of betting markets to allow gambling on individual elements of a match, such as a single point. Such betting lowers the risk for both the fixer and a willing player; the corrupt action is fleeting and much harder to detect. Americans also remember their history: the Supreme Court made reference to baseball’s World Series of 1919, which was thrown by the Chicago White Sox, and an infamous college basketball scandal from the 1950s.

But there are other voices clamouring for change. Adam Silver, commissioner of the National Basketball Association, has been a rare advocate of legal gambling. He believes it will increase fans’ engagement—and that the leagues could take a cut from revenue generated by bets on their events. Others are keen to weaken black-market bookies. What seems clear is that New Jersey will be at the forefront. The state government brought the case to the Supreme Court and betting is likely to begin at its Monmouth Park horse-racing track within weeks. A British bookmaker, William Hill, has spent years building facilities there to offer gambling—itself a big bet that the American ban would be struck down. Other states will follow, and there will be intense interest from European gambling firms. Perhaps most significantly, American sports are ideally suited to betting. Baseball and basketball, in particular, offer hundreds, if not thousands, of possible bets, from the outcome of the next pitch to the identity of the next player to sink a three-pointer. Meanwhile, there are already apps that could allow fans to place bets on their phones. Thanks to the court’s decision—and the 1992 ruling it cited—the experience of watching sport in America is likely to change forever.