By Andrew Silver, of Ifrah Law
It is hard to believe that as recently as three years ago—prior to the Supreme Court’s May 2018 decision declaring that the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional—Americans seeking to wager on the NCAA basketball tournament had to choose between either traveling to Nevada or wagering illegally, whether with an offshore provider or local bookie. Remarkably, in the time since 2018, close to half the states, plus the District of Columbia, have enacted legalized sports wagering. Several other states have passed bills and ballot initiatives. Consequently, sports wagering will likely be active in some form or another in over half the states by the end of 2021.
March is a particularly appropriate time of year to think about what has and has not changed in the legal sports betting landscape. This is not only because the NCAA’s annual 68-team tournament is rivaled only by the Super Bowl as the top sports wagering event of the year in the United States, but also because it was the NCAA itself that served as one of the main characters seeking to uphold PASPA. In fact, few may recall that the Supreme Court case that struck down PASPA and opened the floodgate for legalized sports betting was titled Murphy v. National Collegiate Athletic Association.
The Murphy case dated to 2012 legislative efforts by the state of New Jersey to legalize sports wagering at casinos and racetracks in the state when PASPA was still in effect. After New Jersey passed legislation providing for legal sports wagering, the NCAA—together with the NBA, NFL, NHL, and Major League Baseball—filed a lawsuit under PASPA seeking to stop the New Jersey law from taking effect and block sports wagering in New Jersey. After decisions by lower courts siding with the NCAA and pro leagues and subsequent attempted revisions to the law, the lawsuit ultimately found its way to the Supreme Court, where the NCAA and pro leagues still argued as late as 2017 that PASPA was good law and should be upheld.
But a funny thing happened shortly after the Supreme Court ruled against the NCAA and the pro leagues and overturned PASPA in the spring of 2018. Namely, all of the pro leagues—the same ones that sought to maintain PASPA and keep legal sports gambling out of the states mere months beforehand—saw the writing on the wall in the form of the likely rapid legalization of gambling in a number of states and decided to embrace legalized gambling as a potential revenue stream.
Indeed, the NBA, NHL, and MLB have all entered into partnerships with sports betting operators to advertise with titles such as “official gaming partner. And while the NFL has not itself named an official U.S. sports wagering partner (it does have a “casino” partnership in the U.S. with Caesars Entertainment, and it did in 2020 name Betcris its official sports betting partner in Latin America), a number of NFL teams, like teams in the other leagues, have entered into official gaming partnerships of their own. In fact, when fans return to arenas and stadiums as the COVID-19 pandemic hopefully subsides in 2021, they may find themselves greeted by in-stadium sportsbooks, such as the William Hill sportsbook recently opened in Capital One Arena, home of the Washington Capitals and Wizards. The Washington Nationals and BetMGM have partnered for a similar on-site sportsbook, and similar facilities are anticipated in other cities.
But with all of its co-plaintiffs having embraced legal sports wagering in some form or another in the time since the Murphy decision, the NCAA has remained on the sidelines. Although this may be explained in part by the fact that the NCAA governs college sports, which sets it apart from its one-time professional league co-plaintiffs, the NCAA’s lack of movement when it comes to wagering stands in stark contrast to its move toward allowing student-athletes to profit from the use of their name, image, and likeness (NIL). In fact, the NCAA is showing some signs of modernization in the wake of early 2010’s litigation brought by scholar-athletes regarding uncompensated NIL usage, with EA Sports having announced in February that it is in the early stages of developing its first college football video game since 2014. It remains to be seen whether actual college football players will appear in the game, but the fact that a game even is being developed is a sign of apparent progress.
Given that the NCAA has demonstrated a willingness to evolve on the NIL front, its silence on the topic of legal sports wagering is deafening. To be sure, the NCAA’s position is complicated by the fact that it prohibits student-athletes from participating in sports wagering activities of any kind and, additionally, even student-athletes that reside in jurisdictions with legal wagering may not be of legal age to partake. But with the NCAA’s student-athlete prohibition in mind, the NCAA’s own study indicates that wagering is commonplace among student-athletes, with approximately one-quarter of male student-athletes admitting to having placed a wager in the last year.
Following the argument for state legalization and regulation of sports wagering — that legalized wagering helps states both protect consumers and police illegal operators (via stronger regulations and increased tax revenues) — it stands to reason that embracing legal sports wagering could help the NCAA further its own enforcement goals, as well. For example, the NCAA could work with operator partners to ensure that student-athletes do not wager on their platforms.
Beyond enforcement, in an historic moment with athletic department budget shortfalls coupled with rising calls for student-athletes to be compensated, the NCAA could make available much-needed revenue streams to colleges and universities by allowing partnerships with legal sports wagering operators. And of course, coming full circle back to enforcement and student-athlete protection, were student-athlete compensation to one day come to fruition, student-athletes—rendered less financially needy by way of a reliable paycheck—would be less likely to succumb to game-fixing in which bad actors seek to pay them to impact the outcome of a game.
In short, from the outside, it seems that embracing legalized sports wagering could help the NCAA increase revenues and avoid gambling scandals. However, in the meantime, as college basketball fandom reaches its annual March frenzy, the NCAA continues to look on from the cheap seats while its professional counterparts—and former anti-gambling compatriots—now reap the benefits of legal wagering partnerships.