Monday, May 14, 2018

Sports betting is legal outside of Vegas!! Well, not immediately, but maybe soon

I got a pleasant surprise from the news wires this morning. Sports betting can become legal throughout all of America! Thanks to a 7-2 decision from SCOTUS today.
Alito and six colleagues agreed, including all the court's conservatives as well as Justice Elena Kagan.

"It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals," Alito said. "A more direct affront to state sovereignty is not easy to imagine."

Justice Stephen Breyer agreed that the provision directing states to maintain sports betting bans should be stricken, but he said the whole federal law should not have been declared unconstitutional.

Ginsburg and Sotomayor went further, saying the the law should stand. "The court wields an ax to cut down (the law) instead of using a scalpel to trim the statute," Ginsburg said. "It does so apparently in the mistaken assumption that private sports-gambling schemes would become lawful in the wake of its decision."
What’s funny is that while I think the 1992 law should have been repealed by Congress and I’m very happy with the outcome, I also think Congress has the right to outlaw certain forms of gambling nationwide if they so choose, just like other activities.

The problem I have with that 1992 law is that is specifically carved out Nevada from enforcement- it should be all or nothing at the federal level (and I favor “nothing”). Not that I’m a lawyer, but if I were ruling on it, the Nevada loophole is what I would have pointed to in order to invalidate the law, and I probably would have taken the Breyer route of “betting’s legal, but mostly because the bill was written wrong.”

Coming soon to the Dells?

Here's a map of who might be looking to open a sports book in the near future.

I don’t see any Wisconsin proposal that was made in this session that even discussed legalizing sports betting here, although Wisconsin AG Brad Schimel apparently signed onto an amicus brief supporting New Jersey’s stance that the law be shot down (wait, I agree with Brad Schimel on something? Strange bedfellows, I guess).

But other Midwestern states have been preparing to make plans to get into the sports betting game. I do see that the Illinois Senate had a committee hearing on it in early April, and that MLB and NBA officials testified that they were OK with legal sports betting (as long as they get a cut, of course).

Indiana also had a sports gambling bill introduced back in January, and used input from MLB and the NBA to “ensure the integrity of its contests.” The Indiana bill had notable details about how the pro sports leagues would get their cut of legal sports betting, as ESPN’s David Purdum wrote at the time.
The leagues also would receive a 1 percent "integrity fee," paid quarterly by operators and based on the amount of money bet on a governing body's events.

For example, if a $100 bet was placed on an NBA game with a licensed Indiana bookmaker, the league would receive $1 from that wager, win or lose. The leagues would not have a cut on the outcome of the wager, only the amount of the bet. That could produce a multimillion dollar windfall for the leagues.

In Nevada, for example, $1.04 billion was bet on baseball in 2016. If Indiana generated the same amount of handle on baseball, Major League Baseball would be in line for approximately $10 million from a 1 percent integrity fee.
Interestingly, Indiana was coming back into a special session this week. But it looks to be limited to five bills mostly dealing with education issues (basically Indiana GOPs are doing ALEC bills “school security” BS that mirrors the sham we passed in Wisconsin).

Also interesting was this comment in January (also noted in the Purdum story) from the head of the American Gaming Association, who said that he thought the pro sports leagues were missing the real benefit from sports betting - driving up interest in the sports themselves.
American Gaming Association president and CEO Geoff Freeman says the leagues' opportunity to profit for legalized sports betting is by increased fan engagement, advertising and data rights -- not a straightforward cut of the action.
In addition, Freeman said the Indiana bill might cause some betting places to struggle to survive due to the extra expenses involved.
"They have an opportunity to make money in a host of different ways," Freeman said. "It's going to take a little bit of work. It's going to take some sophistication, but it's an extraordinary opportunity. Trying to con legislators into giving [the leagues] a direct cut of the amount that bettors wager is a lowest-common-denominator approach and actually undercuts the entire business of sports betting and will insure that we have more people going right back to the illegal market."
Which makes some sense, when you think about it. If 1% of the TOTAL AMOUNT BET is going to the MLB and another 1% to the NBA, then how much is the casino going to be able to keep in profit? The “vig” would likely go up, and might be too high for the typical bettor to want to do it (would you bet $120 to make $100 on a typical point spread vs the regular “$110 to make $100” vig?).

That, or perhaps the vig would be normalized at $110-100 in the hope gamblers would also take advantage of additional entertainment options in and around a sports betting place to make up the difference (like hotels, clubs and bars in Vegas).

According to today’s Indianapolis Star, Indiana won’t be likely to have legal sports betting until at least Fall 2019, if it all. Partly because the next group of lawmakers to figure out if and how to legalize sports betting may not be ones at the state level, but in Congress.
The big question moving forward is how the sports gambling industry will be regulated," said Nathaniel Grow, associate professor of business law and ethics at the Indiana University Kelley School of Business.

"Rather than rely on a hodgepodge of individual state laws, the four major U.S. sports leagues — Major League Baseball, the National Football League, the National Basketball Association and the National Hockey League — will likely seek new legislation in Congress regulating sports betting in a uniform manner across the country. Whether such a nationwide law will be passed or not, remains to be seen.”
So it sounds like I need to contact Mark Pocan and Tammy Baldwin and (yes even) Ron Johnson, and tell them that here is another case where they need to LEGALIZE IT!

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