It’s Time to Legalize Sports Betting

Sports Betting

There is a tendency to use euphemisms when talking about gambling. Being in the business for nearly fifty years, I have seen almost everything, but lately some have been trying to say some activities are not gambling when they clearly are. I like to call a spade a spade. I will dissect a couple of myths about gambling below.

Daily Fantasy Sports IS Gambling

DFS Is Gambling

The first myth is Daily Fantasy Sports (DFS) is not gambling. Let me start by saying it is gambling, and in reality there is about as much skill involved as there is in a lottery. When nine things have to line up just right for you to win, it’s no different than a parlay or lottery.

You can study all you want and call it skill if that makes regulators and the major sports leagues feel better, but it is still gambling. And if DFS is going to be legalized, then all sports betting should legal.

I’m going to come right out and say it: The time has come to legalize sports betting.

If skill is going to be the standard by which you legalize an activity, I can confidently state that when sports betting is done properly, it has more skill than DFS. An article from Harvard’s Institute of Politics (IOP) called “Should Sports Gambling Be Legal?” begins with the following lines that capture the essence of the debate:

“Few things are as American as laying down a few dollars on a football game. But oddly enough, sports gambling is illegal in all but four states—Delaware, Montana, Nevada, and Oregon.”

Why is that?

The Professional and Amateur Sports Protection Act

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In 1992 the Professional and Amateur Sports Protection Act (PASPA), also known as the “Bradley Act,” was passed which outlawed sports betting nationwide with a few exceptions for the licensed sports books in Nevada and the sports lotteries conducted in Oregon, Delaware and Montana. Congress provided one year from the act’s effective date of January 1, 1993 for states which operated licensed casino gaming for the previous ten years to pass laws permitting sports wagering.

In the February 2013 the New Yorker ran a piece called “A Call to Action” by James Surowiecki about New Jersey’s efforts to legalize sports betting. He starts the article by stating the obvious: billions of dollars are being waged in states where sports gambling is against the law.

Surowiecki then goes on to detail New Jersey’s battle with the federal government and major professional sports leagues to change the law. The first step was New Jersey voters approving an amendment to the state constitution legalizing sports betting in 2011.

In his article, Surowiecki quotes I. Nelson Rose, an expert on gambling law at Whittier Law School, describing the law as arbitrary. “It’s as if in 1929 Congress had decreed that a dozen states would be allowed to have sound in the their movie theatres and all the other states would only be allowed to show only silent films,” Rose says.

Surowiecki notes that though “all the states except Utah and Hawaii have commercial gambling in some form,” sports betting which involves more skill than a lottery, is restricted to only four states.

A major obstacle to the legalization of sports betting is that the major professional sports leagues state that wagering on sports harms their brands while at the same endorsing daily fantasy sports. It seems they want it both ways, but I believe the tide is turning.

In November 2014 NBA Commissioner Adam Silver wrote a New York Times op-ed called “Legalize and Regulate Sports Betting.” He calls a spade a spade and acknowledges that sports betting is “a thriving underground business that operates free from regulation or oversight.”

We all know what is going on. As Silver states, though “there is no solid data on the volume of illegal sports betting activity in the United States…some estimate that nearly $400 billion is illegally wagered on sports each year.”

Silver continues, “Times have changed since PAPSA was enacted. Gambling has increasingly become a popular and accepted form of entertainment in the United States.”

I agree wholeheartedly.

The time is now to legalize sports betting. And the same arguments can be used to legalize online gambling. With proper regulation and consumer protections, Americans can be free to spend their entertainment dollars as they choose.

In August 2015 the Third Circuit Court of Appeals in Philadelphia denied New Jersey’s bid to legalize sports betting saying it violated the PASPA, which came as no surprise. What did surprise me however was New Jersey’s tenacity.

On February 17 New Jersey appealed the decision of the three-judge panel and argued its case to the full court. They face formidable foes—the professional sports leagues—but I think we will see sports betting legalized throughout the country.

I never thought I’d live to see the day.

Robert Turner is a legendary poker player and casino/billiard marketing expert. Robert is most well-known for creating the game of Omaha poker and introducing it to Nevada in 1982 and to California in 1986. He created Legends of Poker for the Bicycle Casino in 1995. He also helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development. He has served as an executive host at the Bicycle Casino and MGM. He is currently working as a casino consultant.

Robert can be reached at robertturnerpoker@gmail.com for consulting, marketing and coaching. Find Robert on Facebook at http://www.facebook.com/thechipburner and on Twitter @thechipburner. Subscribe to Robert’s blog “Beyond the Numbers” to receive notifications of new posts by email.

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Daily Fantasy Sports: Where Are the Regulators?

DFS2

The daily fantasy sports (DFS) industry was rocked by a scandal last week when it was revealed that Ethan Haskell, DraftKings’ written content manager, had mistakenly leaked player ownership percentages for his site’s Millionaire Maker prior to the start of some of that week’s NFL games. Haskell then went on to win second place and $350,000 in the NFL Sunday Million at rival site FanDuel that same week.

This incident has led to speculation that Haskell’s success may be attributed to his improper use of insider information. Though DraftKings bans employees from playing on their own site, there were no prohibitions from playing on rival sites—until the scandal broke.

As of Monday, October 5, both DraftKings and rival FanDuel released a joint statement which says in part, “We are temporarily restricting employees from participating in DFS contests as an interim measure while we work with the fantasy industry to develop and implement a more formal policy.” The key words here are “fantasy industry,” which points to the glaring fact that there is no outside oversight of this fledgling industry.

Even before this story broke, many were asking, “Where are the regulators?”

Fantasy sports benefitted from a special carve-out in the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which essentially sounded the death knell for online poker. Unlike online poker, fantasy sports holds a special status as the UIGEA classifies it as a game of skill stating, “All winning outcomes reflect the relative knowledge and skill of the participants.”

Launched only in 2012 during Major League Baseball’s opening day, DraftKings seems omnipresent now due to the fact that you can’t miss being bombarded by ads every time you turn on your television. The massive marketing budget is funded by the money flowing to the site from investors and players alike.

According to an article on Fortune.com called “Fantasy Sports Site DraftKings Takes Bets from More Big Name Investors” dated July 27, 2015, DraftKings announced a new round of funding worth $300 million lead by FOX Sports and the Kraft Group, owners of the New England Patriots. This round also included investment from the National Hockey League (NHL) and Major League Soccer (MLS) as well as the Madison Square Garden Company. Major League Baseball (MLB) also increased their stake in the company after investing an undisclosed amount in April 2013, becoming the first US professional sports organization to invest in DFS.

In addition to the funding, DraftKings has also benefitted from valuable partnering agreements. In April, DraftKings and Major League Baseball announced a multi-year deal making DraftKings the league’s “Official Daily Fantasy Game.” The agreement allowed individual teams to offer in-stadium fantasy-related experiences. And in July, DraftKings entered into a three-year advertising deal with ESPN Inc. valued at $250 million.

DraftKings seemed to be on top of the world claiming to have over 1 million registered players, the same position online poker held in 2006 at the peak of the poker boom. And in one fell swoop, the government seized the domain names of the three biggest names in online poker on April 15, 2011, the day dubbed “Black Friday,” and the poker industry has never been the same.

As I write this article, “a federal grand jury focused on DFS has been convened in Florida,” according to legalsportsreport.com. The US Attorney’s office in Tampa, Florida, is investigating whether DFS operators are acting in violation of the Illegal Gambling Business Act (IGBA). And the New York State Attorney General Eric Schneiderman has sent a letter to both DraftKings and FanDuel requesting the names of employees who had access to data that could have been used gain a personal advantage. The parallels to “Black Friday” are eerily similar.

This story is evolving with new developments seemingly every day. I have no idea how it’s going to end, but I do know one thing: It’s time for the gaming regulators finally to step up and regulate this new industry.

Regulators have a duty of care to protect the industry and public alike. It seems in this case they were asleep at the wheel. DFS is hindered by a lack of regulation and transparency. Players deserve a fair game. Like anything else in life, without trust, you have nothing.

Robert Turner is a legendary poker player and casino/billiard marketing expert. Robert is most well-known for creating the game of Omaha poker and introducing it to Nevada in 1982 and to California in 1986. He created Legends of Poker for the Bicycle Casino in 1995. He also helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development. He has served as an executive host at the Bicycle Casino and MGM. He is currently working as a casino consultant.

Robert can be reached at robertturnerpoker@gmail.com for consulting, marketing and coaching. Find Robert on Facebook at https://www.facebook.com/thechipburner and on Twitter @thechipburner. Subscribe to receive Robert’s articles as soon as they are published.