Five Years After PASPA’s Repeal, How Must Sports Betting Improve?
Professional and Amateur Sports Protection Act (PASPA), otherwise recognized as the Bradley Act, was signed into law by President Bush in 1992 before going into action a year later. The bill prohibited states from presenting legal sports betting. But the U.S. Supreme Court flattened that decision on May 14, 2018, deeming PASPA as an unconstitutional ruling after a long clash between New Jersey and major professional sports leagues.
On the fifth anniversary of this repeal, where does sports betting need to refine itself the most? Below, you’ll find insight from a few industry experts.
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1. Advancing The Legal Betting Market
According to the American Gaming Association, over $200 billion has been wagered at betting sites and retail sportsbooks since PASPA’s repeal in May 2018. In fact, 39.2 million American adults placed a sports wager in the last 12 months alone.
Those figures may indicate an equitable market across operators for novice and seasoned bettors. However, there’s a disagreement in the industry about whether or not that’s true, especially amongst high-stake gamblers who are strapped by betting limits after tallying a considerable net profit.
Additionally, hold percentages have surged, especially surrounding key events like the Super Bowl. Tennessee sports betting is a prime example. The state’s regulators require a 10% revenue hold for mobile sportsbooks. There are conversations, reaching as far as the Volunteer State’s House of Representatives, to cut this constraint and instead place a tax on sports betting handle. But that, in turn, would motivate operators to accept high-hold parlays rather than straight bets.
Jeffrey Benson, Circa Sportsbook’s director of operations in Las Vegas, has helped employ a sportsbook model that detaches bettors from each of the previous handicaps mentioned. He says that for this industry to experience impactful progress, states must begin to showcase a more transparent and consistent user experience. Circa’s regulations, such as how much a user can successfully wager, tend to differ from other books.
“I don’t expect every shop to take $200,000 bets on NFL sides on a Sunday morning (like Circa does), but I expect every single sportsbook that applies for a license and is regulated in the industry to take more than $20. You have a lot of regulators and operators who don’t understand this business for what it’s actually worth. They make it a challenge for the big boys to get into these markets. If people were really interested in bringing in the money back in from unregulated offshore books, they would focus on doing the things necessary to create a competitive environment where all sportsbooks can function.”
2. Prioritizing Responsible Gambling
At the latest SBC Summit North America conference, it was estimated that 95% of the sports wagering “circle” are non-problematic bettors, while the other 5% engage in problem gambling. The latter may seem like a small aggregate, but, in reality, it’s a number larger than the industry wants to see.
Moreover, we’re already seeing states reverse course on their pledge to assist with responsible gambling efforts. The law that permitted sports wagering in DC pledged the first $200,000 in sports betting taxes each fiscal year to help those with problem gambling. Despite collecting $600,000 through the end of fiscal 2022 on Sept. 30, not a single penny has gone to treatment centers. Legal Sports Report reported this news last month.
Iowa spent more than $15 million to help aid problem gamblers in 2022. Louisiana also dished out over $2.5 million set aside for addiction. But each state sets its own rules on where tax dollars go and how much money initiatives get.
“Choose the worst possible thing you can do right now, and that’s what they’re doing (over in DC),” John Holden, an associate professor at Oklahoma State University with a Ph.D. in sports law, told TheLines. “There’s a need to be responsible with a product that for some people is dangerous. From a state perspective, both at a regulator and legislator level, problem gambling has really been a secondary — if not tertiary — thought. … If we are looking for this industry to crash and burn, good going.”
3. Making Improvements Moving Forward
Problem betting hasn’t just been an issue amongst the “ordinary” folk. It’s also surfaced in collegiate athletics — but on a different scale.
Alabama, Iowa, and Iowa State have all been in hot water over the last two weeks because of separate instances of potential suspicious wagering activity. The Iowa Racing and Gaming Commission couldn’t determine any suspicious activity from the players under investigation.
Nevertheless, that wasn’t the case for ex-Crimson Tide coach Brad Bohannon. A tip came in about Bohannon through “Athlete Alert Powered by RealResponse,” sports integrity hotline officially launched on Thursday by U.S. Integrity — an independent Las Vegas-based firm.
It’s designed to aid athletes, coaches, and staff with anonymously reporting suspicious gambling actions to sportsbook regulators, along with law enforcement.
Bohannon was dismissed after unusual wagering activity from Alabama’s matchup against then-No. 1 LSU on April 28 was discovered. After the tip, regulators found that Bohannon was in touch with a bettor who placed a parlay on the LSU-Alabama game, along with a straight moneyline wager. The alert deemed them as “large bets.”
“We actually launched to fulfill an irregularity mandate,” Matthew Holt, the former COO of Cantor Gaming-turned-president of U.S. Integrity, told TheLines. “Over the past year, we simply got over 30 instances (from schools) where their student-athletes had received death threats or really ugly harassment from bettors, ranging from ‘I’m in the parking lot’ to ‘I’m going to kill you and your family.’
“Obviously that product is extremely valuable for people to also report integrity-based activity, like suspicious betting.”
The NCAA possesses a clear-cut sports betting rules. For one, the member-led organization restricts student-athletes from engaging in wagering activities. On top of that, it prohibits them from supplying information to individuals involved in or associated with sports betting-related events. These guidelines include intercollegiate, amateur, and professional athletic competitions.
Considering these restrictions, some states with legalized wagering, such as Illinois and Virginia, don’t offer markets (for the most part) on local collegiate programs. However, many don’t feel that is the right solution to this problem.
“Every single state legislature I speak to, I really urge them to reconsider allowing bettors to wager on the in-state properties,” Holt said. “At the end of the day, if we’re not going to identify inappropriate behavior (to the fullest extent), we’re going to drive them to other states or offshore sportsbooks.”
The latter statement rings true for sports betting as a whole. If state regulators don’t start contemplating a more appealing set of rules for all bettors, offshore sportsbooks will continue to reap the benefits.
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