For as long as sports have been around, Americans have loved to bet on them. It hasn’t been until recently, though, that they’ve been able to do it legally.
This week marks an important date in the history of legal gaming with the three-year anniversary of the Supreme Court overturning the Professional and Amateur Sports Protection Act (PASPA), paving the way for legal sports betting’s expansion across the country.
Since that day in 2018, millions Americans have left behind the predatory, illegal offshore market and flocked to the safety of regulated sports betting markets in 27 states plus Washington, D.C. American Gaming Association (AGA) research found that more than $51 billion has been legally bet on sports nationwide over the last three years — an impressive feat.
Even during a time where everything else in the country shut down due to COVID-19, the sports betting market continued to boom.
Before PASPA was overturned, the market looked much different — and much more dangerous. Bettors couldn’t be sure whether their wagering was fair, whether they’d receive their winnings or know where to turn to if they had a gambling problem.
With the regulated market comes a commitment to fair play and payouts — and customers who can’t play responsibly always have access to whatever kind of help they need.
Not only are consumers at risk in the illegal market, states derive no tax revenue while incurring additional expense of policing illicit activity within their borders. States and tribal sovereign nations with legal sports betting are investing valuable tax dollars in their communities. To date, AGA research has found more than $500 million has been generated in state tax revenue, providing a revenue source to enhance everything from fire departments to schools and libraries.
There’s still work to be done to keep sports betting on a successful path.
First, it’s critical we leave the regulating up to states and tribal sovereign nations — not the federal government — since both deeply understand the unique factors and needs of their markets.
As more states begin to expand sports betting, our commitment to responsible gaming must grow, too. That’s why the gaming industry has proactively created a responsible gaming initiative to educate bettors on the importance of wagering responsibly. While the campaign already has the support of major sports leagues like NASCAR, the NHL, PGA TOUR, UFC, as well as teams and sports betting operators like FanDuel, this initiative must continue expanding and adapting to meet the needs of the growing sports betting landscape and ensure consumers who want to bet on sports have the resources to do so the right way.
At the federal level, we also must recognize that just because millions of Americans have shifted their wagering to the legal market, it doesn’t mean everyone has made the switch. Many people still make bets with their corner bookie or an offshore betting site. Prior to the expansion of legal sports betting, Americans wagered an estimated $150 billion in the underground market every year. In 2020, nearly $21 billion was bet through legal channels, which indicates there is still much work to close the gap.
While continued legalization is a big part of the solution, the right policy conditions are also essential for legal sports books to effectively supplant the illegal market. That’s exactly why abrasive and outdated federal policies like the federal excise tax need to change to ensure tax policy established in the 1950s to penalize illegal sports books doesn’t continue to give them a leg up in today’s marketplace.
Other federal laws — like the Wire Act — designed specifically to prosecute organized crime shouldn’t create risk or uncertainty around legal sports betting’s operations’ ability to serve their customers. These only further empowers offshore bookmakers who can easily reach Americans in any state.
Federal law enforcement must also prioritize and provide additional resources to prosecute illegal bookmakers, while coordinating with state law enforcement and gaming regulators to ensure the sports betting market is safe for all consumers.
Three years after the PASPA decision, it’s clear there is an appetite among sports fans to wager legally on the games they love to watch. While legal sports betting’s success so far is worth celebrating, there’s more we must do to ensure we’re keeping it on the right track.
Bill Miller currently serves as the President and CEO of the American Gaming Association, the premier national trade group representing the U.S. casino industry.