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25 Years Of PASPA — The Future Of Sports Betting In America

No matter what happens in the U.S. Supreme Court, there appears to be a consensus in the gambling industry that sports betting will expand in the future, and the court’s ruling may set the guidelines on how the expansion unfolds.

“The trend I see, whether it’s internationally or in the states, is to an online model,” said Ryan Rodenberg, an associate professor at Florida State University and one of the nation’s leading scholars on sports betting.

Mobile apps, which already are making a huge impact on sports-betting handle in Nevada, are expected to dominate the market for years to come.

This mobile betting revolution will trigger no less than a fundamental change in gambling policy in the United States, according to David Rebuck, director of the New Jersey Division of Gaming Enforcement.

Online wagering “is going to explode,” and revive a virtually dormant internet gambling industry in the United States, Rebuck predicted earlier this month at the Global Gaming Expo (G2E) in Las Vegas.

Already, there are new signs of life for internet gambling after the Pennsylvania legislature last week passed a sweeping gaming expansion bill which legalizes online gaming, including online sports betting.

If Pennsylvania Governor Tom Wolf signs the bill into law as expected, the Keystone State will join New Jersey, Nevada and Delaware as states which have legalized internet gaming.

U.S. regulators are not prepared to forgive or forget “bad actors,” offshore sports-betting companies that have violated U.S. federal laws for years, according to Rebuck.

“I know who those guys are, and if they want to come in, they’re not getting in,” Rebuck told GamblingCompliance.

“The best example is Bovada,” Rebuck said. “If there is legal sports gambling and Bovada wants to get into New Jersey, they have a heavy burden to ever get licensed and they know it.”

If the Supreme Court rules in favor of New Jersey’s appeal to legalize sports betting in spite of the federal ban set by the Professional and Amateur Sports Protection Act (PASPA) of 1992, Rebuck is prepared to launch an aggressive campaign for the Garden State to enter the online sports-betting market.

The question is whether he will still be around next year to do it given that Rebuck, who was appointed by Republican Governor Chris Christie in 2011, may very well be removed within months if Democrat Phil Murphy is elected New Jersey’s new governor on November 7.

The Supreme Court is scheduled to hear oral arguments in New Jersey’s appeal to legalize and regulate sports betting on December 4. 

Optimism about sports betting’s future has continued to grow since the Supreme Court sent shockwaves throughout the entire gambling industry on June 27 by agreeing to hear New Jersey’s appeal.

Although expansion may seem inevitable, it would be a mistake to downplay the significance of the Supreme Court’s upcoming ruling which can be expected in March or April 2018, according to Rodenberg.

“The Supreme Court’s decision in this case will certainly provide the road map or the blueprint about how sports betting moves forward,” said Ryan Rodenberg, an associate professor of sports law analytics at Florida State University.

If the court issues a narrow decision, allowing only New Jersey to permit betting at tracks and casinos without formal oversight, it is far from certain other states will want to follow a similar path.

On the other hand, if the Supreme Court goes further by overturning PASPA and removing the prohibition on other states entering the sports-betting market, it is also not clear if states will rush to take advantage of the opportunity.

In December, it will be six years since the U.S. Department of Justice found that states could regulate forms of internet gaming other than sports betting, and yet only three — possibly four depending on Pennsylvania — have legalized and regulated online poker or casino games.

Rodenberg said the Supreme Court ruling may offer guidance on whether federal agencies such as the Commodity Futures Trading Commission or the Securities Exchange Commission can regulate sports betting.

“That would avoid this patchwork of different state regs and laws,” he said.

Behnam Dayanim, a gaming attorney with the law firm of Paul Hastings in Washington, D.C., said he thinks sports betting will be regulated state by state like internet gambling.

Whatever rulling is made by the Supreme Court, Dayanim said the wagering prohibition in PASPA will be abolished in the next decade “one way or the other.”

But even if the Supreme Court were to repeal PASPA, another federal statute looms as a potential obstacle to sports-betting expansion, according to Dayanim.

“The interesting question will be whether or not you have mobile and remote sports betting in other states because that is not really a PASPA issue,” Dayanim said.

“It’s a Wire Act issue.”

The Wire Act of 1961 forbids the transmission of sports-betting information across state lines. Some sports-betting executives say it will do little good to repeal PASPA unless the Wire Act also is terminated.

“Right now in Nevada, you have mobile sports betting, and if somebody wanted to challenge it, I think they would have a decent argument that it violates the Wire Act,” Dayanim said.

Veteran Las Vegas bookmaker Vic Salerno agrees that the Wire Act must be addressed for sports wagering to effectively expand.

“There won’t be enough liquidity (or a sufficient number of bettors) unless wagers can be accepted online from other states,” Salerno said.

Rebuck acknowledges the Wire Act is a concern, but suggests there is a solid argument to be made that it does not prevent states from authorizing online or mobile bets.

The Wire Act is intended to prevent illegal sports betting, Rebuck said, not wagering that has been legalized and regulated. That is an important reason why sports wagering on mobile apps is flourishing in Nevada.

One of the biggest changes in sports betting in the future will be the placing of more bets during games rather than before them, according to Michael Roxborough, who was the leading oddsmaker in the nation in the 1990s, and still lives in Las Vegas.

In-play betting has already exploded in recent years in the UK and other European markets, fueled in part by mobile technology.

“People won’t feel rushed like they do now to bet the game before it starts,” Roxborough said. “There will be constant odds and over-and-unders on the game as it continues.”

Gamblers also will be more likely to cash out their bets before games are completed, according to Roxborough.

Technological advances will encourage sportsbooks to make offers to buy bets that have already been made, he said, with cash-out features also recently becoming a mainstay of online betting in the UK.

Another more ominous trend could be spot fixing, in which less important plays during a sporting event are manipulated to win bets without affecting the ultimate outcome of the game.

An illustration of spot fixing would be a baseball pitcher who intentionally throws a wild pitch and a runner advances from first base to second base but does not score. The game’s final result is not altered, but gamblers who bet that the game would include a wild pitch would be rewarded.

“That’s happened around the world, particularly in cricket,” Roxborough said.

Editor’s Note: “The Future Of Sports Betting” is the final story in a series of three articles commemorating the 25th anniversary of the Professional and Amateur Sports Protection Act, which was enacted on October 28, 1992.

For access to “25 Years Of PASPA — Senate Debate On Sports Betting Still Resonates Today,” click here.

For access to “25 Years Of PASPA — The History Of Sports Betting In America” click here.

Americas Premium subscribers can also click here to access GamblingCompliance’s special report, “U.S. Sports Betting: A Sector On The Cusp Of Major Change.”