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Trump, Christie Square Off Over High-Stakes Gambling

On Monday, the U.S. Supreme Court will begin hearing arguments in Christie v. NCAA, which ironically pits New Jersey Governor Chris Christie and President Donald Trump against each other over the federal ban on sports gambling. Both men have had big interests in gambling—Christie runs a state that wants it, and Trump used to own three casinos there. But now Trump is in the White House, and his lawyers say the ban needs to stay in place.

Known as the Professional and Amateur Sports Protection Act of 1992 (PASPA), the law criminalizes sports gambling throughout the country, except in the four states that were grandfathered in.

As a result, Nevada has essentially held a legal monopoly on sports betting for decades (Delaware, Oregon, and Montana offers it to a very limited degree). So voters in New Jersey decided to give Nevada some competition. With 64 percent of the vote, their state passed [1] a referendum in 2011 to legalize sports betting.

Three years later, Christie signed that bill into law, but Atlantic City’s casinos have never been able to offer such wagering because sports leagues (NCAA, NFL, NBA, MLB, NHL) filed a federal injunction against the state and put legal betting there into a legal limbo.

This has been a long, drawn-out battle in which the state of New Jersey contests that PASPA violates its 10th Amendment [2] right to equal sovereignty, in other words, violating the state’s right to pass its own laws. The U.S. Supreme Court will begin hearing oral arguments on Monday, and a final decision will come at some point next year—June at the latest.

Clearly, there are billions of dollars on the line here, and Atlantic City, a once thriving gambling mecca with deep ties to Trump has much to win or lose in this case.

Market estimates vary widely, but the American Gaming Association came to a moderate conclusion that $150 billion [3] is wagered on sports each year in the United States. However, only $4.5 billion [4] in sports bets were accepted by Nevada’s legal sportsbooks last year, accounting for only three percent of the total estimated market. In other words, roughly 97 percent of sports betting in America takes place on the black market. That’s a lot of money that could be taxed for state coffers, especially in states (many of which already have legalized casino gambling [5]) currently running in the red.

Oxford Economics concluded that legalizing [3] this black market would create as many as 152,000 private sector jobs, along with $26 billion of economic impact, in addition to providing $5.3 billion of tax revenue.

change_me

Pennsylvania and Connecticut have already passed bills [6] that would authorize sports betting, pending the outcome of this case. Nine other states have introduced legislation to do the same. And there are bound to be several more to come depending upon the decision by the U.S. Supreme Court.

Christie, of course, hasn’t always been a federalist crusader when it comes to gambling. He actually argued to uphold PASPA in Flagler v U.S. Attorney [7] when he was a U.S Attorney in 2007. In another twist, Trump opposed PASPA in the 1990’s, when he ran three major Atlantic City casinos. At the time, he said he was pushing for legalized sports betting because it was vital for “keeping taxes low,” for “senior citizens,” and for “putting the bookies out of business.” In fact, he last said [8] in 2015 that he wasn’t opposed to legalizing the age-old activity at all. Now, his U.S. Solicitor General will be arguing in favor of the federal law he once opposed.

The courts have been host to several unsuccessful legal challenges to PASPA, which is a crony capitalist’s dream, as it legally protects one state’s monopoly on a multi-billion dollar industry, and criminalizes everyone else who dares to tread upon it.

The U.S. Department of Justice certainly recognized this inconsistency before PASPA was signed into law more than 20 years ago. In fact, the DOJ wrote a letter to Joe Biden, who was then serving as the Senate Judiciary Committee chairman. The letter warned that PASPA may violate [9] the 10th Amendment. Regardless, the committee approved of the bill and it easily passed Congress in 1992.

Much like the War on Drugs, the prohibition on sports gambling ban has been an abysmal failure. This black market is flaunted in broad daylight. The newspapers print the injury reports/betting odds, and the sports commentators openly discuss the point spreads “for entertainment purposes.”

No one knows the exact amount, but organized crime is no doubt raking in these underground profits. Notwithstanding, the sports leagues have been on the front lines of the legalization opposition, arguing that it remain criminalized in order to maintain the “integrity of the game,” i.e. preventing players from fixing games.

It’s an assertion that defies logic in every possible manner. Suffice it to say, a fully legalized and regulated sports gambling industry would drastically improve transparency, thus alerting authorities to more instances of game fixing. In fact, all of the major sports leagues already maintain contacts with Las Vegas casinos to warn them of suspicious betting patterns indicative of potential game fixing. However, Las Vegas only represents a small fraction of the betting market.

Remarkably, some of these points, among many others, were made by the NBA commissioner, Adam Silver, in his 2014 op-ed [10] for The New York Times, “Legalize and Regulate Sports Betting.” He pointed out several of the flaws of the current ban on sports gambling and advocated for a change.

Maybe that’s why, despite its earlier support of PASPA, the NBA recently announced [11] it would begin lobbying Congress for federal regulation of sports gambling.

Then again, sports leagues have always been able to play both sides, to their own benefit. On one hand, anti-gambling rhetoric has been a win-win situation because it appeases traditional values conservatives and gives the leagues the perceived moral high ground. Meanwhile, the federal ban hasn’t reduced the demand for betting on sports, thus not harming profitability.  

Furthermore, the leagues have always maintained an anti-gambling facade in the most hypocritical manner. They publicly condemn sports gambling while allowing several team owners to own gambling businesses, accepting advertising from casinos, promoting fantasy sports, partnering with daily fantasy sports companies and state lotteries, among other stunning examples.

But the tide is definitely turning among Americans. A Gallup poll [12] from 1999 found that only 41 percent of Americans supported legalizing sports gambling. However, the most recent economic crash seemingly tipped the scales and there’s been a drastic shift in public opinion. The latest poll [13] by the University of Massachusetts Lowell found that the majority of Americans (55 percent in favor versus 33 percent opposed) support legalization. In fact, this is now an issue with bipartisan support.

All that said, legalized sports gambling is not a panacea. This vice obviously involves a level of harm to society, but it is inherently more harmful hiding in the shadows. The federal ban hasn’t diminished demand. Hence, the reversal of PASPA would be a mammoth improvement from the status quo. It would eliminate one of the most glaring examples of crony capitalism in America today.

Brian Saady is a freelance writer and the author of four books, including Dealing From the Bottom of the Deck: Hypocritical Gambling Laws Enrich Crooked Politicians, a Select-Few Casinos, and the Mob [14]. You can follow him on Twitter @briansaady [15]

13 Comments (Open | Close)

13 Comments To "Trump, Christie Square Off Over High-Stakes Gambling"

#1 Comment By Whine Merchant On December 3, 2017 @ 11:48 pm

Now this does pose a quandary for Conservatives:
– do we encourage “sin” or tax it to lower the deficit?
– do we support Kim-il-Trump & good ole Jeb Sessions to expand the reach of the federal gub’ment, or follow the 10th amendment and just leave this to the states?
– do we help free enterprise [organised crime] or reward red tape bureaucrats and gub’ment meddlers, all for the sake of dollars that should not be taxed?

I wonder what Roy Moore would do? Probably ask what President Obama would do and then just support the opposite.

#2 Comment By Fran Macadam On December 4, 2017 @ 12:00 am

Let’s not let there be an unfair prohibition that gives one state an unfair monopoly on prostitution.

As for whether something is wrong or not? Well we now know that right and wrong can be set in stone by majority vote, court decisions, and lobbying.

What obscure and obsolete fabulist could think that the root of evil is the love of money? Why not at all. As we have learned, ladies and germs, “Greed is Good.

#3 Comment By LouisM On December 4, 2017 @ 2:37 am

We already have politicized sports which has turned people away from the NFL. People don’t want to see Justin Timberlake expose Janet Jacksons breast. People don’t want to see athletes adopting an anti-American stance to the national anthem.

Now go back to baseball history and progress it up to today. After all that has happened, what do you think would happen to a sports league if it were found the games were rigged due to betting? It would further undermine the repute of the sport. The fact is that people learn to love sports and the game in their childhood. What happens to those children when the games they are such fans are no longer children friendly and family friendly and no longer represent the values parents want to instill in their children. Eventually those kids prefer video games and other alternatives than expensive seats in sports arenas for games that are peppered with politics, sensationalism (ie Jacksons breast) or game rigging.

To this I say, continue and follow the NFL and you will find that today’s NFL will not survive until tomorrow.

Trump may have favored betting as a businessman. The goal is to make money but as president Trump is responsible for instilling cultural values for the betterment of our nation. Of course those who hate Trump cant see that he is doing it but those who see his war against the rot in govt, the rot in news and entertainment media, the rot in education, etc…we see that he is doing his best to free the American people from anti-American cultural Marxism….the rot within.

#4 Comment By EliteCommInc. On December 4, 2017 @ 12:40 pm

“Now this does pose a quandary for Conservatives:
– do we encourage “sin” or tax it to lower the deficit?”

uhhh, not a hurdle at all.

Primarily because what is often referred to as sin taxes are not necessarily sin. Those laws were enacted as social more restraints against the excesses and accompanying ills associated with said behaviors.of the behaviors that in and of themselves are not sins at all.

Gambling
Drinking
Smoking

Anyone suggesting that the restraint in the above has been a failure hasn’t measured the consequences of legalized drinking and the associated costs.
Now I am not one to associate drinking with gambling, but its hard to miss the relational dynamics between the two and their devastating consequences.

I doubt most Christians are going to put a big stink about gambling they might, but it is doubtful.

Constitutionally, it is in my view, that it is a no brainer — Constitutionally, the federal government should cease enabling monopolizing on the financial benefits of so called “sin taxes”.

If in fact, it is legal in Nevada, then you have a world of a wall to hurdle denying states right to legalize the same.

#5 Comment By Bob Koelle On December 4, 2017 @ 5:16 pm

“Oxford Economics concluded that legalizing this black market would create as many as 152,000 private sector jobs”
Really? These are net new jobs? Gambling doesn’t produce anything, it simply takes disposable income and redistributes it. So instead of people buying stuff (this includes consuming entertainment) with their money, they gamble it; mostly losing, or the system wouldn’t work.
At least marijuana legalization has the virtue of creating a new consumer product that people actually grow, process and sell, thereby adding some value to the economy. How does gambling create any new net economic activity?

#6 Comment By EliteCommInc. On December 4, 2017 @ 8:33 pm

No one should take my comments to be in support of gambling, smoking or drinking.

But I am hard pressed to comprehend how what is legal for Nevada must be by federal mandate illegal for everyone else.

#7 Comment By EliteCommInc. On December 4, 2017 @ 8:34 pm

I am fine with all of the above being illegal everywhere.

#8 Comment By Buzz Baldrin On December 4, 2017 @ 10:02 pm

This article’s headline should have been
“Adelson, Christie Square Off Over High-Stakes Gambling.”

#9 Comment By polistra On December 5, 2017 @ 3:38 am

Conservatives who worship the Constitution and demonize income tax should be firmly in favor of legalizing and taxing. Tariffs and excise taxes (sin and luxury) are the only sources of Federal revenue in the original document.

#10 Comment By Just Dropping By On December 5, 2017 @ 2:19 pm

@Fran Macadam: Except that, as far as I’m aware, there’s no federal law prohibiting prostitution within states, only federal laws prohibiting interstate travel for purposes of engaging in prostitution. Other states besides Nevada could legalize/decriminalize prostitution tomorrow if they wanted.

#11 Comment By Wizard On December 6, 2017 @ 8:58 am

LouisM – How would legalized sports betting make corruption of sports more likely? As the article pointed out, such gambling is already ubiquitous. Legalization would merely shift it into a more transparent and accountable setting.

Oh, and the idea that politicians are responsible for “instilling cultural values for the betterment of our nation” is pretty nauseating to start with, and beyond ludicrous when applied to Trump. He’s vulgar, habitually dishonest, and has made a career of ethical short cuts. How on earth is such a figure going to lead some sort of moral and cultural revival?

#12 Comment By Paul Schuster On December 7, 2017 @ 11:45 am

@Wizard obviously not LouisM but I can take a stab at why people think that Legalized books would increase corruption. Note I do support legalization but this is something that the parties have to look out for.

The rise of local books outside of Vegas would increase the number of games that have a line. Specifically a number of smaller leagues (minors, regional, scholastic) that traditionally may only be set by local bookmakers would have lines at larger legal books that are in the area. These leagues have a lot less resorces to combat match fixing, and are likely cheaper to influence then large national matches. This point was heavily implied by the 2013 euro soccer fixing crisis where teams in some cases fixed so that there team could make payroll. Though that was mostly international books and not local books.

Now with the increased resources that a legal book would have avalible (insurance, state mandated liquidity etc) actors may be able to place larger bets that at these local books. This would increase the potential profits of match fixing relative to cost.

In addition lines can spread from one book to another, so a local match with a line set by a bookmaker may now also be avalible at books where there was traditionally no one to set the line. This would give people more total options on matches to influence.

In short, there would be legal betting lines on matches that previously didn’t have to deal with major corruption issues. The addition of these lines would allow for an overall absolute increase risk of corruption, but not necessarly a realitive risk.

#13 Comment By EliteCommInc. On December 7, 2017 @ 8:08 pm

“We pick who gets the white marble. Here’s what you’re missing, here’s what you invented. The thing – it’s not a way to ensure the fight is fair. Any two guys fighting for money, no way the fight is fair. What you did is fix the fight without the fighters’ knowledge”

Marty Brown (Ricky Jay)
“Red Belt” Great movie (despite the cop angle being a bit awkward)

Whether or not the games can be fixed (surely they can) is less pertinent to whether or not the federal government can permit a system that allows a one or two state monopoly.