At a conference in Washington D.C. on Thursday, the owner of the Washington Capitals and Wizards made some frank remarks signaling a major tide turn in the United States with respect to sports betting. If we turn to another sport, football, Ted Leonsis made it sound as if proponents of legalized sports betting are knotted 17-17 midway through the fourth quarter — and just forced a turnover deep in the opponent’s territory.
The conference, “The Future of Sports Gambling in the U.S.,” brought together lawmakers, sports lawyers, scholars and representatives for professional sports leagues. They all offered insights about the future of sports betting in the U.S. from their respective vantages.
Referring to the estimated $150 to $400 billion in sports bets made illegally in the U.S. every year, Leonsis said the culture of sports betting “Is in the underground and we must now bright it into the light. This is not a matter of timing.” He continued: “This is not a matter of when this will happen. There is an inevitability here that we will move forward with gambling being part of the overall sports landscape.”
Wizards and Capitals Owner Ted Leonsis Says Sports Betting in U.S. Is Inevitable as Momentum Builds for Sports Betting Legalization Ahead of Supreme Court Case
A 1992 federal law known as PASPA (The Professional and Amateur Sports Protection Act), in effect, rendered sports betting illegal in the U.S. outside of Nevada with limited exceptions for Delaware, Montana and Oregon. With substantial expenditures on lawyers’ fees, New Jersey has been battling the pro sports leagues, including the NBA and NHL, for nearly a decade to legalize sports wagering. The legal saga has reached the two-minute warning with oral arguments in the case, Christie v NCAA, set for December 4 in the Supreme Court of the United States. The nine Supreme Court justices will decide on the constitutionality of PASPA with a decision expected in the spring of 2018, possibly earlier.
“The Future of Sports Gambling in the U.S.” was co-hosted by Switzerland-headquartered Sportradar, a global leader in sports betting and integrity services, as well as Revolution, a D.C.-based venture capital firm that Leonsis founded in 2005.
Leonsis is an investor in Sportradar and a member of its board. In 2015, he partnered with Michael Jordan and Mark Cuban, who invested $44 million in the company. Since launching its U.S. branch in 2013, the company has secured partnerships with the NBA, NHL and other leagues. Yes, the same leagues fighting for PASPA and against New Jersey. (More on that here and next week.)
“Like Wall Street, sports is all about real-time data,” Leonsis said in 2015. “Tens of millions of people can’t get enough real-time information about players and teams and leagues.”
Now that legal, regulated sports betting in the U.S. is looking like an “inevitability,” per Leonsis, all of that data will become extremely valuable to bookmakers, the leagues, and of course, Sportradar. But Leonsis’ investment in sports betting does not delegitimize his estimation of the legal and legislative landscape. It makes him smart.
Sportradar disseminated significant quotes and notes from conference speakers. Here’s a sample:
From New Jersey Congressman Frank Pallone, Jr. (NJ-6):
- “Our legislation – the GAME Act – would allow states to legalize sports betting and online gambling in order to regulate the US market. This multi-billion dollar industry must be brought out of the shadows.”
- Pallone has spoken with stakeholders (e.g., the leagues) regarding the draft legislation and has said that the leagues have told him privately that they are in favor of legalizing sports betting.
From Dan Spillane, Senior Vice President and Assistant General Counsel for the NBA:
- “A federal legislation will help us protect the integrity of the game.”
- “We need to use every system we can to help protect the integrity of the game.”
- “We should see catching match fixers as a success rather than a catastrophe.”
- “We prefer a federal framework for consistency reasons.”
From Kevin Braig, Esq., of Shumaker, Loop & Kendrick LLP:
- Braig noted the leagues have the option, not the obligation, to enforce PASPA. This is one of the biggest peculiarities of the law, and possibly a constitutional violation by virtue of the “private nondelegation doctrine,” which basically provides that “Congress cannot delegate regulatory authority to a private entity,” per Dr. Ryan Rodenberg in his amicus brief in Christie v NCAA.
- Braig: “There is no doubt in my mind that the odds of New Jersey winning have shortened significantly from being a long shot before the SCOTUS decided to take the case.”
From Daniel Wallach, Esq. of Becker & Poliakoff, P.A., who specializes in sports law and penned “How To Legalize Sports Betting” for Deadspin:
- “I really believe New Jersey is the favorite in this case and that we will have sports betting for the next NFL season.”
- He also outlined three possible outcomes in the case:
- Declare PASPA partially unconstitutional. New Jersey would prefer this option because they would have a lot of control. This would initiate Congress in creating a federal framework to avoid chaos. Most likely.
- Court will strike PASPA as fully unconstitutional because of the 10th Amendment.
- Leaves PASPA as- is.
From Jason Robins, CEO of DraftKings (which might become a sportsbook…):
- “In a regulated industry through mobile and online you can track transactions. Through tech we can make sure the fans have a positive experience gambling as well as police it.”
- He added that it is common sense that a regulated market will protect the integrity of the games compared to status quo.
Finally, from Leonsis:
- “What are we afraid of? A regulated, transparent system will be needed to engage consumers in an area where they are already spending money. We are not naïve that these are delicate situation and that’s where there is a need for smart monitoring of these systems. My belief is that if we have a good partnership we can create more jobs and improve the economy.”
It was a busy week for sports betting conferences: earlier in the week, SportsHandle attended the Sports Betting USA conference in New York City where others speakers (and some of the same individuals) addressed other legalities, opportunities and hurdles with respect to sports betting. Here’s Part I and Part II of our takeaways.