The American Gaming Association and its allies in the law enforcement community took to Capitol Hill Wednesday morning to shine light on the estimated $100 billion market for illegal sports betting in the U.S. and the existential threats such activities pose to the integrity of amateur and professional sports.
In front of a high-profile audience of congressional staff, government officials, sports league representatives and other industry stakeholders, AGA CEO Geoff Freeman and a cadre of experts from academia, law enforcement and the European gaming industry highlighted the surging incidence of unregulated sports wagering in the United States and urged policymakers to take a fresh look at the framework that governs the activity.
“As multiple sports league commissioners have recommended, it’s time for a fresh look at our approach to sports betting and the unintended consequences of our federal prohibition,” Freeman said in his opening remarks.
Why is drawing attention to this under-the-table market so important? Recent scandals, such as the match fixing ring in tennis uncovered earlier this year in the United Kingdom and the ongoing implosion of FIFA, show that such imprudent behavior can lead to severe criminal penalties and incalculable reputational harm to sports leagues, athletes and bookmakers.
“Protecting the integrity of games is vital to sports leagues, professional athletes and fans everywhere. As sports betting explodes in popularity, this mission is growing even more urgent,” Freeman extolled.
The recurring theme during the opening panel was how laws like the Professional and Amateur Sports Protection Act of 1992 and the Unlawful Internet Gambling Enforcement Act of 2006 – though well-intentioned – have largely served to drive sports betting activity underground. In the process, they inadvertently expose consumers, athletes and sports leagues to enormous risks.
“Are PASPA and UIGEA successful? No, they aren’t, and it’s clear,” affirmed Dr. Jay Albanese, a criminologist at Virginia Commonwealth University who studies illegal gambling. “All those laws have done is to drive behavior underground.”
J.B. Van Hollen, a former Wisconsin attorney general, explained how the current U.S. sports betting framework has not only failed to achieve its intended objective of protecting consumers and squelching illegal operators, it has effectively turning tens of millions of Americans into petty criminals.
“Probably most people in this room have participated in illegal gambling” activities like betting on the Super Bowl, participating in a March Madness pool or holding a basement poker game, he said. “Nobody is going to argue that local pools are harming society,” he continued, contending, rather, that the emphasis must be on crowding out shady offshore entities that rip off consumers and engage in criminal activity.
Van Hollen distinguished that proposals to legalize and regulate sports betting are inherently different from efforts to legitimize other criminal activities, like illegal drug use, because the negative consequences of those behaviors are much more problematic and far-reaching than those of sports betting.
“By keeping sports betting illegal, who are we necessarily protecting?” he said. “The use of cocaine and heroin is without a doubt a problem for society.”
A second panel consisting of experts from the European gaming sphere offered their insights into how an effective and transparent framework for liberalized and regulated sports betting in the United Kingdom and Spain has served to not only protect consumers and commercial enterprises from malicious actors but also help ensure sporting integrity across the board.
The panelists explained how new innovations in the realm of technology and big data have been used to create more transparent wagering and licensing frameworks that allow law enforcement and regulators to more closely monitor how is much being wagered and by whom.
To achieve this end, Rick Parry, chair of the United Kingdom Sports Integrity Commission and former chief executive of Liverpool FC, emphasized that the private sector and government must abandon any presuppositions of contention in favor of a more collaborative mindset.
“In the early days we were told that sports and regulators don’t mix. The reality is that, in the modern world, the partnerships have got to exist between sports and government,” he said.
Gerry Sutcliffe, a former UK Minister of Sport, concurred: “Politicians are told by business ‘don’t regulate,’ but in areas like this it’s definitely needed.”
Mark Locke, chief executive of Genius Sports, a technology company specializing in monitoring and identifying suspicious betting patters, explained that the centralized nature of the major U.S sports leagues – compared to the more dispersed structure of European soccer – offers it a huge head start in creating a potentially world-class regulatory regime.
The big challenge for the U.S., the panelists noted, is that current regime of regulating sports betting at the state level is difficult to reconcile and a national framework is needed to account for wagers that occur across state borders.
The event, which drew roughly 150 attendees, built on the momentum the AGA had built up in previous months in its efforts to draw attention to unregulated wagering in the U.S., particularly with regards to major events such as the Super Bowl and March Madness. The group estimated that in 2016, Americans wagered $4.2 billion and $9.2 billion on these events, respectively – much of it coming in illegal forms.
