On November 20, The New York Times published an article on sports betting. In classic Times’ fashion, the article sought to dig into the deepest past and darkest corners of the spread of sports betting. It is, after all, the role of the Times in American journalism. Both the Times and The Wall Street Journal are the giants of the media in this country. When either takes on a subject, it is capable of creating and defining the national narrative on the subject. Each comes with a separate political bias: The Journal represents business and a more conservative and Republican Party point of view, while the Times leans left with the Democratic Party and is more concerned with social and cultural issues. Both are interested in politics. Sports betting falls between business and culture. And in the mind of the Times, sports betting is also very much a social and political issue.
The New York Times article employed inuendo to indict the companies involved in sports betting and lobbying on its behalf. In most cases, the article was short on facts. But it did a good job of detailing the birth of DraftKings and FanDuel and the rise of fantasy sports. Fantasy sports was not in the courtroom when the United States Supreme Court declared federal sports betting laws unconstitutional in 2018. DraftKings and FanDuel did provide a model and helped point out the possibilities of a legal and open industry.
The Times article was not welcomed with open arms by the gaming industry. Several industry people quoted in the article took exception to the way their words were used or, possibly, misused or taken out of context. Most felt that they were not allowed to offer complete explanations or descriptions of events. The article certainly did cherry pick its quotes. But there is no denying the fact that lobbying, lobbyists, and campaign contributions are fundamentals of American politics. It is as true in Washington as it is in state capitals. The fact that lawmakers in Topeka, Kansas, go to lobbyist-sponsored events, accept cigars and whiskey, and listen to biased presentations by the lobbyists is neither new nor earthshattering. It is the American way.
The article makes those cigars part of a dark plot, the equivalent of large sums of cash in brown paper bags intended to corrupt politicians and undercut the democratic process. Cigars may be exactly that, but sports betting is not the villain here. It is part of our economic system. DraftKings and FanDuel, along with Penn National, Caesars, and MGM, may have bought cigars and whiskey for senators as part of their lobbying efforts, as the Times indicates. But they have not tipped the scale toward legalizing sports betting by themselves.
Professor Bill Thompson and John Dombrink could have predicted the outcome of the vote in Kansas. Actually, they did predict it in 1990 in the book The Last Resort: Success and Failure in Campaigns for Casinos. The two authors studied previous campaigns to legalize casinos and lotteries. Thompson and Dombrink drew some conclusions and though many of them no longer hold up after 30 years, some do. For example, they postulated that it was easier to legalize gambling through the state legislature than through a referendum of the people. California and Kansas certainly prove that. In California, DraftKings, FanDuel, and others spent more than $400 million in an attempt to legalize sports wagering; it failed. In Kansas, the vote was tight, but in the end, sports wagering won the day.
Thompson and Dombrink also wrote that the best-financed side usually wins, especially in state legislatures. The Times article quoted Brianne Doura Schawohl, a lobbyist for the National Council on Problem Gambling. She said, “We don’t have the manpower that the industry does. They have gaggles of lobbyists in every state.” That financial muscle still makes a difference in 2022, just as it did in 1990.
One other principle from The Last Resort is relevant today, the popularity of the specific type of gambling. In 1990, casino gambling was not universally accepted, so passing favorable legislation was often an uphill battle. Even when passed, the legislation was often filled with restrictions, special conditions, and unfavorable tax rates.
Gaming is much more accepted, even embraced, today. In 2021, Americans spent $105 billion on lottery tickets and $12 billion betting on horses, and the gross gaming revenue from casinos was $53 billion, with another $39 billion from Indian casinos. Gambling in the United States is ubiquitous. It is popular with both its loyal fans and lawmakers looking for money to fund their budgets. Popularity is the secret to legal sports betting in New York, Illinois, New Jersey, and now Kansas. Watching and betting on sports are two of the most popular activities in American culture.
Nothing in the history of gambling matches the popularity of sports betting and its rapid spread across the land. People love sports and people love betting on sports. And, of course, lawmakers love a new source of tax revenue. Whether the tax rate is too low and the deductions are too high are subjects for future legislative sessions. Contrary to the Times account, however, cigars and whiskey did not create the desire for legalized sports betting. Loyal, enthusiastic, and fanatical gambling sports fans did. And everyone profiting from the betting is simply riding that tide of popularity.
