Thank you. I’m proud to be here today representing the American Gaming Association.
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.
Companies like Genius Sports are harnessing the power of data analytics to track patterns in wagering. They provide leagues, law enforcement and betting companies with powerful insights about potentially illegal activity. And ensure that the integrity of sporting events is protected.
The technologies that Genius Sports and others are developing also impact the broader discussion about the future of sports betting in the United States.
Since 1992, federal law has largely prohibited sports wagering outside Nevada. But the 25-year old ban has failed to achieve its objectives. Instead of curbing sports betting, it’s just driven it underground…with trillions of dollars estimated to be wagered illegally over the life of the law.
The two biggest sporting events of 2016 have been Super Bowl 50 and March Madness. AGA estimates that Americans bet nearly $14 billion on those events. About 97% of it was bet illegally.
Estimates on the total scope of the illegal gambling market are notoriously tough to come by. I’ve seen figures ranging from $100 billion to $400 billion. But even at the low end, the illegal sports betting market in the U.S. is roughly five times bigger than the entire legal sports betting market in the U.K.
So — why should anyone on Capitol Hill care about this?
First, illegal sports betting finances a range of criminal activities.
Illegal sports betting is not a victimless crime. Billions of dollars flow through illegal bookies, organized crime syndicates and a web of hundreds of offshore gambling sites.
These funds underwrite everything from money laundering and drug dealing to human trafficking and extortion.
As Professor Jay Albanese — who is here today — has documented, these are not short-term, fly-by-night operations. Many illegal sports gambling businesses have been operating for a decade or more and employ a few dozen people. In 2014 alone, 80 operations in 23 states were convicted of running illegal gambling rings.
Second, illegal sports gambling is a parasite on local communities.
Legal gaming in the United States generates some $38 billion in tax revenues and supports $1.7 million jobs across America. These taxes support critical public services — including education, health care and law enforcement.
Illegal gambling does not generate a penny for our communities. Nothing for local schools. Nothing for local hospitals or parks. Nothing for responsible gaming programs.
And it’s even worse than that… Not only does illegal gambling generate zero tax revenues, it drains limited law enforcement resources.
Third, illegal sports betting offers no protections for the integrity of games.
Anyone who is concerned about sports betting’s impact on sports integrity should consider this: In the illegal gambling market, there are no safeguards — let alone concerns — for the integrity of sports.
Concerns about sports’ integrity are not uniquely American. Sports leagues around the world are just as concerned as we are in ensuring that games are fair and competitive.
You’ll hear from several league leaders today. They’ll explain how using 21st century tools to monitor betting and identify suspicious betting patterns helps promote the integrity of games and protect the sports we all love.
So where do we go from here? In my view, progress starts by:
· Acknowledging the shortcomings of today’s law and the massive black market in illegal sports betting it’s feeding.
· By understanding that the vast, overwhelming majority of sports betting is taking place beyond the reach of law enforcement … with no regulatory oversight … no protections for consumers … no tax revenues for local communities … and no safeguards for the integrity of games.
· And finally, by asking ourselves whether there is a more effective approach.
Many leaders in professional sports are already there.
Major League Baseball Commission Rob Manfred has said it’s time to take a fresh look at sports betting laws. I agree.
But don’t just take my word for it.
After Super Bowl 50, President Obama went on the Stephen Colbert show and said:
“After every Super Bowl, I call the winning team to congratulate them. And sometimes I call the losing team, especially if I bet on them.”
When Colbert reminded him that sports betting is illegal, President Obama said, “I’m the president. I hereby pardon myself.”
When the nation’s law becomes a punchline for the President of the United States, it’s time for a fresh look.
The AGA is committed to partnering with law enforcement officials, professional sports leagues, professional athletes, sports monitoring companies, regulators and policy makers to start this discussion.
That discussion begins by understanding the nature of the illegal sports betting market in the United States and public attitudes toward the current federal prohibition on sports betting.
To help us dig into this issue, we’ve brought together three excellent speakers who are experts on public opinion, law enforcement and criminal sports betting enterprises.
I’ll now turn things over to David Larkin, a highly regarded expert on international sports law, governance, media and anti-corruption issues. David has dealt with a wide range of contentious matters for the International Olympic Committee, FIFA and other sports organizations — and we’re pleased to have him moderate our opening panel.
Thank you, everyone, and enjoy the program.
