A team of U.S. law enforcement leaders assembled by the American Gaming Association is calling for sweeping changes to an outdated national sports betting framework which has spawned a $150 billion market for underground wagering.
The group, which is known as the AGA’s Illegal Gambling Advisory Board and is comprised of federal and state law enforcement officials, issued a scathing critique of the 1992 Professional and Amateur Sports Protection Act – which effectively banned sports betting in the U.S. outside of Nevada – as ineffectual, facilitating of criminal enterprises and void of any local benefits.
Instead, they called for the prohibition to be repealed and for individual states to be given the freedom and opportunity to decide for themselves whether or not to allow the sports betting in a legal, regulated and transparent manner.
“Instead of curbing illegal betting, the [PASPA] has driven sports betting underground, creating a thriving, $150-$500 billion black market with no consumer protection, no tax benefits for communities and no safeguards for the integrity of sports,” the board concluded in a report released Wednesday.
Emphasizing how the black market for sports wagering continues to grow in spite of PASPA, Ed Davis, a former Boston police commissioner, noted that there are few sensible alternatives left on the table.
“Let’s face it; demand is only rising,” he said. “Consumers would rather do this in a regulated market that provides consumer protections, safeguards the integrity of the game, and provides certainty and transparency. It’s easier to maintain public safety in that type of environment.”
The AGA estimates that Americans bet $4.2 billion on the Super Bowl and $9.2 billion on March Madness in 2016, with the vast majority of that being wagered illegally.
The Illegal Gambling Advisory Board is chaired by Tim Murphy, former Deputy Director of the FBI, and also includes Davis; Bill Young, a former Clark County sheriff; J.B. Van Hollen, former Attorney General for Wisconsin and president of the National Association of Attorneys General; and Jim Dinkins, a former Homeland Security official.
The board’s findings are the culmination of a task force convened by the trade group to examine and raise awareness of the problems posed by rampant illegal sports wagering in the U.S. Its recommendations build largely off of discussions held during the first-ever law enforcement summit, hosted in June, to address the issue.
While illegal sports betting is widely seen as problematic for questions of match-fixing and consumer protection, the group is also drawing attention to the criminal elements that flourish off of such activity.
Davis, who spent a significant chunk of his 34-year career in law enforcement chasing organized crime syndicates and personalities like Whitey Bulger in the Boston area, sought to dispel the notion that illegal sports betting is a victimless crime.
He said that over the course of his career, he observed that “illegal sports betting was the grease that causes [the organized crime] machine to function.”
“They were assured a routine and substantial amount of money coming in every week,” Davis continued, noting that these funds would then be funneled into other, more nefarious activities such as prostitution, human trafficking and drug operations.
He added that the best way to undercut such groups would be to “take the money away and let these criminal organizations literally die on the vine by making this a regulated industry.”
“Most people don’t understand the ties of organized crime to illegal sports betting. We see it every day at the FBI,” said Jay Bartholomew, Unit Chief of the FBI’s Transactional Organized Crime division, in the report.
The report also calls for a thorough examination of how regulatory models employed in the United Kingdom and Nevada, including the use of data-driven technology solutions, could be adapted for the implementation of national or state frameworks in the U.S to protect bettors, deter match-fixing and give law enforcement more tools to monitor, investigate and shut down criminal activity.
The AGA’s campaign to curb illegal gambling launched in April 2015 and was incorporated into a broader initiative to tackle the sports betting problem as questions over the legality of daily fantasy sports competitions began to surface.
The campaign to repeal PASPA and quash the illegal sports betting market has become the signature issue for the AGA this year, and Wednesday’s findings come as the trade group is ramping up support for a Capitol Hill push in 2017 for Congress to repeal the law.
Geoff Freeman, AGA chief executive, praised the board’s efforts and extolled the role of law enforcement groups in the broad-based coalition he is constructing to urge legislators to give the prohibition another look.
“We couldn’t have any better partner than law enforcement,” he said.
But winning such a repeal would be much more than just a public relations victory, as a report earlier this month from Gambling Compliance pinned the potential size of a legal and regulated U.S. sports betting market at roughly $12 billion.
