Will we see more Brandon Johnsons on college campuses, now that the Supreme Court in mid-May knocked down the 1992 federal ban on legal sports betting that had given Nevada a near monopoly on that dubious business?
First, who is Brandon Johnson? He is the all-time leading scorer in University of San Diego basketball history. Alas, he was sentenced to federal prison for being an accomplice in game fixing. The Federal Bureau of Investigation tapped revealing phone calls between Johnson and T.J. Brown, a former USD assistant coach who went to prison for being the middleman between the bettors and players.
By knocking down the federal ban on sports gambling, the Supreme Court basically left the decision to states. In California, a move would require a constitutional amendment, and one was submitted last year in anticipation of the high court’s decision. One assemblyman wants a vote on the topic in November, but others think the matter won’t be settled for a couple of years. Indian casinos may well get the business, but card rooms and live horse-racing tracks might want in on the action.
It’s difficult, then, to know the social effects since all the states (not including Utah) are likely to jump at the chance. Eilers & Krejcik Gaming, a research firm, estimates that if the states go all-out (unfettered restriction) into sports gambling, annual revenues could hit $16 billion. If the betting is restricted, the total would be about $7.4 billion. The number of sports gamblers could hit 44 million under the gung-ho scenario. Therefore, tax collectors are drooling.
And now to Brandon Johnson and his ilk. Even if the Eilers & Krejcik forecasts are optimistic, there is general agreement that the total amount of sports gambling will go up. This “may give rise to more match fixing in the aggregate, even if the proportion of match fixing incidents decreases,” says Jimmy McEntee of globalanticorruptionblog.com. Now, much of the sports gambling is through bookies and over the internet. “By taking gambling out of the black market and into the light, regulators may be better able to monitor and track gambling activity, and to identify irregularities that suggest possible corruption.” After all, there is an incentive for legal sports betting to be free of corruption. A sports bookmaker can be hurt financially by game fixing.
Who are the winners from the court’s decision? New Jersey, the plaintiff in the suit, is ready to go. So are a few other states. The big winners will be professional sports teams, most of whom were publicly opposed to gambling but secretly hoping to see it legalized. The National Football League, in particular, is the biggest hypocrite of all. It was founded by gamblers and gangsters in 1920, and high rollers dominated ownership until a few years ago. Mark Cuban, billionaire owner of the Dallas Mavericks of the National Basketball Association, claims the value of pro sports teams could double overnight. (Sorry, San Diego haters of the Los Angeles Chargers: the Spanos family, worth $2.4 billion as of May of this year, according to Forbes, would be worth almost $5 billion if Cuban is right.) Even though Cuban is known for hyperbole, there is no question that the value of pro sports teams will soar. Pro football, for example, despite its antigambling piety, has a lucrative symbiotic relationship with gambling. It’s logical: 84 percent of adults say they are more likely to watch a game if they have money riding on it. The crypto-gambling fantasy football darlings, DraftKings and FanDuel, dance cheek-to-cheek with the league.
ESPN notes that other winners from the court’s decision are companies that provide sports data (critical to setting bet spreads and the like), Twitter, app developers, makers of mobile devices, racetracks with other forms of gambling, and the aforementioned DraftKings and FanDuel. The New York Times points out that “the appetite for sports consumption both online and on traditional television will surely rise.” Now, the sports TV industry is struggling, as competition from streaming services, video games, social networks, and mobile phones takes bite.
There will be some losers. Illegal bookies will no doubt lose business, but they won’t fail, because they offer credit to some customers and don’t report betting payoffs to tax authorities. Online sports books working through offshore havens may get hit, although the secrecy they offer is enticing to many. ESPN suggests that savvy bettors may suffer, because the cost of regulation will be high, and those costs may be recovered by lowering payouts.
The National Collegiate Athletic Association (NCAA) has always opposed legal gambling. If game throwing increases, as is likely, the NCAA’s monitoring duties may expand. Student athletes, who aren’t paid (supposedly) may demand some kind of emoluments, as they did at Northwestern University not long ago.
Legalized sports gambling will increase hanky-panky. You can expect to see fake news. There will almost certainly be false reports of player injuries on social media. Phony scouts will offer their services to gamblers. Crooks will try to use electronic speed to place a bet on an outcome that has already happened. (If that occurs, pro sports will return to mobster-manipulated days. Arthur “Mickey” McBride was the first owner of the Cleveland Browns. He was head of the Continental Racing Wire. The goal was to permit some sharpies to bet on a horse race that was over.)
Finally, legal sports betting is only around 5 percent of the wagering in Nevada. While casinos throughout the U.S. will want the business, sports gambling is still a small fry, even though Americans illegally plunk $150 billion (probably more) into it every year. Casinos make 4 to 5 percent a year, or slightly more, on sports gambling, according to the University of Nevada Las Vegas Center for Gaming Research. That’s better than they make on blackjack (2 percent from an average player), but less than they make on dollar slot machines (6 percent) and quarter slots (8 percent) on average players.
So should you run out and bet $1000 on San Diego State to beat Southern California in football? Whether you vote the spread or simply which team will win (called “Moneyline,” which is expensive), if you collect on 52.4 percent of your bets, you only break even. Enjoy the game, but sit on your wallet.