{"id":633,"date":"2018-06-29T23:30:41","date_gmt":"2018-06-30T03:30:41","guid":{"rendered":"http:\/\/commoncents.blogwyrm.com\/?p=633"},"modified":"2018-06-04T08:59:26","modified_gmt":"2018-06-04T12:59:26","slug":"betting-on-incentives","status":"publish","type":"post","link":"https:\/\/commoncents.blogwyrm.com\/?p=633","title":{"rendered":"Betting on Incentives"},"content":{"rendered":"

The intersection between the legal world and the economic world is often very interesting.\u00a0 The usual topic of debate centering on the deregulation or prohibition of some activity that is not criminal\/immoral, per se, but rather permitted or banned for hosts of different reasons.\u00a0 The tension between the two sides of the argument reveals a great deal about the self-interests roiling in the economy.\u00a0 Who should get to sale coffins<\/a>; what kind of a license<\/a>, if any, should you have to work; How should the internet be regulated<\/a>?<\/p>\n

Now add to that list: just how should we safeguard sports from the taint of gambling?<\/p>\n

\"\"<\/a><\/p>\n

On this, particular question, the Supreme Court has recently written a decision in the case 16-476 Murphy et al<\/em> v. NCAA et al<\/em><\/a>, basically declaring that The Professional and Amateur Sports Protection Act<\/em> (PASPA) to be unconstitutional.\u00a0 PASPA outlawed states \u201cto sponsor, operate, advertise, promote, license, or authorize by law or compact\u201d gambling on competitive sporting events.\u00a0 The Supreme Court sided with the State of New Jersey (Murphy, who is Governor) that the law violated the Constitution\u2019s anticommandeering principle<\/a> (10th<\/sup> Amendment) by not outlawing sports gambling but rather proscribed the States from legalizing it.<\/p>\n

Of course, the Federal Government couldn\u2019t outlaw sports betting as four states already permitted such activities, the most prominent example being the State of Nevada and its glitzy mecca: Las Vegas, and so it simply outlawed any other states from opening the door.\u00a0 The status quo may have persisted longer except for the rise of online sports betting.\u00a0 As Richard Wolf points out in his USA TODAY piece Supreme Court strikes down ban on sports betting in victory for New Jersey<\/a><\/em>,<\/p>\n

What has made the [PASPA] law anachronistic is the advent and rapid growth of Internet gambling. Rather than stopping sports betting, it helped push more of it underground, creating a $150 billion annual industry. That dwarfs the $5 billion bet in Nevada, the lone state with a legal sports book that preceded the federal law.<\/div>\n

With that much money on the line, it was no wonder that various states and municipalities wanted their hands in the boodle bag.\u00a0 The key question is why did the National Collegiate Athletic Association (NCAA) (along with the big four mens professional sport leagues) bring multiple actions to block New Jersey\u2019s desire to legalize sports betting?<\/p>\n

The surface answer to this question is simple.\u00a0 These businesses look to guard their interests in the integrity of the game, an interest that grew out of past scandals.\u00a0 The most well-known example is the scandal of the Black Sox<\/a>, in which members of the Chicago White Sox are accused of throwing the 1919 World Series in exchange for money from a gambling syndicate.\u00a0 The most important example for the NCAA is the City College of New York point shaving scandal in 1951<\/a>, in which numerous college players, across many teams, were implicated in fixing games for quick money.\u00a0 Both of these scandals severely damaged public trust in organized sports, in turn damaging the marketability of the product these leagues offer.<\/p>\n

But does this answer really hold water?\u00a0 According to Supreme Court Ruling Favors Sports Betting<\/a> by Adam Liptak and Kevin Draper of the NY Times<\/p>\n

Officials across sports have for years complained that legalized wagering would lead to the corruption of their games through match-fixing, though there is no indication that is a realistic concern. Sports betting is legal and wildly popular in Britain, for example, but the integrity of the Premier League has not suffered. In fact, legalizing gambling allows companies and leagues to monitor gambling patterns and flag betting irregularities that could suggest corruption.<\/div>\n

Liptak and Draper conjecture that:<\/p>\n

The leagues and their teams long fought efforts to make it so, because, among other reasons, they were not assured of being able to directly tap into the new, vast revenue stream.<\/div>\n

suggesting something akin to professional jealousy.<\/p>\n

I think that the real answer, at least in the case of the NCAA, lies deeper in the fact that their economic viability depends on what is essentially an indentured workforce.\u00a0 The reason that college players are interested in \u2018quick money\u2019 is that they are the primary talent for a multi-billion-dollar industry but share in very little of the benefits.<\/p>\n

Sure, they receive tuition remittance (i.e. scholarship) from the institution that they attend and won\u2019t be burdened with student debt for an education that may be worthless (as so many degrees seem to be these days) but that\u2019s about it.\u00a0 They have to work very hard for this perk.\u00a0 Often, they have to risk their health in meeting their athletics obligations.\u00a0 They don\u2019t have the amounts of free time other students have and they are subjected to substantial limitations on their free speech and their pursuit of economic success.<\/p>\n

I am not arguing that they should be given a better deal or that the institutional agreements are unfair.\u00a0 These students have decided, for a variety reasons known only to them, to engage in a contract with the colleges and universities.\u00a0 And it is true that some of them strike it rich after they\u2019ve paid their dues as college players by joining the professional leagues; but the percentages are quite low and the promise of a fat payday will only keep a small fraction of the players in line.<\/p>\n

Rather, I am simply arguing that the amateur athletes feel a lack of equity (in the economic sense) and can be tempted easily by gambling.\u00a0 The cleanest way for the NCAA to protect the integrity of the game is to drop the fig-leaf illusion of student-athletes \u2013 an idea may have made sense decades ago when intercollegiate sports was more a tradition and far less a business \u2013 and pay the students.<\/p>\n

A bit of reflection should show that PASPA never really protected collegiate sports as intended.\u00a0 Any sufficiently industrious player can figure out a way to thwart the ban on sports gambling.\u00a0 Maybe Johnny the star wide-receiver can\u2019t bet but second cousin George can and how can we prevent them from conspiring to fix a game.\u00a0 The better course of action is to provide Johnny with an economic incentive to play honestly; but doing so cuts into NCAA profits.\u00a0 Rather the NCAA would rather have the government bear the cost of safeguarding the integrity of the sport \u2013 an unsportsmanlike attitude if there ever was one.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The intersection between the legal world and the economic world is often very interesting.\u00a0 The usual topic of debate centering on the deregulation or prohibition of some activity that is... Read more ><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-633","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=633"}],"version-history":[{"count":1,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/633\/revisions"}],"predecessor-version":[{"id":634,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/633\/revisions\/634"}],"wp:attachment":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}