On Monday morning, the U.S. Supreme Court handed down a monumental decision ruling that the federal law restricting sports betting was unconstitutional. Without getting into the weeds with the decision, which can be found here, the federal law named the Professional and Amateur Sports Protection Act (PASPA) was signed in 1992 and outlawed people making wagers on sporting events.
The battled had gone through the courts for years, with the state of New Jersey leading the charge arguing it should be the state’s choice whether or not sports betting is legal or not. The Supreme Court finally agreed with New Jersey, saying it was the state’s choice to implement legislation making it legal to wager or not.
That is key. It does not mean you can go out and start a betting parlor because Tennessee does not have the laws in place to allow it. Will they eventually? Perhaps, but for now, only a few states like Delaware and New Jersey had laws already in place and will open their doors to sports bettors in the near future.
As that was a very basic overview of the decision, let’s now go into what it means for the future of sports and specifically with the NBA and the Memphis Grizzlies.
Maintaining the integrity of the game
Before this ruling, everyone knew that sports betting was possible through sketchy overseas websites or through your local bookie. That is important because the American Gaming Association estimates people illegally wagered about $150 billion on sports each year (LINK). This is untaxed, unregulated money that can now be going back to the states or to the leagues themselves.
The NBA has many decisions to make after this landmark ruling. The league has long been an advocate for legal sports betting, but still they are faced with many questions about the “integrity of the game.”
Statement from NBA re: legalization of sports betting: pic.twitter.com/GH0U41NSOw— David Payne Purdum (@DavidPurdum) May 14, 2018
“Integrity” is what many of the league responses emphasized after this decision came out. The leagues want to make sure their game is not compromised with players/teams being influenced by outside wagering that is now more accessible across the country. It is a valid concern because only five or so years ago it was taboo to talk about the point spread or odds before a game tipped off. Now, it has become routine to talk about the spread pregame, and it will only open up more which may trickle down to the players.
My comparison to this is what we see with fantasy sports. Fans and fantasy owners are almost constantly tweeting to players about their performances in the fantasy context. These players notice because of their engagement on social media. This could translate to fans telling the player the point spread or player prop bet before the game and having it on their minds. Plus, this doesn’t even bring the liabilities at the college level.
Because of this, the leagues must come together for some kind of regulation. The NBA, with help from the MLB, have actively lobbied in an attempt to create a more favorable sports betting law than PASPA. Nothing to restrict sports betting, but just to have in place the regulation to prevent a huge scandal.
NBA wants some skin in the game
In this proposed legislation, the NBA has introduced the idea of the league getting one percent “integrity fee” of the total amount wagered on the NBA. This one percent would be a huge cut at the end of the day. This money would also be distributed to the teams themselves similar to the revenue brought in at the end of the year. The Grizzlies would benefit from this, as the value of each franchise would rise to another level. It would increase the cap and make a huge change in the free agency market.
This idea was a smart move for the league that could be a major positive going forward. The proposal came with a nervousness about the regulation cutting them out of the game, along with not having any insurance for putting their game at risk for scandal.
Immediate changes for the NBA
As for instant changes to the league, there will not be many at all to the product on the court. Gambling to some extent has been available for some time, so it does not change much even as it has been deemed legal on the national level. The changes will only come over time as sports betting legislation is introduced state by state.
Throughout the next decade, I am sure the league will have a plan tailored to sports betting that is not necessary today. Scandals will happen, that is just the way it is. Even before Monday’s decision, basketball had been the center of many controversies with point shaving both in college at Boston College and in the pros with referee Tim Donaghy. The league will not change much for today’s game, but in the future minor tweaks will occur to keep the integrity of the game.
Increasing the overall interest
Finally, the last major impact this Supreme Court decision will have to the NBA is to the overall popularity and interest in the game. Even as sports gambling is legal in Nevada and also occurred in the underground market, this legalization will help grow the game a great deal. The casual gambler who wanted to place a bet on an NBA will not have to travel to Nevada any longer. It will bring interest to the sport from some that did not have a reason to follow before. Plus, even if you are a heavy gambler, you will only do it more now since it’s easily accessible. This application is for all sports as well.
Also, I could see the ability to bet on sports come right in the stadiums for the bettors. Stadiums could set up kiosks for individuals to place bets on the game they are about to see. Of course, as mentioned, the state would have to allow it, but it could open up a new line of revenue for the team from the home games. Sorry Memphis, you will have to wait for Tennessee to pass legislation, but there could be a possible solution being so close to Mississippi.
This Supreme Court decision will change sports drastically in the coming future. It will increase the popularity of the game and may bring in extra revenue if the legislation is put in place to give the leagues a cut of the earnings.