A recent article at ESPN called the U.S. sports betting market a “sleeping giant”, where almost $100 billion is expected to be bet (mostly illegally), only on NFL and college football this season. Will it ever wake up?
Betting in the U.S.
America is full of contradictions, mixing exacerbate libertarianism and puritanism. Betting seems to be by now, the nastiest word in sports.
However, Americans love betting. And they do it everywhere! The turnover of sports betting in the US has been estimated at around $400bn (£260bn) a year. But less than 4 percent of the amount bet on sports is wagered legally. Unless you are in Nevada, you’re probably not betting legally. Delaware, Oregon and Montana offer some forms of sports betting, and Nevada is the only state that can offer single-game wagering.
The aversion to legalised sports betting is that it will promote the fixing of matches that will taint the integrity of sports. And this reason is in part justified by the biggest sporting scandal in history, when gamblers fixed baseball’s World Series in 1919.
In order to preserve the integrity of sports, the Big 4 professional sports leagues (NHL, NBA, NFL and MLB) are the biggest opponents of legalisation. This situation is often called hypocrisy. Americans cannot bet on real games, but they can bet on “fantasy sports” leagues.
What is all about? A fantasy sport is a game where participants assemble virtual teams of real players of a professional sport. These teams compete based on the statistical performance of those players in actual games. This performance is converted into points that are compiled and totaled according to a series of rules. In fantasy sports, team owners draft, trade and cut (drop) players, analogously to real sports. Online fantasy sports are a multi-billion dollar industry, and fantasy NFL football is by far the most popular fantasy sport.
Incredibly, Fantasy sports betting is legal in almost all U.S. These leagues, which are based on the real-life performance of players, were specifically exempted from Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), the United States legislation regulating online gambling. And Professional leagues embrace Fantasy Sports betting. Just visit their sites
Daily Fantasy Sports (DFS) is a variation of Fantasy Sports. DFS are an accelerated version of the games, the outcomes of which are determined daily (or in a short time, generally in less than a week), rather than requiring an entire sports season of play. DraftKings and FanDuel are the absolute leaders and interest in these two companies is increasing exponentially as shown on Google trends.
According to iSpot.tv, DraftKings has spent over $16 million on television advertising in one week (late August 2015)
Why is it legal?
There is controversy regarding whether or not daily fantasy sports constitutes as gambling. “The legality of daily fantasy sports is the same as that of season long fantasy sports. Federal Law and 45 of the 50 US States allow skill based gaming. Daily fantasy sports is a skill game and is not considered gambling.” (taken from Draftking’s why is it legal)
At a US federal level, fantasy sports is defined and exempted by the UIGEA. Why would fantasy sports be exempted? Because it was deemed a “game of skill.”, while poker and sports betting are considered games of chance. According to US legislators, when you play poker or bet sports, you are gambling, but when you play fantasy sports, you are not gambling.
Winds of change
“Illegal sports betting is reaching new heights of popularity in America,” Geoff Freeman, president and CEO of the American Gaming Association, said. “It’s clear that a federal ban on traditional sports betting outside of Nevada is failing.”
New Jersey has been trying to legalise sports betting for three years, but was sued by the NCAA, NFL and other professional sports leagues and recently lost in federal appeals court for the second time.
However, NBA Commissioner Adam Silver posted a revolutionary article at the NY times: “Legalize and Regulate Sports Betting” from which we extracted some interesting concepts:
- “Betting on professional sports is currently illegal in most of the United States outside of Nevada. I believe we need a different approach”
- “Outside of the United States, sports betting and other forms of gambling are popular, widely legal and subject to regulation. In England, for example, a sports bet can be placed on a smartphone, at a stadium kiosk or even using a television remote control.”
- “In light of these domestic and global trends, the laws on sports betting should be changed. Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.”
- “These requirements would include: mandatory monitoring and reporting of unusual betting-line movements; a licensing protocol to ensure betting operators are legitimate; minimum-age verification measures; geo-blocking technology to ensure betting is available only where it is legal; mechanisms to identify and exclude people with gambling problems; and education about responsible gaming.”
- “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”
The contradiction between prohibiting sports betting and allowing fantasy sports betting, and the rejection about professional sport leagues promoting DFS is expressed by many people in many ways.
- “Are you a degenerate? Do you have an addictive personality? Well try this new form of gambling that probably won’t ruin your life”
- “The game of skill argument is crap. There is no functional difference between betting on players to play well or betting on teams to play well. Both require educated guesses and luck to win.”
- “NFL has opposed New Jersey’s efforts to legalize sports betting but plays annually in London at Wembley Stadium, where fans can make sports bets on site.”
- “NFL prevented the Cowboys’ Tony Romo from participating in a fantasy sports convention because it was held in a Las Vegas casino but runs its own fantasy Web site.”
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