It is a widely acknowledged fact that prohibition never works. The Governments have tried to ban different things at various points of time in history, most notably alcohol, but this has always turned out to be an utter failure since prohibition only serves to drive the market underground. It is pretty much the same thing with sports betting, which is banned in the United States, but nevertheless commands a huge following, most of it through illegal channels.
People of all ages and from all over the world love to gamble; it is something to do with human nature. Prohibiting it does nothing to suppress demand for it and this in turn leads the business into the clutches of organised crime. Countries where sports gambling is banned, the United States is the best example, have a flourishing illegal trade in it.
Sports betting across the world is an immense industry and it is worth approximately $2 trillion every year. The United States alone is estimated to contribute a whopping $500 billion to this industry. Since sports wagering is illegal in all states except for a few, 80% of these bets are made illegally.
Some states in the US are chafing under a federal law known as the Professional and Amateur Sports Protection Act, enacted in 1992, because it does not permit betting on sporting events. The state of New Jersey enacted a law in 2012, which permitted sports wagering at casinos and race tracks so as to regulate gambling, while also benefit from it to the tune of around $120 million in tax revenues every year. However, this was not to be since the 3rd U.S. Circuit Court of Appeals went against the law in a 2-1 ruling recently.
The lawsuit against New Jersey was brought by the major sports bodies in America, which have got together to prevent sports betting from being legalised in the country. The NBA, NFL, NHL, and MLB, all have joined hands with NCAA to prohibit New Jersey and other states from permitting wagering on sports.
There are growing calls to change the federal law banning sports betting so that the industry gets the regulation that it so badly requires. Reps. Frank LoBiondo and Frank Pallone have taken concrete measures to control the federal government’s ban on sports betting. As a matter of fact, Pallone has also drawn attention to the fantasy sports betting industry in the United States that continues to be unregulated.
The growing fantasy sports business in the country does not fall under the ambit of the federal law banning sports betting because it is categorised as a game of skill and not of chance. However, it does draw in a huge amount of money. Fantasy sites received around $60 million in bets from the United States in the initial week of the NFL, almost double of the amount received by all of the Las Vegas based sports books put together.
It is very clear that the sports gambling industry needs a lot of transparency that comes from regulation. The United States Government will definitely have to step in to legalise it.