By: Andrew Ciulla
In 2018, the Supreme Court paved the way for states to legalize sports betting by striking down the Professional and Amateur Sports Protection Act, passed in 1992, by a 6 to 3 vote. The Professional and Amateur Sports Protection Act prohibited sports betting except in four states where it had already been legalized: Nevada, Delaware, Montana, and Oregon. The Court reasoned that Congress had unconstitutionally infringed on the states’ law-making authority. Since 2018, 35 states have moved toward the legalization of sports betting. The process, however, can be very complicated and lengthy. For example, New York passed a bill legalizing sports betting in 2013, but did not open its first official sports book until July 2019. Likewise, mobile sports betting did not launch until years later, on January 8, 2022.
Nonetheless, the potential economic benefit for states that allow sports betting may be well worth the wait. An Oxford University report found that the legalization of sports betting would generate between $11.6 and $14.2 billion towards the U.S. GDP annually. Sporting events are happening year-round with large occasions bringing in equally large bets. For Superbowl LII, Americans bet an estimated $4.76 billion. In addition, legalizing sports gambling would reportedly create upwards of 150,000 new jobs. One of the critical factors driving potential growth is bettors having easy access to sports betting platforms. Companies like DraftKings, founded in 2012 in Boston, and FanDuel, founded in 2009 in New York, are two of the largest fantasy sports services with millions of users each. Daily fantasy sports allow users to gamble from their mobile devices without leaving the comfort of their living rooms.
So why has the United States, particularly Massachusetts, been so averse to legalizing gambling? The short, and probably too simplistic answer, is the Puritans. Puritans were English Protestants who founded the colony of Plymouth to practice their own brand of Protestantism without interference from the English crown. In 1638, Puritans passed a law that outlawed cards, dice, and every other game of chance. They also prohibited various activities, such as wearing fancy clothing, using bad words, drinking too much alcohol, being lazy, and even celebrating Christmas. Such decisions led prominent American Journalist H. L. Mencken to opine that “Puritanism is the haunting fear that someone, somewhere, may be happy.”
Has a ban, following Puritan principles, stopped sports gambling in Massachusetts? Yes and no. While Massachusetts has yet to legalize sports betting, four neighboring states have—Rhode Island, New Hampshire, Connecticut, and New York. Consequently, Massachusetts residents are taking their money to bet in other states. According to DraftKings, the only sports betting operator in New Hampshire, 27% of people betting on March Madness in NH listed their home address in Massachusetts. Senate Minority leader Bruce Tarr of Massachusetts emphasized this economic concern:
It is important that we do take this step . . . so that we can reap the benefits of an industry that is happening all around us and by many accounts, one that’s happening illegally within the borders of the Commonwealth of Massachusetts. But in order for us to do that successfully, we have to have legislation that authorizes a viable industry . . .
However, not everyone agrees that sports betting will have a significant economic impact. For example, researchers at the University of Massachusetts Amherst contend that legal sports betting in Massachusetts is projected to have a far less financial impact than the State’s casinos and lottery. The comparison arises from tax rates being significantly higher in casinos and far fewer people engaging in sports betting than in other gambling activities.
Furthermore, gambling can be a very addictive activity that takes a toll on the lives of bettors and their families. According to the National Council on Problem Gambling (“NCPG”), the inability to stop gambling despite negative consequences— called problem gambling —affects approximately . Of these five million, only around eight percent will ever seek help for their problem. Furthermore, gambling problems may worsen by taking away the extra step of physically withdrawing cash from an ATM or driving to a casino. According to one study in the Addictive Behaviors Journal, sports betting, as opposed to other forms of betting, has stronger correlations to problem gambling because the bettor believes they have a greater chance of controlling the probability of winning. This phenomenon is dubbed the “illusion of control.”
Moreover, there is a history of sports betting leading to corruption. Most notable was when eight players of the Black Sox threw the 1919 World Series for gamblers. There also seems to be a connection with illicit groups: Jimmy Burke, a notorious American gangster, was charged with conspiracy in the Boston College Basketball point-shaving scandal of 1978-1979. Corruption in sports is particularly a problem for college athletes who mostly go unpaid. The President and CEO of the NCAA Division I athletics Directors Association, Tom McMillen, stated college athletes are especially vulnerable to large amounts of money flowing through their game and expressed concern about where all the new money would go.
Governor Baker addresses both collegiate corruption and gambling addiction in the now-signed sports betting bill. The bill allows bettors, 21 and over, to eventually bet virtually or in person on sports. However, the bill excludes high school, youth sports, and in-state college games unless they play in a tournament. So, for example, betting on Boston College basketball would be off-limits unless they were in March Madness. The theory is that the influx of gambling will be less influential in state college games. In conjunction with the sports betting bill, Governor Baker signed a mental health access bill to expand access to behavioral health services. The fundamental policy of the bill is to treat mental health the same way as physical health. The mental health bill directly responded to concerns over increases in gambling addiction arising from legalizing sports betting. Finally, a 15% in-person and fantasy tax rate, as well as a 20% rate on mobile betting, will generate an estimated $60 million annually. The tax revenues will go to several different needs: 17.5% will go to the Workforce Investment Trust Fund (grants to promote job opportunities in low-income communities); 9% will go to the State’s Public Health Trust Fund (investing in various programs to prevent and treat problem gambling); and 1% will go to a new Youth Development and Achievement Fund (providing financial aid to college students, after school programs and youth sports).
Unquestionably, Governor Baker’s new bill sets the tone for bringing Massachusetts up to speed with sports betting and generating tax revenue. Nevertheless, although promising, the annual revenue expectations are still just speculative. Additionally, banning betting on in-state college sports unless they are in a tournament does not seem to fully address the concern of protecting college athletes. As previously noted, it may prevent the Jimmy Burkes of the world from influencing some games. However, it does not stop them from trying to control larger tournaments, or simply games played out of state. Although, with Boston College’s recent basketball and football records in mind, we may not have to worry about someone throwing a tournament game anytime soon. Finally, the bill is promising in passing mental health legislation and creating a source to fund its development. Overall, the bill has potential, and Massachusetts residents with concerns can be comforted by the fact that the Gaming Commission may take a long time to iron out the framework with appropriate regulations.
Student Bio: Andrew Ciulla is a 2L at Suffolk University Law School. He is a staff writer on the Journal of High Technology Law. Andrew received a Bachelor of Arts Degree in International Studies, with concentrations in Ethics and Social Justice, from Boston College.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
