Today’s guest columnist is Martin D. Edel, co-chair of Goulston & Storrs’ sports law practice. He teaches sports law at Columbia Law School and antitrust law at Brooklyn Law School.
Shoeless Joe Jackson. Pete Rose. Jontay Porter. What do these professional athletes have in common? Each player was banished from his professional sport for life.
For over one hundred years, most states have criminalized sports gambling and U.S. professional sports leagues have forbidden sports gambling. In 2018, that world turned upside-down. The United States Supreme Court held a federal ban on sports gambling was unconstitutional, paving the way for states to pass laws permitting sports gambling. The internet brought on-line gambling to almost everyone. Between 2018 and 2024, most states legalized sports betting and millions of bettors have wagered over $220 billion legally through on-line sports platforms in the U.S., such as FanDuel and DraftKings.
What have U.S. sporting leagues done to maintain and enhance fan interest in sports betting, realize some portion of the billions of dollars wagered and maintain their credibility? Do these benefits of sports gambling outweigh its detriments?
Sports Gambling and the Twenty-First Century Changes
Sports gambling and sports betting are synonymous. They mean wagering on sports. While sports gambling initially consisted of betting on the outcome of games, it has evolved. Now, myriad variations, including “under/over” betting and “prop betting” on individual player statistics are available with the tap of a button. Historically, most U.S. states criminalized all forms of gambling, including sports betting (with carve-outs for horse racing). The stated reasons included stopping the immorality of gambling; preventing bettors from becoming addicted; keeping unsavory elements out of sports; and preserving the credibility of sports by avoiding “fixed” contests. And while the moral standards endure, the monetary temptation has only grown.
When illegal sports gambling retreated into a seamy underground network of gamblers, bookies and number runners, U.S. sports leagues tried different strategies to minimize the impact of illegal gambling by players and maintain integrity from a public perception that games were manipulated. In the wake of MLB’s Black Sox scandal of 1919, where professional gamblers paid eight Chicago White Sox stars, including Shoeless Joe Jackson, to lose the World Series, the baseball owners elected the first-ever sports league commissioner, Judge Kenesaw Mountain Landis, with a broad mandate to act “in the best interests of the sport.” Using that executive authority, Landis banned all eight players for life. Leagues also hired investigators to look into sports gambling claims. But these protections did not eliminate gambling by players and had no effect on sports gambling by fans.
Players continued to bet illegally. For example, in 1963, Paul Hornung, one of the premier NFL running backs, and Alex Karras, a top defensive tackle, were caught gambling and associating with “undesirable persons.” NFL Commissioner Pete Rozelle, using his broad mandate to act in the best interests of the NFL, suspended them indefinitely (later reduced to one season). In Major League Baseball, Pete Rose admitted gambling (after being discovered in an investigation) and was banned for life in 1989.
In 1992, the federal government enacted the Professional and Amateur Sports Protection Act (“PASPA”). PASPA rendered sports betting illegal in most states (except where already legal such as Nevada) and precluded states from enacting new sports betting laws. PASPA’s sponsors included Senator Bill Bradley, a former professional basketball player. President George W. Bush, a former owner of the Texas Rangers, signed the bill into law.
After the Millenium, the U.S. sports betting world changed. Over ten states modified their anti-gambling laws to exempt lotteries and to permit the building and regulation of casinos on state land. By 2010, the internet brought the excitement of professional sports onto fans’ portable devices. Games now could be watched anytime and anywhere by anyone. Entities such as FanDuel and DraftKings developed internet platforms for people to wager on sports contests with state regulation. Fantasy leagues, with points-based contests in lieu of cash, arose ostensibly to fill demand and bring more fans in on the action.
The revenue-producing opportunities for U.S. professional sports leagues were immense, including new sponsorships from the betting platforms, returns on investment in the platforms and enhanced fan interest in the sport which could result in more ticket sales, merchandising sales and internet TV package purchases. U.S. professional sports leagues also viewed these state-regulated internet platforms as creating credible ways to wager on sports contests and limit manipulation of the sporting contest.
But these efforts would be fruitless unless states enacted legislation exempting sports betting from their anti-gambling laws. PASPA, with its preemption of such state laws, stood in the way. In 2018, in Murphy v. NCAA, 138 S.Ct. 1461 (2018), the United States Supreme Court invalidated PASPA, holding it violated the U.S. Constitution’s Tenth Amendment by preventing states from modifying or repealing state-law prohibitions on sports gambling. While not expressly endorsing sports betting, the Supreme Court’s 2018 decision precluded federal bans on sports gambling and gave states the right to repeal gambling bans on sports betting.
Changing The Rules and the Effect of the Changes
By the end of 2024, 38 states and the District of Columbia had enacted laws decriminalizing and permitting sports betting. With broader legalization and the more widespread use of the internet since the Pandemic, in 2024 Americans wagered $147.9 billion on sports contests. Between 2018 and 2024, legalized U.S. sports betting revenues (the amount retained by the betting platforms) rose from $0.48 to $13.7 billion, with 95% coming from on-line betting.
Freed from the criminalization of sports betting, professional sports leagues, including the NBA, NFL and MLB, formed sponsor partnerships with FanDuel and DraftKings. In addition, teams in the major sports leagues invest in, and buy advertising from, FanDuel and DraftKings. It is common to see sponsors’ ads on team scoreboards or banners.
But with these opportunities also came the need for U.S. professional sports leagues to take steps to maintain the integrity of their sports. The leagues have adopted and enforced rules that: (1) preclude league players, referees and umpires, team personnel, team owners and league personnel, from betting on their sport, (2) educate the same group that sports betting on their sport, directly or through friends, families or others, is prohibited, would be sanctioned severely and would cause damage to the credibility of the sport; (3) enhance the monitoring of sports betting, and (4) clarify and provide for severe penalties for violations. One league official described the effect of these rules on league members as: “No betting, no fixing and no tipping.” To enhance regulation and detection, sports leagues have partnered with state authorities and betting platforms to identify and investigate unusual betting patterns. They also have hired outside agencies to investigate.
On-line betting platforms, states, professional sports leagues and fans have benefitted. Flutter Entertainment, the parent of FanDuel, reported 2024 U.S. revenues of $5.8 billion, while DraftKings reported 2023 revenues worldwide of $4.77 billion. Each reported millions of bettors. In 2024, states recognized over $13.7 billion in sports betting revenues and $2.6 billion in state and local tax and other revenues. Sports leagues and teams have generated substantial additional revenue from sponsorships with sports betting platforms. Fans have wagered billions of dollars legally and, according to some studies, may have become more interested in following sports.
Not all the effects have been salutary. Players continue to engage in illegal gambling. In 2024, the NBA investigated Jontay Porter, the Toronto Raptors’ center and power forward. The NBA found Porter had manipulated outcomes in game on which he bet, disclosed confidential information to sports bettors and limited his participation in one or more games for betting purposes. NBA Commissioner Adam Silver stated “[t]here is nothing more important than protecting the integrity of NBA competition for our fans, our teams and everyone associated with our sport, which is why Jontay Porter’s blatant violations of our gaming rules are being met with the most severe punishment.” The NBA suspended Porter for life.
In 2023, the NFL suspended five players indefinitely and the NHL suspended Shane Pinto, the Senators’ center, for 41 games for violating their league’s anti-gambling policy. In 2024, MLB found Tucupita Marcano, a San Diego Padres infielder, had gambled more than $150,000 on nearly 400 bets on MLB games. MLB banished Marcano for life. MLB also suspended four other players for a year each for violating its anti-gambling policy.
Sports bettors increasingly have used social media to vent their anger against players for the bettors’ losses, resulting in on-line death threats, racist comments and demands for money. Also, with millions of known on-line sports bettors, sports addiction likely has increased and PSA warnings likely will not cure such addiction.
Moreover, state regulation has not eradicated the illegal sports betting underground. Digital sports betting constantly is evolving, making detection of unauthorized betting more difficult. New betting patterns likely will result in additional costs and new problems in identifying, detecting and punishing unauthorized sports betting.
Have U.S. professional sports leagues and states created enough protections to make the benefits outweigh the disadvantages? Wanna bet?
