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Case that could legalize sports gambling argued in Supreme Court today


Today the United States Supreme Court will hear oral arguments in a case that could make sports gambling legal in all 50 states. Or could just make it legal in New Jersey. Or could change nothing. Odds are, however, that there will be a pretty big change in the sports gambling landscape after the case argued today is decided.

The short version: the State of New Jersey has challenged the federal law that has outlawed sports gambling across the nation. The law is called the Professional and Amateur Sports Protection Act of 1992 (PASPA), and only Nevada -- which had legal sports gambling before its passage and was grandfathered in -- is exempt. New Jersey wants to legalize sports gambling too, thus the challenge.

In the past all of the major sports leagues, including Major League Baseball, opposed New Jersey’s efforts, wishing to keep sports betting illegal. In recent years, however, the NBA has switched positions on it completely, arguing that PASPA should be repealed instead. Earlier this year Rob Manfred signaled the MLB is softening as well:

“There is this buzz out there in terms of people feeling that there may be an opportunity here for additional legalized sports betting,” Manfred said. “We are reexamining our stance on gambling. It’s a conversation that’s ongoing with the owners.”

To note just how much of a reversal this is, recall that back in In 2012, Major League Baseball — then led by Bud Selig — sued in an effort to block legalized sports wagering in New Jersey, saying it would raise doubts about the integrity of the game.

The NBA has said that it’d like the legalized approach because one possible outcome of the case -- that only New Jersey can legalize it now and other states can do what they want at various other times -- would leave a patchwork regulatory scheme that would make things complicated. Of course, really driving the NBA position on this -- and I suspect Major League Baseball’s evolving position -- is the realization that they can make a lot of money off of sports gambling, even if it’s only indirectly via licensing fees and all of that kind of stuff.

As for my view: I’m not personally a gambler and tend to think that gambling has a negative net impact on society. However, people are gambling on sports illegally anyway, so why not bring some of it into the light? Even if gambling is harmful, prohibitions tend to be self-defeating and ineffective. It seems to me that it’s better to regulate a potentially harmful activity than to engage in the folly of thinking people won’t do it if you make it illegal across the board.

As for the baseball-specific stuff: yes, the sport has a long history of anti-gambling sentiment. Indeed, one can argue that modern baseball would not exist if it were not for its strong reaction to gambling in the wake of the Black Sox scandal in 1919. Gambling has been such a negative thing to MLB brass for so long that it has permanently banned its all-time hit leader as a result of it and temporarily banned two of its greatest ever players -- Mickey Mantle and Willie Mays -- for merely associating with casinos.

Things have changed an awful lot in the past 30-40 years, however. The threat to the integrity of the game due to gambling is far less now than it once was given the lower financial incentives in play. Players make a lot more money now and the cost of getting them to risk their careers and integrity over throwing a ballgame or seven seems pretty prohibitive. Perhaps the risk is greater when it comes to umpires, managers, front office employees and coaches, but if sports gambling was legalized everywhere, I would expect MLB to increase its scrutiny of its people’s activities in this regard.

What’s next: after today’s oral arguments, the Supreme Court will decide. The decision could come out at any time, but it will be no later than June.

Follow @craigcalcaterra