Adam Silver, an NBA Commissioner, published a piece in the New York Times citing the reasons as to why Congress should legalize sports betting in the US. He reasoned that illegal gambling on football, basketball, and other popular sports, is an enormous industry that is currently being run by shady offshore sites and illegal bookies. He argued that it would be better to bring the illegal business to the open in all states and thus be able to regulate it similarly to in Nevada.
The Illegal Gambling Industry
There is no substantial data on the volume of underground sports betting activity in the US. However, some estimate that almost $400 billion is wagered illegally on sports games each year. This is just an estimate, though, as it is very tricky to approximate the scope accurately of any illegal industry since it is in criminals’ best interest to keep their business underground. There are other reports that maintain the sports gambling industry to be below $50 billion.
What The Illegal Gambling Industry Looks Like
When you think of illegal gambling, you may have images of bookies, violence, and mobsters in mind. However, although this underground gambling industry does exist, technology has made illegal gambling much more accessible. The convenience of illegal gambling has made it so that anyone can go on his or her computer and illegally gamble, which is why the illegal gambling business can thrive in plain sight.
Where Illegal Gambling Money Goes
R.J. Bell, the founder of Pregame, stated that an estimated $10 billion is bet on the Superbowl each year while 12 billion is illegally wagered on the NCAA men’s tournament. The website Pregame.com, which gives out information on sports betting, has estimated that for every $100 bet on sports, there is $99 wagered underground. This means that only 1 percent of the betting action takes place in Nevada, which is one of the only states that allows for sports betting under the United States law. It is also estimated that illegal wagering is split 50-50 between offshore online sportsbooks and local bookies.
Why Illegal Sports Betting is So Popular
The reason illegal sports’ betting is so incredibly popular is because of the simple rule of economics. In general, offshore sports books and local bookies charge a substantially less amount in ways of fees. This makes novice and professional sports betters alike lean towards betting illegally, as they can maintain a high percentage of winnings to beat the sportsbook. On the other hand, legal betting in Las Vegas and the like has much higher fees involved, and thus puts less money in the hands of the bettors. Additionally, there is no real way for the government to prosecute those who illegally gamble, and so illegal gamblers are mostly left alone.
Why Sports Betting Became Illegal
In 2006, the US created the Unlawful Internet Gambling Enforcement Act, which made it illegal for sites to take money from people in the US. Due to this law, at least half of online gambling operators within the US were forced to eliminate their service. The law had a detrimental effect on the legal online gambling industry, which forced many US residents to try their hand at illegal gambling operations.
The History of Gambling Legalization
The history of gambling in the US has not been a straight arrow path from an illegal vice to an accepted form of activity but instead has undergone a predictable pattern: gambling becomes legalized, followed by a certain scandal, which then results in its renewed prohibition. These bans tend to last years if not decades, at which point it is then reopened for discussion and the cycle continues. Chances are this cycle will continue to foster a legal sports betting industry.