States miss out on Super Bowl wagering

Federal ban on sports betting ripe for repeal

February 05, 2011|By Dan Rodricks

Phil Mickelson, the professional golfer, won so much money off the Baltimore Ravens in the Super Bowl a decade ago that he was able to stuff all his cash winnings in a bag and give the bag its own seat on the flight home from Las Vegas. Mr. Mickelson shared the winnings with friends and relatives. Back in the summer of 2000, they had put up $20,000 for the Ravens to win the Super Bowl against 22-1 odds. I'll let you do the math on the payoff.

While Mr. Mickelson had all that cash in the bag on his chartered flight home, he still had to deposit the moolah in a bank and write checks to the other winners in his syndicate. "I'd wanted to give everybody cash," he told USA Today at the time, "but I'm realizing now that I can't do that because of the tax implications. I've got to write checks for documentation."

Ah, yes, tax implications.

An amazing amount of money will be wagered on the Super Bowl again this year. Estimates are in the billions. Only a small fraction of the total, as little as 1 percent, is believed to be wagered in Las Vegas, according to a gambling expert quoted by a newspaper in Dallas, site of this year's big game. Last year's Super Bowl handle in Nevada was about $82 million. I'll let you do the math on what the total amount, nationwide, might be.

With so much gambling already legalized and taxed by the states through lotteries, racinos and casinos, it remains wholly stunning to me that wagering on professional football is so limited. In fact, professional sports generally, and the National Football League particularly, are "protected" by federal law and by the courts.

Only four states — Nevada, Delaware, Oregon and Montana — are allowed to offer betting on the NFL, and that's only because they were grandfathered into legality after Congress passed the federal ban on betting on the major professional sports in 1992. Those four states had some football-related betting before the law went into effect, and they were allowed to continue — as long as they offered wagering in the same form they had offered it prior to 1992.

That meant no single-game wagering for Delaware, which restarted sports wagering in 2009. Courts ruled that the state could only offer parlay wagering on NFL games — that is, a single bet on three or more games. To win a football bet in Delaware, you have to win all the wagers in your parlay. If you lose one wager, you lose the whole bet.

This has put a dent in Delaware's expectations for revenue from sports betting, according to Vernon Kirk, the assistant director of the Delaware Lottery. He described revenues in the two years that Delaware has offered NFL parlays as "modest." The total sports betting handle at the racinos at Delaware Park, Dover Downs and Harrington Raceway amounted to about $13 million off the 2010 NFL season. That was up by about $2 million from the 2009 season, Mr. Kirk said.

If single-game betting were allowed in Delaware for the Super Bowl, Mr. Kirk said, the state could probably see in one weekend the football handle it saw all season.

Under the Professional and Amateur Sports Protection Act of 1992, Delaware is the only state east of the Mississippi allowed to offer betting on professional football.

When one stands back and regards the whole professional sports vista with the understanding that billions of dollars are wagered every week on it, particularly NFL games, and one looks at the immense struggles of governors, legislators, mayors and county executives to balance budgets, it's remarkable that such a restrictive federal law still stands and that so much gambling goes on without a significant portion to ease the burdens on taxpayers.

If there is so much illicit sports betting, and some allowed legally in even a few states, I fail to see how the federal law "protects" athletes from the corruptive temptations of gambling. If we could just get over our squeamishness, there's no reason why full-scale sports betting across the country — allowed in any state that chooses to authorize it — shouldn't be organized in a way that benefits, among other entities, the professional sports franchises and the athletes employed by them, further insulating them from temptations to fix games.

As Mr. Kirk points out, there is a growing movement for repeal of the federal law, and the effort is coming, as it should, from the states asserting their rights under the Constitution.

Dan Rodricks' column appears Tuesdays, Thursdays and Sundays. He is the host of Midday on WYPR, 88.1 FM. His e-mail is dan.rodricks@baltsun.com.

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