Silver dreams of sports gambling gold rush

On Nov. 13, NBA commissioner Adam Silver joined the ranks of John McCain, Vladimir Putin and Angelina Jolie by writing an Op-ed article for The New York Times. In this case, the NBA’s commissioner took to the pages of the Times to encourage Congress to “adopt a federal framework that allows states to authorize betting on professional sports.” This groundbreaking statement went against the NBA’s previous stances on gambling and came after the Association agreed to make the fantasy sports-betting site, FanDuel, their fantasy sports partner with a four year agreement.

Officially, gambling on sports in the United States (excluding Nev.) is illegal under the Professional and Amateur Sports Protection Act of 1992 (PASPA). But whether this law is being followed is hard to tell these days with all the talk of money being lost and won on fantasy sports. Fantasy sports allow fans to compete against each other by composing make-believe teams with players they believe will perform the best on any given day of competition. Then the fantasy leagues use stats from real athletic competitions to give out points and determine winners. Fantasy sports leagues have prospered in the Internet age and the ruling of the Unlawful Internet Gambling Enforcement Act of 2006 that made Internet fantasy sports gambling legal.

In particular, single-day fantasy sports leagues that take place in a single day of competition instead of an entire season have skyrocketed in popularity over the last year. A charge led by fantasy gambling sites such as FanDuel and Draft Kings.

In this way, fantasy sports make sports gambling legal but just not directly. Silver’s opinion article in the New York Times sought to do away with the barriers and allow complete sports gambling across the U.S. as long as it is done in a regulated manner. Silver acknowledged that sports gambling is already taking place on a large scale and estimated that in the U.S., “$400 billion is illegally wagered on sports each year.”

But the way that gambling takes place leaves room for improvement and takes place mostly through “illicit bookmaking operations and shady offshore websites.” According to Silver, “There is an obvious appetite among sports fans for a safe and legal way to wager on professional sporting events.” And the U.S. should authorize gambling on sports in a responsible way.

Silver’s Op-ed hit the presses at a time when sports betting is a contentious issue, and especially in N.J., where Governor Chris Christie allowed sports gambling as recently as Sept., only to have the ruling rejected by a federal court because it violated PASPA. Silver acknowledged that Christie’s decision was “a law the NBA and other leagues have opposed.”

Supported by the fact that sports gambling is illegal at a federal level, Silver took a stand that betting on games should be federally legal and monitored, not on a state to state basis but everywhere. A critical elaboration considering that the NBA’s disapproval of Governor Christie’s decision would have seemed two-faced in light of the Association’s new partnership with the online fantasy gambling site, FanDuel.

Even though Silver is the first leader of a major American sports league to encourage the legalization of sports gambling, internationally, he is not progressive. Outside of the U.S., sports betting is extremely popular and legal. In England, fans are able to bet on soccer matches online, from their phones, or, if they are at the game, from team sponsored gambling kiosks. The NBA is popular on an international scale and is heavily bet on outside of the U.S., and yet a fan can’t wager on a game from the location it is being played. Outside of the U.S. sports gambling is legal, regulated, cutting edge and, possibly most important to Silver, profitable.

It is easy to forget that a dark shadow falls on the NBA and gambling after 2007’s controversy involving NBA referee Tim Donaghy gambling on games that he was officiating. Claims arose that Donaghy even made calls to influence point spreads and his own betting outcomes. Not only did Donaghy violate NBA protocol but he also broke the law and as a result was sentenced to 15 months in prison and banned from officiating in the NBA. The Donaghy scandal took place before Silver was commissioner but it is surely an event on his mind as he takes a pro-gambling stance. Donaghy’s actions display that if gambling on NBA games is to become legal and widespread, it must be heavily regulated and monitored in order to protect the quality and morals of NBA basketball games.

Silver’s opinion may seem passionate but truly it was economically strategic. According to BusinessInsider.com, the NBA trails both the MLB and the NFL in earnings as the two leagues made $8 billion and $10 billion in 2013, respectively. The National Basketball Association only managed to bring in $4 billion in profits. While still a key member of the U.S.’ “Big Three” sports leagues, the NBA has a smaller nest egg to fall back on when compared to other leagues and must be more fiscally-aggressive in order to make a profit. Legalized gambling would allow the NBA to take on sponsorships from casinos, increase their number of followers and charge a fee on bets placed on their games. With this in mind, Silver kept himself and the NBA ahead of the curve with his announcement and started the process of opening a new revenue source for the NBA.

After David Stern’s highly praised 30-year career as NBA commissioner ended in February of this year, Silver has already began making positive waves. Starting with Silver’s skillful lifelong expulsion of Donald Sterling at the very beginning of his term, the commissioner continues to lead the Association in a positive direction. Silver’s Op-ed reveals that even though Stern is retired, the NBA and its future continues to be held in intelligent and competent hands.

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