In his capacity as a Columnist for California Sports Lawyer®, Founder and Managing Attorney Jeremy Evans has written a column about best practices in sports betting limitations in college sports and beyond.
You can read the full column below.
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Learning from our past is often the best path in planning for the future. Sports betting in America was often shunned from mainstream use because of a moral, ethics, and legal complex. When the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) was overturned by the Supreme Court of the United States in Murphy v. NCAA (2018) because of the anti-commandeering provision in the Constitution, the Court reasoned in their decision that even if morals and ethics could be good policy, the federal government through Congress, the legislative branch, could not commandeer the states not to do something. Once PASPA was overturned, the floodgates were opened to begin the gold rush of sports betting across these United States.
The Supreme Court also reasoned that even with PASPA being deemed unconstitutional, it still differentiated between private and state actors with regard to sports betting and licensing. Meaning that even if a company wanted to be a sports betting provider (like a sportsbook) in a certain state, it would need to be licensed by the state authority to do operate. The states would be required to set-up licensing processing for private entities to engage in the sports betting business.
Understanding the Supreme Court’s decision is essential to understanding the role of government in licensing with a specific focus on highly regulated industries. Highly regulated industries are those that require additional coverage because bad actors and fraud tend to harm consumers more frequently or at least have a chance to and in the case of sports betting, the players and franchises too. Furthermore, the idea of sports betting changing or altering the outcome of a sports match offends the very fabric of truth in sports. An altered outcome by sports betting is the equivalent of being told the ending to a movie prior to seeing it. Sports betting, unregulated, has the chance to turn a game of chance into entertainment as a script, which is dangerous and not what consumers, the players, franchises, leagues, or even broadcasters bargain for.
It is also true that sports betting represents a large portion of tax collections so the government is incentivized to regulate to make sure compliance with the law and tax revenue. It seems that all parties involved with sports betting have some level of concern in regulation and oversight. With the aforementioned in mind, NCAA President Charlie Baker has called for a ban on proposition betting (e.g., “prop bets”) for college sports. The reasoning for a ban is to prevent betting that is targeted to a players performance. For example, how many points a certain basketball player will score in the first half, how many fouls committed, etc. The downside of prop bets is in their ability to shave points or purposefully doing or not doing something to effectuate an outcome. The problem is not only the concern of changing an outcome of a game, but also in a players performance. Again, it turns a game of chance and performance into a script of entertainment.
NCAA President Baker’s dilemma is that the entity he leads has been unsuccessful in convincing Congress to change laws surrounding the business of college sports with regard to state-led name, image, and likeness (“NIL”) legislation, employee exemption status, and likely sports betting regulations. However, states have tremendous power to legislate and stop legal prop betting. Baker’s plan should be state-focused, specifically where sports betting is legal and even more specifically where prop bets are allowed. Frankly, Baker’s best path and best practices should be focused with the conferences, state legislations, and colleges to best regulate and manage the college landscape. It is both the best pathway to success and more realistic and opportunistic.
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About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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