You know Oregon’s going to do it?
Jump into legalized sports betting, that is.
According to the American Gaming Association, Americans already illegally bet $150 billion on sports every year. With the May 14, 2018 Supreme Court decision overturning the Professional and Amateur Sports Protection Act (PASPA) and allowing states to legalize sports betting, Oregon’s going to want to cash in.
A political consultant working with California card clubs, online and out-of-state gambling firms and sports leagues has already proposed for the November 2020 ballot an initiative to legalize sports betting in the state. The consultant submitted a formal request on June 11 to the state attorney general’s office to prepare a title and summary for a possible initiative.
Professional sports leagues are getting ready, too. They’ve have already made it clear they want a cut of the action.
Leagues would receive 1 percent of the total wagered on their sporting events under a proposal presented in May by NBA Senior Vice President Dan Spillane. “Without our games and fans, there could be no sports betting,” Spillane testified at a legislative panel studying the prospect of legalized sports gambling in New York.
The NBA and MLB have already drafted model legislation that would enshrine the 1 percent “integrity fee” in law and they have sent forth a phalanx of expensive lobbyists to statehouses to advance their agenda. The Professional Golfers’ Associationhas endorsed the integrity fee concept and the LEAD1 Association, which represents athletic directors at 130 colleges, including directors at the University of Oregon and Oregon State University, has said colleges deserve integrity fees as well.
“Our athletic directors are concerned not only about the vulnerability of young student-athletes to inducements of point shaving, but by the increased compliance costs to keep their programs clean,” LEAD1 said in a May 15, 2018 press release. “We have seen these cost increases in athletic programs in Nevada (for example, University of Nevada, Las Vegas (UNLV)) where sports betting is legalized, and these compliance costs can run into the hundreds of thousands of dollars. It is crucially important that states help athletic departments secure the extra resources to ensure that student-athletes stay out of trouble. A point shaving scandal would be catastrophic to an athletic department and university.”
Then, of course, there are the athletes. On April 12, 2018, before the Supreme Court decision, four players’ unions, the MLBPA, NBPA, NFLPA and NHLPA, issued a media release saying their members should get a cut of sports betting revenue, too. “Betting on sports may become widely legal, but we cannot allow those who have lobbied the hardest for sports gambling to be the only ones controlling how it would be ushered into our businesses,” the release said. “The athletes must also have a seat at the table to ensure that players’ rights and the integrity of our games are protected.”
Just as Oregon’s legislators have welcomed the influx of marijuana tax money, the prospect of sports gambling tax revenue probably has some of them salivating. Current recipients of state lottery revenues, including the seven public universities in the state whose athletic departments receive a cut, are anxiously awaiting sports betting money, too.
But dividing up sports betting revenue the way the state spreads around lottery and marijuana tax revenue would be a mistake. Instead, the one program that needs the money the most, PERS, should get ALL of it.o
Reducing PERS’ estimated $25 billion unfunded liability (UAL) with sports betting revenue has the advantage of not requiring any changes to future benefits of public employees, something their unions have vigorously resisted.
In Nov. 2017, a PERS UAL Task Force appointed by Governor Brown to review and propose options for making payments toward the PERS UAL listed increased lottery revenue from the expansion of different game platforms or new types of games or retailers as a possible source of funds to help rescue PERS.
The Task Force did not specifically address the use of potential revenue from sports betting. It did, however, say that using lottery revenue to reduce the UAL for schools would likely be permissible under the state constitution as “financing public education.”
So just do it.