March Madness: With gambling legal in eight states, who really wins?

March means springtime, but also breathless headlines of Cinderellas, busted brackets and buzzer beaters.

This year, it’ll also include talk of “sharps,” “handles” and “point spreads,” as millions more Americans are able to openly wager for the first time on March Madness – the NCAA men’s basketball tournament. That’s thanks to the U.S. Supreme Court ruling^[1] that allowed states to legalize sports betting.

As a sports journalism professor^[2], I’ve been following the evolution of sports gambling for several years – back to a time when it was portrayed as a revolutionary and scary moment for fans and teams alike.

With millions more Americans gambling legally, it’s no longer scary, but that doesn’t mean some officials and observers aren’t concerned about perils in its rapid growth.

The legal bandwagon

Most tournament gambling is still illegal, but that’s changing quickly.

According to a survey conducted by Morning Consult for the American Gaming Association, 47 million adults in the United State will wager US$8.5 billion^[3] on March Madness this year, including 4.1 million who will do so for the first time at a casino sportsbook or online using a legal app. The rest of the bets, including the tens of millions made in office pools around the country, will be illegal.

Yes, you heard that right. Your office pool is most likely illegal^[4].

Last year, the American Gaming Association estimated that $10 billion was at stake^[5], but the calculation method has since changed. We do know that 97 percent of the action was illegal, including office pools. Nevada accounted for the legal betting.

Now, as is the case in situations with state-by-state legislation, the rules vary^[6] from place to place.

Early adopter New Jersey has both casinos and online apps ready to take bets. Pennsylvania, meanwhile, now has several brick-and-mortar sportsbooks, but legal online betting is still a few months away. With just six betting locations open last month, Pennsylvania’s combined handle – the total of all sports wagering – was about $31.5 million^[7], generating tax revenue of about $700,000. Most of that went to the state.

It’s early, but “we know it’ll be busy and there’ll be a bump” in action this month because of March Madness, Doug Harbach, a spokesman for the Pennsylvania Gaming Control Board told me in an interview. Two new locations for sports betting just opened, a sign of how quickly gambling is spreading.

Meanwhile, not much can stop bettors from putting money down on illegal online gambling sites outside the United States, and the American Gaming Association estimates^[8] 5.2 million Americans will do exactly that over the next few weeks. It’s the way many gamblers have put money down in previous years. Though illegal, enforcement has been light.

Addiction and integrity

Anti-gambling advocates say what hasn’t changed is the long-term impact on addiction, which is likely to rise in years to come as legal sports betting becomes more widespread.

Asked whether states adopting legalized sports wagering are doing enough to also combat gambling addiction, Keith Whyte, executive director of the National Council on Problem Gambling^[10], said: “Not really.” He also noted that, while gambling addiction doesn’t seem to have spiked in the past year, the negative effects of sports gambling will show up down the road.

Some states, like New Jersey, adopted the council’s recommendations^[11] for minimizing harm from legal gambling, such as dedicated funds to prevent and treat addition and establishing a minimum age, while most have only enacted a few safeguards.

For its part, the NCAA has come out against^[12] legalized sports gambling.

“Sports wagering is going to have a dramatic impact on everything we do in college sports,” NCAA President Mark Emmert said at the group’s national convention in January^[13]. “It’s going to threaten the integrity of college sports in many ways unless we are willing to act boldly and strongly.”

Gamblers win

But there’s little the NCAA can do about it. More legal sports betting is on its way – though the office pool will presumably still be a no-no.

Joni Comstock, senior vice president of championships at the NCAA, estimates^[14] that 30 states could have legal gambling within a couple of years.

As for who’s the favorite of gamblers and the more than 40 million Americans who were expected to fill out brackets, 29 percent apparently picked Duke to win it all. Nobody else was even close.

References

1. ^{^} U.S. Supreme Court ruling (www.nytimes.com)
2. ^{^} sports journalism professor (bellisario.psu.edu)
3. ^{^} 47 million adults in the United State will wager US$8.5 billion (www.americangaming.org)
4. ^{^} Your office pool is most likely illegal (www.huffingtonpost.com)
5. ^{^} estimated that $10 billion was at stake (www.americangaming.org)
6. ^{^} the rules vary (www.actionnetwork.com)
7. ^{^} was about $31.5 million (gamingcontrolboard.pa.gov)
8. ^{^} estimates (pictures.reuters.com)
9. ^{^} AP Photo/David J. Phillip (www.apimages.com)
10. ^{^} National Council on Problem Gambling (www.ncpgambling.org)
11. ^{^} council’s recommendations (www.ncpgambling.org)
12. ^{^} has come out against (www.apnews.com)
13. ^{^} at the group’s national convention in January (apnews.com)
14. ^{^} estimates (www.apnews.com)