Why gambling rules should be national

By Felix Salmon
February 4, 2013

Jim Surowiecki’s column about sports betting has appeared at roughly the same time as two important news reports. Firstly there’s a big Lucy Kellaway piece about traders in the City of London who become addicted to sports betting, with disastrous consequences for their careers and marriages. And secondly there’s the results of a 19-month international investigation, uncovering match-fixing in a mind-boggling 680 high-level soccer matches, including World Cup and European Cup qualifiers as well as a Champions League match in the UK.

Surowiecki paints sports betting as being an issue of states’ rights: New Jersey voters have spoken, and there’s no good reason why they shouldn’t have the same rights as residents of Nevada, Delaware, Oregon, and Montana. In those states, sports betting is legal, having been grandfathered in under a 1992 federal law making it illegal in the rest of the country. Sports betting also thrives illegally, with varying degrees of local tolerance.

There’s no doubt that the current jurisprudence surrounding sports betting (or any kind of betting, for that matter) is messy. But even if the 1992 law was declared unconstitutional, that wouldn’t much clean it up. Surowiecki says that allowing sports betting in one state would have “no obvious negative effects on other states or on the national economy”, and that “gambling has typically been a state issue, not a federal one” — but I don’t think that’s true any more, and it almost certainly won’t be true in future.

While the New Jersey law only allows sports betting in Atlantic City casinos and the state’s four horse racing tracks, for instance, it also allows people to place their bets at those venues over the internet. If the law is ever declared constitutional, the chances have to be high that pretty soon everybody in the US will have access to web apps offering spread betting — the kind of highly-addictive product that got those UK traders into deep trouble, and which promised huge riches to the Asian crime syndicate in the soccer scandal. Good luck to anybody trying to keep all gambling to New Jersey residents once that happens.

I’m an occasional gambler myself, although not on sports, and I’d probably avail myself of the opportunity to indulge in some spread betting were it easily available online for things like election outcomes or Oscar winners or the chances of the eurozone breaking up. But I don’t kid myself that such activity, once legalized, can or should be confined to individual states or individual casinos within states.

All of which is to say that we should really start a grown-up discussion about gambling, whether it should be legal, and whether paternalism can or should override the freedom to indulge in such activity. We should be open about the fact that if we legalize gambling, then the incidence of harmful gambling addiction will rise, as will the incidence of people trying to game sporting matches. And we should also be open about the fact that gambling will still be a lot less societally harmful than, say, gun ownership, or cigarettes, or alcohol, and that there’s no particularly compelling reason to be so much more prohibitive on the gambling front than we are elsewhere.

But it seems to me silly, in the online era, to try to confine legal gambling to certain physical locations, be they states or casinos within states. And it also seems silly to try to confine betting to certain things (sports) and not others (like, say, the Academy awards). If you’re going to allow it, then allow it. Make sure everybody offering it is clearly regulated and taxed — at the federal level, to avoid a regulatory race to the bottom. And make a clear determination that if you’re mature enough to be allowed to buy a gun, then you should probably be allowed to be able to bet on the Super Bowl, too.


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Wait a minute – sports betting is illegal in the USA? Here in NZ it’s a large and thriving industry and isn’t at all seedy (at least not to my eyes). It’s very common for people to place bets on sports games, particularly in workplace syndicates and the like. I can’t imagine having to talk to a “bookie” to place a bet when I just just use the electronic kyosk at the local pub.

Posted by MikeGayner | Report as abusive

I find sports the only thing worth betting on. It makes otherwise boring games more interesting – it’s a cheap way of buying emotional involvement. I do it during large competitions, like the World Cup or Euros.

Posted by BarryKelly | Report as abusive

“New Jersey voters have spoken”

Uh, no, we haven’t. We were asked a hypothetical without any details a while back–no indications of cost, no indications of expected revenues, no indication of anything except a pie-in-the-sky. (To be accurately rude about it, it was before the Christie Administration demonstrated its ability to frack up Atlantic City casino management in a manner to make Donald Trump and his multiple bankruptcies appear capable).

AC remains (to borrow a phrase from a wrongly-terminated Janey Montgomery Scott lo those decades ago) “a drab and dreary place in the Winter time.” Would being able to lose money betting on Jersey/B make it more appealing?

NJ voters thought they were given a free option: you can vote for this because there are three things that will keep it from ever becoming a reality. (It’s the closest thing to voting for Romney we’ve had.) The result so far is that our tax monies are being spent on multiple lawsuits trying to make that myth binding–a consequence supporters of the initiative never mentioned.

NJ voters supported a pipe dream–if it was dropped into our laps. What we got so far has been some (other-type-of-pipe-using?) legal bills and Yet Another Bankrupt Buidling in AC (to go with the Meadowlands Shopping Center).

Posted by klhoughton | Report as abusive

Gambling is a great states rights issue… along with about 1000 others. 200 years ago a small subset of the American population (male white land owners) were the most free people ever to live on earth before or since.

When the Union of states was conceived few wanted in. Why should they cede home rule to a far away majority. They agreed on so few things that should or should not be universally legal or illegal that they could actually write a list on a few pages (the bill of rights.)

Everything else was to be left to the states to decide for themselves. That is the only reason small states ever decided to freely offer their sovereignty to the union. They rightly got over representation in the senate, the electoral college, and constitutional amendment procedures. Without those small protections they never would have joined the union at all.

There are places it is safe and prudent to drive 85, and some places not.
There are places it makes lots of sense to carry a loaded gun and lots of places it doesn’t.
If a local population shares a nearly universal view that gambling is a dangerous addiction or harmless pastime there is absolutely no reason for it to be legal in one state and outlawed in another.

Posted by y2kurtus | Report as abusive

This is a very vague article, Mr Salmon. The headline is that gambling rules should be national, but the copy argues that gambling is basically impossible to govern and therefore not to bother trying.

The constitutionality and legal framework for bans on gambling in a state are not relevant to whether gambling laws should be nationally uniform.

There is no right to gamble, and restricting it does not infringe on any other constitutional rights. The residents of a state should therefore be free to choose whether to permit it in their state or not. Thus I would contradict the headline that it should be uniform throughout the union.

As to whether gambling can be policed, if you believe a national law is feasible, then so is a state law. It can be policed or it can’t. And the internet is very amenable to policing. Does it seem daft that you could cross the border, log in and gamble on some non-geographic website whilst being unable to do so on this side of the border? Yes, but that is state law at work.

The root of your argument is that state variation is silly. That is not a sensible argument in a federal union.

Posted by PhilH | Report as abusive

@y2kurtus – I think that is well expressed.

I’ll also counter Felix’s view that it’s “silly, in the online era, to try to confine legal gambling to certain physical locations, be they states or casinos within states”. There’s a decent regulatory argument to requiring that people must travel to a casino to gamble rather than doing so from home whenever they feel like it. I don’t have any issue with a state saying, “Yes, we’ll allow gambling, but we’re going to place some limits on just how convenient it is to gamble.”

Posted by realist50 | Report as abusive