The Supreme Court overturned a 26-year-old federal law on Monday that prevented all states except Nevada from allowing bets to be placed on sporting events. The ruling cleared the way for all states to dictate whether they will allow legalized sports gambling within their own borders.
But what does this mean for the NBA and its fans? And should basketball fans even care that they might eventually be able to place pre- and in-game wagers?
Hell yeah they should
First thing’s first: No one has any clue what a basketball world with legalized sports betting will look like. Will you be able to legally bet on how many dribbles James Harden takes before shooting the ball? No idea. Maybe you can guess how many points the Warriors will outscore their opponents by in the third quarter? Probably.
This is uncharted territory the league is entering. Even though the American Gaming Association estimates $150 billion in money placed on illegal bets, legalizing sports gambling opens the road for a widespread, systematic approach to it.
One idea floating around several reports suggests “brick-and-mortar establishments” that fans can walk into and place a wager before or during a game. But it’s 2018. No one wants to get up and out when they could open an app on their phone and place a bet at the touch of a button.
For that reason alone, the mystique of a future that includes legalized sports gambling should pique your interest. The NBA has always been at the forefront of innovation among the other professional sporting leagues, and commissioner Adam Silver has already plotted out ways to reap the financial benefits of a world with wagers placed on the games he runs.
But the NBA has a checkered past with this sort of thing
In 2007, ex-NBA official Tim Donaghy pleaded guilty to two federal charges related to an FBI investigation that revealed he bet on games in which he officiated. He served 15 months in prison, but the fallout around the league lasted longer.
For that reason, the word “integrity” has been spotted in virtually every report linking the NBA to the Supreme Court ruling. Silver is the protector and overseer of a popular sporting product, and as lucrative as sports gambling can and will surely be, it comes with its drawbacks. Players could place bets on the opponent, then throw the game. Another Donaghy fiasco could take place, or even worse, multiple. Money makes things murky, and in a world with legalized sports betting, things could get murky fast if the proper precautions aren’t taken.
That’s why even though the NBA — along with every other pro sports league, as well as the NCAA — initially opposed the Supreme Court’s ruling, Silver has been preparing for a world with legalized sports gambling for months. And at the very top of his priority list, you guessed it: protecting the integrity of the league.
“The integrity of the competition on the playing court is the cornerstone of our league,” Silver wrote in a letter to USA Today. “It is our pact with the fans and with each other, the fundamental reason we exist as a preeminent sporting organization, the very product that we sell. With everything else changing around us, it is the one thing in our league that can never change. We must do everything in our power to protect the actual and perceived integrity of the game.”
What about the players and their salaries?
Well that’s a whole separate discussion because sports gambling revenue will (should) be reflected in the collective bargaining agreement’s Basketball-Related Income breakdown.
This is a crude estimation, but it’s all we have right now. Let’s assume the market for sports gambling mirrors the reported amount spent on illegal gambling: $150 billion. And let’s say Silver successfully negotiates a one percent “integrity,” or “royalty fee,” as the NBA has proposed. (That one percent is a common proposal by sports leagues as a tax for installing quality control for legal sports betting, but it’s unclear if it’s necessary. Let’s assume Silver gets his way for the purposes of this exercise).
That adds an extra $1.5 billion of basketball related income to the bargaining table. Under the current CBA, the players are entitled to half of that, so your favorite player just (probably) got a little bit richer.
But the other layer is that the increase in revenue will also dramatically increase the salary cap, much like the new television deal in 2016 did. Amid pressure from the NBA Players Union, the league elected not to smooth in that additional revenue, creating a wild summer in which nearly every team had cap room. That allowed the 73-win Warriors to sign Kevin Durant and left several teams stuck with massive long-term contracts to average (or worse) players.
Will the league and the NBPA take a different approach when and if gambling revenue enters the league? It remains to be seen.
Again, it’s very, very early to start talking numbers. $4.8 billion were wagered in Nevada in 2017. When more states allow sports gambling, that number only projects to rise.
The only thing that’s certain is that legalizing sports gambling will give more people access to wagering on a basketball game. And when more people have access to something, well, they’re more inclined to use it.
When can we expect to see some legal wagers placed?
No time soon, at least not for a basketball game. New Jersey led the charge against the 1992 legislation, and they plan to be the first state (outside of Nevada, of course) to legally allow sports gambling after the monumental court case.
For now, all we can do is wait to see how this unfolds. Legalized sports gambling will have massive ramifications on the league we all love. That’s something you can bet on.