Opportunity and risk as sports betting takes off in the USA

The repeal in 2018 of the Professional and Amateur Sports Protection Act of 1992 (PASPA) has opened up the possibility of legal sports betting across the US, creating a potential gold rush as the betting industry along with sports leagues and clubs and other players in the market look to take advantage of the potentially significant income streams on offer. At the same time, an increase in gambling, even though legal, raises the possibility of harm both to consumers and the integrity of the sports being wagered on.

How to manage the risks and opportunities of sports betting in the US market was the subject of debate at a round table discussion held on Wednesday afternoon as part of SIGA Week 2021, organised by the Sport Integrity Global Alliance (SIGA) the world’s “largest coalition in the field of sports governance and integrity”, which seeks to “bring about meaningful reforms and enhance the integrity of all sports”, according to the organisation, of which this newspaper is a media partner. The subject of sport betting in the US was particularly relevant given that SIGA America launched its high-level Advisory Board today.

The round table on US sports betting was chaired by SIGA Global CEO Emanuel Medeiros, who was joined by Matt Zarb-Cousin, co-founder and director of external affairs for Gamban, an online gambling blocker; Marc Riccio, CEO of USA Lacrosse; Oliver Jaberg, Deputy Chief Legal & Compliance Officer / Director of Integrity & Anti-Doping at FIFA; and Marquest Meeks, Senior Counsel, Sports Betting and Compliance Director, State Government Relations at MLB.

No point "keeping our heads in the sand"

In what was a wide-ranging discussion, several key issues were raised, one of which was the approach to be taken by leagues and clubs to the new legal situation.

Marquest Meeks from the MLB stressed that the original approach of the MLB, prior to the repeal of PASPA was that, “any time you put gambling and money around something there is always the increased risk for corruption and so the initial stance of baseball was no sports betting, it shouldn’t be legalised.”

However in the face of the Supreme Court decision the league decided it was better not to “put our heads in the sand” and has instead sought to become involved in how laws are drafted and regulations are put in place “to help protect the integrity of our game.”

Meeks said one of their approaches is to go state to state advocating for what the MLB calls its “integrity toolkit”, which are the measures they believe should be in laws and regulations to help protect the integrity of their sport.

Mark Riccio, CEO of USA Lacrosse was clear that the opening up of sports betting offered both opportunity, in terms of the possible revenues, but also the potential of reputational risk. “For the marketers, revenue generators and fan engagement professionals it’s a tremendous opportunity because it drives fan engagement and revenues. For Chief Operating Officers it’s a mixed bag as a great opportunity but also representing reputational risk. For commissioners, CEOs and owners it’s also a conflicting story.”

Riccio also stressed the fact that gambling regulation is now being done state by state across the US can be an issue, with the need to ensure the regulation promotes integrity in each state. In particular enforcement is done at a state by state level, meaning there can be differences in the approach across the country.

Meeks chimed in to say that from the perspective of a major league such as MLB, “the most challenging aspect is the state by state nature of it all.” He explained that often it’s possible to get the ‘toolkit’ and safeguards implemented in one state, only to have to “start from scratch” in the next.

Legalising and regulating is the way forward

According to FIFA’s Oliver Jaberg, the experience of football's world governing body is that “legalising and regulating betting is the way forward”, because illegal betting, which is closely linked to match fixing and manipulation creates higher potential risk of undermining the integrity of sport.

Even with legal gambling however, the fight against match manipulation is vital Jaberg explained, with FIFA taking a three pillar approach:

1. Educating and raising awareness with players and officials

2. Engaging in cooperation with different stakeholders: betting companies, law enforcement and international organisations and private organisations such as SIGA

3. Going after wrongdoers, not just from within the remit of FIFA, but also with prosecution by law judicial systems in order to establish a deterrent effect.

In terms of the approach at MLB, Meeks explained they have a zero tolerance approach with nobody who works in the sport allowed to bet on bat and ball games, “not softball, not Olympic baseball, nothing.”

Risks of gambling to young men

Matt Zarb-Cousin, of Gamban, stressed the dangers of gambling addiction, in particular towards young men, and said the consumer perspective was extremely important as sports betting expands in the US.

According to the executive, betting companies may seek to use sports betting as a “bridge” to initially attract gamblers and then push them into higher frequency gambling behaviour, on such products as slots, which make up half of all online gambling profit. Zarb-Cousin argued that it is important that such cross-selling of gambling products be regulated to avoid the industry pushing people into what can be more dangerous areas.

Another area of risk identified by the co-founder of Gamban, whose internet blocking products are used by 90,000 people mostly in the UK, with some in the US, is the quantity of bets offered. An example he gave is that of the time of the first throw-in which is far easier to fix than the outcome of a match. Zarb-Cousin’s recommendation is that there are licensing agreements for bookmakers from the regulators restricting which bets can be offered.

In summing up, Zarb-Cousin’s final word was that he hoped US Sports Betting would learn from the mistakes made in the UK market, a sentiment that was echoed by the whole panel.

Riccio added that the educational aspect was highly important, while FIFA’s Jaberg noted that “without integrity, sport is dead”. Marquest Meek concluded that “education and collaboration are the two things we need” in the fight for sport integrity in the face of the liberalisation of US Sports Betting.