On May 14th the Supreme Court voted 6-3 to strike down the Professional and Amateur Sports Protection Act, which barred state-authorized sports betting (with the notable exception of Nevada). As a professional Actuary, and an enormous sports fan, I found this news to be very exciting. This has the potential to combine my professional work with my biggest personal hobby and may be a future opportunity for many actuaries and sports fans. What follows should not be taken as fact, as there are many variables to be sorted out.
As of May 17, 2018, sports gambling is still illegal. It is currently expected that regulations will be imposed state by state. I have heard that sports gambling may be legal in New Jersey as soon as June 1st, with Mississippi to soon follow and five or six more states in the near future. Within five years it is expected that sports gambling may be legal in as many as 30 states (per Gabe Feldman, Director of Sports Law at Tulane, on the “Against All Odds with Cousin Sal” podcast). If you wish to check your state’s gambling status, I would suggest checking out this ESPN link. Notably, if you live in Utah, the state’s anti-gambling stance is written in its constitution.
While I find this news very exciting, I have a ton of questions. Will there be upcoming arbitration that could possibly reverse this decision? If gambling is legal, what sort of tax impact will this have on an individual at the state and federal level? How hard will the big leagues, such as the NBA and NFL, push to regulate or receive the benefits of gambling? Will I be able to make bets from my smart phone at NBA games? Or will I need to go to some sort of regulated sports book prior to the game to place bets?
In recent years, the field of sports analytics has grown exponentially, and I would expect this law change to spur even more rapid growth. Illegal sports bets are estimated to total billions of dollars annually (some estimates are even in the hundreds of billions). A large portion of this is likely made on offshore betting sites, where the more you win, the less likely you are to receive your payout. I think adding regulations can only improve the user experience and open up tons of potential revenue streams. While most information is still unknown, I am very excited for what the future holds.
