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Roger I. Abrams

Roger I. Abrams

Posted January 25, 2009 | 11:26 AM (EST)

Betting on America


It is difficult, even for most Republicans, not to be impressed with the opening drive of the Obama administration. It seems as if he has everything in its place and a place for everything. Like a quarterback standing tall in the pocket, he doesn't have "dancing feet," except during the ten Inaugural Balls. Yet, if he is going to attack the nation's ills with the audacity the task requires, President Obama is going to have to try a few Hail Mary passes.

While some of the ills inherited from the former president of the Texas Rangers and the United States seem intractable, many of our economic problems boil down to money. How do we amass more public resources without raising taxes? How do we distribute more credit throughout the economy? How do we enhance the confidence of ordinary folks both in themselves and in their financial prospects, at least enough to go out and buy a new dishwasher? And how do we create jobs that cannot be exported?

Sports can be part of the solution. One of the largest portions of the underground (and untaxed) economy involves sports gambling. No one keeps the books on the Gross Betting Product, but most experts estimate that many billions of dollars are gambled each year on college and professional sports. The National Gaming Impact Study Commission estimated a decade ago that Americans wager as much as $360 billion annually on sporting events. That estimate may have doubled by now. When newspapers print the point spreads on the weekly games, they are providing a public service to the bookmakers. Come March, when college basketball pools reign in the office, the stakes for real sports gamblers are much higher.

How then can the public gain a fair share of the gambling largess? We already know how to do it. We have done it before by simply legalizing, regulating and taxing the vice. We license the sale of alcoholic beverages and cigarettes, truly vile products that kill hundreds of thousands of people every year. I remember when the "numbers racket" was the exclusive domain of the mob. Then we brought that vice in-house by creating state-based lotteries to fund education, among other things. Let the states or the federal government run the sports bet as well or, as seems to work well in Nevada, license private entities to do so and take our own "vig," or commission on the bets. Moralists would certainly be up in arms - although watch to see if they are holding lottery tickets in their hands.

Some observers of our games may be afraid that gambling on sports, especially amateur sports, would create incentives for gamblers to approach pure and innocent athletes with bribes and threats. Putting aside for a second the question whether that goes on now, especially in sports with an easily adjusted point spread, public regulation of sports betting should increase the transparency of the games.

How do we make this happen? Congress would first have to repeal the Professional and Amateur Sports Protection Act that prohibits states from conducting betting on professional and amateur sports. Congressman Barney Frank - who is running the House side of the recovery legislation - has already jumped into the related issue of the regulation of internet gambling. It is time to expand his proposal, cover all sports betting and create some jobs in the process.

The professional sports leagues and the NCAA would certainly oppose legalizing the sports betting enterprise because, they will tell us, there currently is no illegal gambling on their games. Right. And I will give you 2:1 odds on the Tooth Fairy in a no-holds-barred bout against Santa Claus. The only other complainers about this strategy are those who would lose their own exclusive, if illegal, franchise on the underground gambling business. They are unlikely to make their objections public. I wonder whether anyone on K Street in D.C. lobbies for the mob?
And, while we are at it, we should also handle illegal drugs the same way. Legalize, regulate and tax. Just think of all those Mexican drug lords whose lives we will save in the process, not to mention the governmental resources we would not have to spend.

There must be some downside to what seems like an easy win in this sports gambling proposal, but I have not found one. I, for one, would enjoy putting a few bucks down on my favorite teams. When we visited Las Vegas for a convention early in 2004, we stopped by the sports betting parlor - this was important for my Sports Law students' education - and placed a bet on the Red Sox to win both the pennant and the World Series. My winner's check came in the mail that fall.
These approaches, of course, would make only a modest dent in the trillion dollar deficit, but it would show that we were willing to actually pursue reality-based policy. Would this encourage more people to gamble on sports? Perhaps in the short run, but the novelty would wear off. The hard-core betters would stay in the game, although going to the corner franchised sports book would be safer than dealing with one of Tony Soprano's relatives.