Policy

Court Briefing Blasts Sports Leagues' Hypocritical Stance Against Legalized Gambling

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New Jersey is trying a new tactic in the fight to legalize sports betting in the state: pointing to professional sports leagues' partnerships with daily fantasy sports websites. The state argues that daily fantasy is in fact gambling and that this makes leagues' stance against legalized sports betting hypocritical.

Daily fantasy sports are online games in which participants wager real money on a collection of individual athletes' performances. The leagues and daily fantasy websites have routinely claimed that, because these games are skill-based and compile the outcomes of multiple events rather than single games, they are not technically "gambling." That claim is highly disputed, though, and many see this verbiage as merely an attempt to avoid being called hypocrites.

The leagues also claim that legalized gambling could threaten the integrity of their games, but this is also undermined by their partnerships with daily fantasy sites.

In a filing made to the 3rd U.S. Circuit Court of Appeals Wednesday, the New Jersey Thoroughbred Horsemen's Association, which wants to bring sports betting to New Jersey's Monmouth Park Racetrack, invokes the legal concept of "unclean hands," which calls out the partnerships between the National Basketball Association (NBA), the National Hockey League (NHL), and Major League Baseball (MLB) and daily fantasy sports sites FanDuel and DraftKings. The briefing doesn't pull any punches:

The Leagues secured an injunction from the District Court by hypocritically pretending to be guardians of the integrity of their games and their reputations. The record shows this claim is utter nonsense. In reality, the Leagues are nothing more than the NJTHA's business competitors. They are seeking (so far very successfully) to use the federal judicial machinery to preserve an unfair competitive advantage in the multi-billion dollar market for sports betting dollars. Using PASPA as their hammer, the leagues have fenced the NJTHA out of the sports betting market. Through this litigation, the Leagues are also intimidating others who may want to compete for a share of the same sports betting dollars that the Leagues seek to dominate, if not monopolize, for themselves.

The Leagues' contention that the 2014 Law threatens the integrity of their games directly conflicts with their full embrace of fantasy sports betting. Fantasy sports betting, because the winning bet is determined on the basis of the statistical point performances of individual players, offers a myriad of manipulative schemes by which players and bettors can "fix" the outcome of a fantasy bet, without even being noticed or without affecting the ultimate outcome or score of the game. Fantasy sports betting is so ubiquitous that the "point shaving" scandals that have long plagued basketball and football may pale in comparison.

 

Despite the ease in which players can alter their performances to "fix" who will win a fantasy bet, the Leagues are fully invested in fantasy sports betting businesses. They're "all in." The "gold rush" has begun.

The Leagues' lust for as much of the sports betting dollars as they can corner for themselves, by faking irreparable injury, is not victimless. It devastates Monmouth Park, its many employees, and the public.

In other words, leagues want to maintain their government-enforced monopoly over sports gambling action so they can continue raking in a share of the revenue. They fear being cut out of the pie by outside sportsbooks and casinos, so they're trying to keep gambling in those places banned. It's crony capitalism in its purest form. 

The state of New Jersey has been defeated in court numerous times in its efforts to legalize gambling over the past two decades—the most recent loss coming in November. The 3rd U.S. Circuit Court of Appeals will hear arguments in the case later this year.