With a pandemic, recession, social unrest, and a presidential election dominating the news cycle, you would think there would be little room for much else. And yet, there is some space for sports betting. As of August 2020, 19 states have legalized sports betting since the Supreme Court ruled that sports betting should not be under the purview of the federal government (Murphy v. NCAA, 2018). This Tuesday, there are two states that are voting on ballot initiatives to be added to the list of states that legalize sports betting: Maryland and South Dakota. South Dakota is deciding whether to allow for sports betting within the limits of the town of Deadwood, which houses a casino and is near Mount Rushmore. The net municipal proceeds would go to the Deadwood Historic Restoration and Preservation Fund. In Maryland, the state revenue funds generated are intended to go to fund public education. In both cases, the ballot initiatives bring up the question of whether we should legalize sports betting.
Revenue and Jobs Generation: One of the obvious benefits is the money that sports betting generates. In May 2017, Oxford Economics released a report saying that legalizing sports betting in the United States would add anywhere between $11.6 billion and $14.2 billion to the United States GDP. Oxford Economics also found that it could generate 86,819 jobs directly, as well 129,852 indirect jobs. Keep in mind that would be the case if the entire country legalized sports betting. The state of Maryland's legislative analyst estimated that a 20 percent table games tax rate would translate into $18.2 million of tax revenue for the state of Maryland. While there is greater economic potential in the private sector, the Tax Policy Center warns of the limits of counting on sports betting being a cash-cow, especially given how sports betting operates and is taxed (Auxier, 2019).
Issues of Underground Markets and Exploitation: Whether it has been marijuana, prostitution, or human organ sales, there is a major concern of what happens when you drive something to the underground market. For one, the legal economy is deprived of the revenue generated from that commerce. This is important, especially considering that sports betting is a $155 billion market [in 2017 dollars], 97 percent of which was generated illegally in underground markets, as of 2017 (Reason Foundation). It is clear that sports betting, regardless of its legal status, is a desired trade. Second, underground markets lead to abuse of power and empower criminals. We see this when pimps abuse their prostitutes, drug lords are able to carry out unspeakable acts, or when a dysfunctional immigration that keeps workers undocumented, which not only keeps their potential in the labor down, but also leaves them open to exploitation in the workplace. In the case of sports betting, keeping sports betting illegal empowers bookies. Keeping sports betting illegal drives people into the arms of the criminal underworld.
Is Gambling Addiction a Concern with Legalization?: This is one of the main concerns of those who are against sports betting. Their theory is that if we legalize sports betting, this will increasing the amount of gambling addiction. A 2016 study from the National Institutes from Health sheds some light on the matter (Welte et al., 2016). The NIH study looks to see if an increased amount of gambling legalization and availability of gambling options increased the rates of gambling addiction and problem gambling. Interestingly enough, these rates remained stable with increased legalization. The best explanation for that is because the ubiquitous nature of the black market makes gambling easily accessible. This is yet another reason to legalize. Instead of stigmatizing gambling addictions related to sports betting, legalization would bring it to light in a way that would help those who need it. Making sports betting doesn't make the gambling problems go away. It sweeps them under the rug while adding on other problems that come with the underground markets.
Conclusion: It makes very little to no sense to keep sports betting illegal. As has already been proven, people will find a way to partake if they want, whether it is by going underground or crossing state lines to a place where it is already legal. Legalizing sports betting is shown not to increase gambling rates, and keeping it illegal is not shown to make gambling addiction go away. Even better, legalizing sports betting does not make game fixing more likely (Morris and Bentley, 2017). Legalizing sports betting helps to keep power away from those operating activities while generating revenue for both the government and the economy at large. If you live in Maryland or South Dakota, please vote "yes" to legalize sports betting.
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