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End the War on Gambling

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March Madness has finally ended, albeit in April. However, the federal prohibition against gambling on the basketball games continues.

On March 11 — Selection Sunday — the National Collegiate Athletic Association (NCAA) announced which 68 teams qualified for the NCAA Division I Men’s Basketball Tournament. Thirty-two teams get automatic spots to play because they are conference tournament champions. The other 36 teams were chosen to fill “at-large berths” to compete for the honor of being the national champion. The NCAA divides the teams into four regions (East, South, Midwest, and West), ranks them 1–16 within their regions, and organizes them into a single-elimination bracket.

On March 13 and 14, the “First Four” games were played between the four lowest-ranked at-large and conference-champion teams to eliminate four teams. On March 15 and 16, 64 teams competed in first-round games. On March 17 and 18, 32 teams competed in second-round games. On March 22 and March 23, “Sweet Sixteen” teams played eight regional semifinal games. On March 24 and March 25, “Elite 8” teams played four regional finals. On March 31, two games were played by the “Final Four” teams. And on April 2, the last two teams played each other in San Antonio for the national title.

Every year during this time, millions of Americans gamble in March Madness betting pools. There is just one problem: gambling on the NCAA tournament is generally illegal.

According to the American Gaming Association (a trade group representing the $240 billion U.S. casino industry),

In 2018 the AGA commissioned a legal analysis of real-money sports “pool” betting. Among other types of bets, pool bets can include casual sports bets between friends, certain types of fantasy leagues, certain types of office pools between colleagues — and yes, competitions based on March Madness brackets.

Even when a) a bet transpires among friends, b) nobody other than the bettors are involved in the bet, and c) nobody takes any kind of fee or gets any benefit related to the activity, such pool betting is generally illegal in 37 of the 50 states.

The remaining 13 states either have some exemptions for friendly wagers in which no one profits, or allow for individual counties to develop ordinances to govern pool betting.

The analysis found no states that allow sports pool betting — including stake-holding, bookmaking, or earning any other benefit — to take place as a for-profit business in the absence of appropriate licensure.

Yet, according to the AGA, “Americans illegally bet at least $150 billion annually on sports.” Ten percent of American adults (nearly 24 million people) “reported spending nearly $3 billion in the past year on college basketball pools alone.” Of the more than $10 billion that was wagered on the recent NCAA tournament, only about $300 million (3 percent) was “wagered legally through Nevada sports books.”

The NCAA “opposes all forms of legal and illegal sports wagering, which has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community.” The NCAA “has had bylaws restricting sports wagering for many years because leaders in college sports believe sports wagering not only threatens the integrity of the game but also is an entry point into other behaviors that may compromise student-athlete health and well-being.” The NCAA has a campaign called “Don’t Bet on It” that “supports the organization’s policy of prohibiting student-athletes, athletics department staff members, conference office staff and its own employees from engaging in sports wagering.” Every four years since 2004, the NCAA has conducted studies on student-athlete gambling behavior. In spite of the NCAA prohibition on gambling, the most recent study found that

  • Fifty-five percent of men in the 2016 study reported gambling for money within the past year.
  • In 2016, 24 percent of men reported violating NCAA bylaws within the previous year by wagering on sports for money.
  • Student-athlete gambling debts are a well-being concern, but also a worry for potential vulnerability to outside gambling influences.

On the federal level, the Professional and Amateur Sports Protection Act (PASPA) of 1992 prohibits state-sponsored sports betting in all but a handful of states. Thankfully, this law is being challenged by the state of New Jersey. The Supreme Court heard oral arguments on December 4 of last year in the case of Murphy v. NCAA, formerly referred to as Christie v. NCAA, but renamed after Phil Murphy became the new governor of New Jersey. The plaintiff is arguing that the PASPA is unconstitutional. The NCAA is supported by the Trump administration and the other major sports leagues.

So state governments, sports leagues, and the federal government all oppose the freedom of Americans to gamble on sports, that is, to spend their own money as they choose, except in limited instances under state supervision.

But, of course, it’s not just sports betting that is illegal in most states. The federal and state governments have many laws that prohibit or restrict gambling. Basically, most forms of gambling are illegal except at Indian casinos, state-approved casinos, or horse-racing tracks unless you are playing a state lottery or are on a cruise ship in international waters.

And you thought Americans lived in a free society?

Even though gambling might be addictive, financially ruinous, risky, wasteful, immoral, a vice, a sin, a bad habit, corrupting, or foolish — and generally has horrible odds of winning —

  • A society that outlaws sports gambling is not a truly free society.
  • A society that outlaws gambling except at state-approved casinos is not a truly free society.
  • A society that permits state lotteries but not private lotteries is not a truly free society.
  • A society that fines or jails people for gambling is not a truly free society.

And even though the United States has freedom of speech, religion, and the press, and is relatively free when compared with most other countries —

  • A society that legislates morality is not a truly free society.
  • A society that monitors people’s recreational activity is not a truly free society.
  • A society that forbids people to spend their own money as they see fit is not a truly free society.
  • A society that prohibits people from engaging in peaceful, voluntary, consensual activity is not a truly free society.

In a genuinely free society (as opposed to a relatively free society), people have the freedom to gamble any amount of money on sporting events, horse races, casino games, pari-mutuel pools, lotteries, prediction markets, private poker or blackjack games, and whether it will rain tomorrow.

One can consistently be opposed to gambling and laws against gambling.

As former Republican congressman and presidential candidate Ron Paul has well said, “Those with moral objections to gambling have the right to try to persuade their fellow citizens to not gamble. What they do not have the right to do is use government force to stop people from engaging in activities, like gambling, that do not involve force or fraud.”

Originally published by the Future of Freedom Foundation. 

Laurence M. Vance is an Associated Scholar of the Mises Institute, columnist and policy adviser for the Future of Freedom Foundation, and a columnist, blogger, and book reviewer at LewRockwell.com. He is also the author of Gun Control and the Second AmendmentThe War on Drugs Is a War on Freedom, and War, Empire and the Military: Essays on the Follies of War and U.S. Foreign Policy. His newest books are Free Trade or Protectionism? and The Free Society. Visit his website: www.vancepublications.com.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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