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Supreme Court’s Decision on Sports Gambling – Effects on High School Games

By Lee Green, J.D. on September 11, 2018 hst Print

The Issue

The May 14, 2018, decision by the U.S. Supreme Court in Murphy, Governor of New Jersey, v. National Collegiate Athletic Association, a ruling which struck down as unconstitutional certain components of the Professional and Amateur Sports Protection Act (PASPA) – a 1992 federal law that barred most states (all but those grandfathered-in by PASPA) from allowing sports gambling – opens the door to the enactment by states of legislation authorizing betting on sports events in a wide variety of forums and contexts.

The high court’s decision will almost certainly lead to the enactment by numerous states of laws authorizing gambling on professional sports contests and college sports events through the placement of bets at casino sportsbooks, race tracks, off-track betting (OTB) parlors, and – eventually – online methodologies such as websites, social media tools and mobile apps.

Of concern as one possible outcome of the Murphy case is the possibility of legalized wagering on high school athletics and youth sports events such as interscholastic football and basketball games, AAU basketball tournaments, 7-on-7 football competitions, Little League Baseball games, Pop Warner football contests and other similar sports activities.

The History of Youth Sports Gaming

Although widespread gambling on high school and youth sports might seem like an unlikely possibility because of the misconception that there is a relative lack of interest by bettors in school and youth contests as compared to professional and collegiate athletics, for years illegal gaming has taken place involving youth sports competitions.

For instance, offshore, internet-based, illegal gaming sites have for more than 20 years set betting lines and accepted wagers on high profile interscholastic football and basketball games, in particular during state playoffs, and on high visibility national youth sports events such as elite AAU basketball tournaments, the Little League World Series, Pop Warner Football playoffs and Biddy Basketball championships.

One such gaming website – Costa Rica-based 5Dimes – sets odds and accepts bets on prominent high school football games such as the Texas state high school playoffs, with its founder, Tony Williams, arguing that gambling on high school sports is justified by the logistics of supply and demand. “The customers who bet the games don’t have a problem with morality. Walk to any street corner in the United Kingdom. You can bet on under-16-year-old soccer events, boys or girls. Any match, any amount. What is the difference betting on 15-or-16-year-old girls playing soccer or 17-and-18-year old boys playing American football?”

Illegal gambling on youth sports has also taken the form revealed by a 2012 investigative report by ESPN’s Outside the Lines into widespread betting on games played in the South Florida Youth Football League, an organization for players from ages five to 15, following which nine youth football coaches were charged in Broward County with felonies. An undercover reporter filmed bets being placed and money changing hands between bettors and bookies in the stands at games and in a barbershop functioning as an OTB parlor with a separate betting window for those wishing to place bets on the youth football games. The typical regular season game would draw bets totaling approximately $20,000 and a league championship game attracted total bets exceeding $100,000.

Murphy v. NCAA

In 1991, Congressional hearings were held at which a wide range of representatives of professional and college sports leagues and governing bodies testified regarding the potential for corruption and game-fixing if a framework of authorized gambling on athletic events was to be allowed across the United States, along with the presentation of evidence by mental health and addiction specialists as to the threat posed to bettors by widespread legalized sports gaming.

The hearings led to the enactment of PASPA, also known as the Bradley Act after the legislation’s original sponsor – U.S. Senator from New Jersey, NBA Hall-of-Famer, Air Force veteran, Rhodes Scholar, 1964 Olympic Gold Medalist, and 1965 NCAA Player of the Year – Bill Bradley.

With the exception of state laws authorizing gambling on horse races, dog races and jai alai, PASPA prohibited the enactment by states of legislation permitting any other type of sports gambling. However, four states had pre-existing sports gaming laws that were grandfathered-in and thus exempted from the coverage of PASPA. Nevada had since 1949 had licensed sports betting through casino sportsbooks and Delaware, Montana and Oregon operated statewide sports lotteries that functioned as parlay wagers for bettors.

The enactment of PASPA and its implementation on January 1, 2003, was lobbied for and supported by all major and minor professional sports leagues in the United States, including the NFL, NBA, NHL and MLB, along with amateur athletics governing bodies such as the NCAA, the NAIA, the NFHS and state associations.

In 2009, as part of a broader effort to rejuvenate the state’s struggling gaming economy, New Jersey filed a lawsuit challenging the constitutionality of PASPA, arguing that the Tenth Amendment to the U.S. Constitution reserves to the states all rights not explicitly granted to the federal government, including the regulation of gambling. In other words, New Jersey asserted that the “anti-commandeering doctrine” principle incorporated into the Tenth Amendment by the founding fathers barred the federal government from seizing away from or interfering in the enactment by states of legislation governing gambling. Oral arguments in the suit took place before the Supreme Court on December 4, 2017, and the Court’s 7-2 decision, issued on May 14, 2018, in favor of New Jersey, was based on states’ rights and federalism principles.

It is important to note that the high court’s ruling did not automatically legalize sports gambling nationwide; the decision merely made it possible for state legislatures to enact laws permitting and regulating sports gaming in their jurisdictions.

Reaction to the Murphy Ruling

PASPA’s original sponsor, Bill Bradley, disagreed with the Supreme Court’s decision, in large part because of his concern about the case’s potential impact on high school and youth sports. In a May 16, 2018, interview with NPR, Bradley stated, “I regret the ruling. I think the Court ignored the impact that the ruling will have on sports in America and the values you learn from sports. I mean, they’ve turned every basketball player, football player and baseball player into a roulette chip. And that doesn’t mean pros only. Because now you can bet on college. You could even bet on high school. You could even bet on AAU, 14-year-olds playing in the finals of the AAU. And the only winners here are casinos, in my opinion.”

Bradley continued, “I think the game will be corrupted. Do you really want to go to your son’s high school basketball or football game and see people in the crowd who are betting, who are not rooting for your child to win or lose, but are betting on a spread?”

Bradley’s concerns were echoed by Bob Gardner, NFHS executive director at the time the Supreme Court issued the Murphy decision in May, who in a statement issued by the NFHS stated, “I am concerned with this Court decision and where it may lead. Our past contains instances of wagering on high school games illegally. If that now becomes legal, does the pressure on our coaches and student- athletes grow? Maintaining the integrity of all sports is critical to the system at every level. If we think the high schools are immune to this, we are not seeing clearly. We ask that states do not include wagering on high school athletic contests in any sport as part of any legislation going forward.”

Going Forward

With nearly 20,000 high schools and tens of thousands of youth sports teams in the United States at scale, there could be a wide range of betting taking place on scholastic and youth athletics if state legislatures fail to carefully craft gaming regulations to exclude all amateur athletic events below the college level. Just as with professional and collegiate sports, state laws permitting betting on school and youth athletic events would open the door to attempted corruption or game-fixing.

In fact, high school and youth sports athletes might be at the highest risk because there are no paychecks or scholarships – if a gambler offers even small inducements of a few thousand dollars to an athlete (or to an athlete’s parents) with the proviso that the athlete doesn’t need to lose the game, but rather just avoid covering the point spread, some albeit small percentage of athletes (or parents) will likely engage in the illegal and unethical behavior. Or the payment by the gambler may be simply for inside information regarding the eligibility or health status of other players on a team, information that in most cases cannot be revealed by schools or sports organizations because of privacy restrictions imposed by federal laws such as FERPA or HIPAA, or equivalent pieces of state privacy legislation.

Furthermore, another of the challenges facing high school and youth sports is that, because of the decentralized governance currently in place – state associations over interscholastic athletics and hundreds of governing bodies overseeing youth sports nationwide – there is no logistically practical means of developing integrity and corruption monitoring strategies like those which professional sports leagues and the NCAA will have the resources and centralized control to implement.

In addition, legalized gambling on high school and youth sports might increase the exposure of young athletes and young people in general to other dangers of gambling, including addiction and financial ruin. A 2016 NCAA study of 23,000 college student-athletes revealed 55 percent of men reported gambling for money; 24 percent reported violating NCAA rules by wagering on sports for money; and 11 percent of Division I football players and five percent of Division I basketball players reported betting on a game not involving their team. If similar percentages of high school and youth sports participants were incentivized by the legalization of betting on scholastic and youth athletics to attempt to bypass minimum age requirements for gambling, American society might be confronted by an unprecedented health-care crisis with regard to gambling addiction among young people.

Reliance on State Legislatures

The key, therefore, in the shadow of the Murphy ruling, to safeguarding high school and youth sports programs and athletes, will be reliance on state legislators in those jurisdictions intending to legalize sports gambling on professional and college sports to craft laws that will clearly and explicitly exclude interscholastic and youth athletics.

Nevada, with sports gambling laws grandfathered-in under PASPA that long pre-dated the Murphy decision, through its state Gaming Regulation 22.120, explicitly allows betting on professional sports and collegiate contests, and explicitly prohibits wagers on “any amateur non-collegiate sport or athletic event” – an exclusion intended by the Nevada legislature to prevent gambling on high school sports and on the entire range of youth athletics.

New Jersey, the plaintiff in the Murphy case, had sports gambling legislation enacted conditionally pending the outcome of the case and in Gaming Law A4111, as part of its definition of “Prohibited Sports Event” prohibits wagering on “all high school sports events, electronic sports, and competitive video games, but not international sports events in which persons under age 18 make up a minority of the participants.” No mention is made of sub-high-school, youth sports in the New Jersey law.

On June 14, 2018, at the sports book located in the Monmouth Park racetrack, Governor Phil Murphy commemorated the legalization of sports gambling in the state by placing the first bets, two futures wagers – $20 on the New Jersey Devils to win the Stanley Cup and $20 on Germany to win the World Cup. A state auditor’s report issued on August 15, 2018, disclosed that in its first two months, with sports books operational at only three casinos and two racetracks, $57 million had been wagered statewide, with that amount expected to increase exponentially as more betting sites become available and the NFL and college football seasons get underway.

Connecticut, Delaware, Mississippi, Oregon, Pennsylvania and West Virginia also had sports gambling legislation introduced conditionally pending the outcome of the Murphy case, with widely differing levels of clarity in the language of the bills with regard to their applicability to scholastic and youth sports. And post-Murphy bills have been introduced in California, Hawaii, Illinois, Iowa, Indiana, Kansas, Kentucky, Louisiana, New York, Maryland, Massachusetts, Michigan, Missouri, Oklahoma, Rhode Island and South Carolina, all with vague language not clearly and explicitly addressing their applicability to high school and youth athletics.