Saturday, February 6, 2016

In 'America's Game,' Gambling Casts a Long Shadow

In his latest book A Season in the Abyss, author Brian Tuohy chronicles the NFL’s battle against sports betting legalization – and how the impact of illegal wagering on football resounds far beyond the gridiron.

HIGH STAKES: There is a lot more riding on Super Bowl 50 than the Lombardi Trophy; according to the American Gaming Association, an estimated $4.2 billion will be wagered on the Big Game - and about 97 percent of the bets will be placed illegally. 

By: James Swift

Wisconsin writer Brian Tuohy spent the entirety of the 2014-15 National Football League season doing exactly what America’s most lucrative professional sports association says it does not want him – or any other fan – doing: illegally betting on its games.

Although federal law forbids all forms of sports gambling in all but four states,  Tuohy said he had no problems placing bets on the NFL product.

In fact, he said it was remarkably easy to wager on games.

“Without too much trouble, I could probably call three people I know on my cell phone and get access to a bookie,” he told Uncommon Journalism. Pending that didn’t work, all he had to do was hit the online search engines, where fantasy football leagues and offshore websites all offered him ample opportunities to crack open his wallet and put real money on the line.

His investigation into the seedy world of illegal pro football gambling culminated with A Season in the Abyss: Sports Gambling vs. the NFL’s Integrity. Fittingly enough, the book, published by Mofo Press in 2015, was released just in time to herald the arrival of a new pro football season.

The book, Tuohy said, is about more than how fans find ways to skirt the law and bet on NFL contests. It is also about the wide influence of illegal wagering on and off the turf, as well as the NFL’s longstanding efforts to keep state legislatures from legalizing sports gambling – which, as Tuohy notes, is not a stance without its fair share of contradictions.

“Their claim is that if fans are allowed to gamble legally on the sport, it will turn fans from fans to gamblers,” he said, “and yet at the same time, one of the reasons why the NFL’s ratings are so high and one of the reasons people are so interested in the sport, I believe, is they are gambling on it.”

Data from the American Gaming Association certainly backs up Tuohy's claim. The organization estimates $4.2 billion will be wagered on the outcome of Super Bowl 50 - and of that, only 3 percent will be wagered legally.

Much Ado About PASPA

A BETTING MAN: Author Brian Tuohy's latest
work A Season in the Abyss explores both the ease
 of gambling on professional football and the NFL's
 efforts to prevent sports wagering from being
legalized. (Photograph courtesy Brian Tuohy)
In 2011, the citizens of New Jersey approved a ballot initiative by a 2-to-1 margin to legalize sports betting within the state. However, the United States Court of Appeals for the Third Circuit shot down the law in 2013, following a lawsuit filed by all four of the major U.S. pro sports leagues and the National Collegiate Athletic Association. New Jersey responded with another piece of legislation a year later, SB 2460, which legalized sports gambling activity only in Atlantic City casinos. In Aug. 2015, the U.S. Court of Appeals for the Third Circuit - once more amid protests from the "big four" of American sports and the NCAA - denied the state's request yet again.

In both cases, the Third Circuit decided New Jersey's laws ran afoul of the Professional and Amateur Sports Protection Act of 1992, or PASPA. Also known as the Bradley Act, the federal law essentially froze sports betting in the U.S., preventing states from expanding their preexisting gambling set-ups. Delaware, Montana and Oregon were allowed to continue operating sports betting on a  limited scale, while Nevada remained the sole state in the union allowed to offer single game wagering. 

In short, Tuohy said the ruling gave Las Vegas' book makers a national monopoly on sports betting.

"It basically deputized the NFL and other sports leagues and allows them to go after any state which tries to legalize it," he said. "PASPA always holds up to any legal scrutiny ... all it does is continually say 'hey, look, if you legalize it, it's going to affect our integrity and our integrity is what we sell and that's how we make a profit, so therefore, you can't legalize it.'" 

One of the most commonly cited reasons why the NFL is resistant to wide-scale sports betting, Tuohy said, is because they fear it could result in game fixing - a subject he has written extensively about in the past

However, that rationale doesn't sit quite right with him. 

“If you listen to the NFL’s own rhetoric, it says they’ve never had a game fixed in their 95-year history," he said. "So why would it if it suddenly became legal – where it's regulated, where there is oversight, where people are monitoring everything that’s going on – why would that legalization suddenly lead to games being fixed?”

Rather, Tuohy said he believes the National Football League is dead set against expanded sports gambling because they simply don't want anyone else profiting off their brand, which generated an estimated $13 billion during the 2015-16 season.

Still, that's chump change compared to the staggering amount of money invested in football gambling in the U.S., which the American Gaming Association predicted was about $95 billion in 2015 alone.

Roughly 4 percent of that, the AGA claims, is wagered on official Nevada sports books. The remaining $93 billion, they assert, is placed illegally

How and Where Does the Gambling Take Place?

The state of Nevada takes in about $4 billion in sports bets each year, with NFL wagers comprising close to half of the income stream. As far as the scope of illegal sports wagers, Tuohy said some estimates tab the amount Americans spend to be as high as $400 billion annually.

What many bettors are oblivious to, Tuohy said, is exactly where their wagers are going - and ultimately, what they are helping finance. In the United States, illegal sports books remain one of the biggest revenue generators for organized crime; once in their coffers, that illegally wagered money winds up being used for a whole host of unlawful activities, running the gamut from money laundering and extortion to prostitution and drug trafficking. 

"Even the guys who are betting $50 with their local bookie, I don't think they understand that even though they may know their guy or think they know the guy they're betting with, many times bookies have to bet with other bookies to cover themselves, and that money goes up the chain," Tuohy said. "If it's not your local guy who is connected to organized crime, then someone he has to bet with probably is."

According to a 2015 report issued by the American Gaming Association, at least 80 illegal gambling operators in 23 states were convicted just in 2014. However, most of those weren't coming in the form of smoky backroom sting operations; per a report issued by Dr. Jay Albanese of Virginia Commonwealth University's Wilder School of Government and Public Affairs, almost two-fifths of those federal convictions were against operators of online and offshore betting websites.

Under the Unlawful Internet Gambling Enforcement Act of 2006, there is an exemption for fantasy sports operations. However, Tuohy said this is little more than a way for outfits to "weasel around" the legal definition of gambling and reap substantial profits - and among the biggest beneficiaries of the clause is the NFL itself.

"They take in money to run these leagues, but they call them prize leagues," he said. For an upfront fee, players can more or less bet on game outcomes, but since the reward isn't strictly monetary - instead, league champions are rewarded with signed footballs and other merchandise - it doesn't violate federal law. 

The NFL has been quite welcoming, however, of daily fantasy sports, or DFS, operations a’la Draft Kings and FanDuel, which do indeed hand out cash prizes to players. Not only are commercials for the sites in heavy rotation on ESPN and sports talk radio, several high-level NFL executives – including New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones – have even invested in them. 
NFL claims sports wagering would be
detrimental to the League's "integrity,"
Brian Tuohy begs to differ. The League is
constantly saying it has to protect itself,"
he said. "It doesn't have this integrity it
claims to possess." (Photograph courtesy
Brian Tuohy

While DFS sites are able to skirt PASPA by labeling themselves as skills-based gaming, Tuohy contests they are unquestionably gambling operations.

Amid allegations of insider trading and other predatory practices, he said the sites are far from being upfront with consumers about the risks of their services. That’s one of the reasons, he said, that numerous states – including New York, Illinois and, irony of ironies, Nevada – have elected to ban residents from placing money on daily fantasy sports. 

“A lot of states are doing this because they’re seeing how much money these companies are making and how much revenue is being generated,” Tuohy said. “The states want a piece of the action … they really just want to tax it and be able to regulate it so they can make some money off it as well.” 

Writing A Season in the Abyss, Tuohy noticed yet another way for players to gamble on the National Football League; several teams have licensed their official logos to be featured on state lottery tickets. 

So in Lombardi country, fans can’t legally put their money down on pro football outcomes – but they can plunk their hard-earned money down on Packers-branded scratchers, with the revenue flowing right back to the National Football League.

An Argument in Favor of Legalization

Per the National Council on Problem Gambling, six million Americans are considered gambling addicts. In 2013, the organization tabbed the total societal costs of gambling addiction to exceed $6 billion annually

Conducting research for A Season in the Abyss, Tuohy said hardcore pro football gamblers hardly ever turn a profit. More times than not, the end outcome is a perpetual cycle of debt, crippled finances and devastated relationships.

“Most of these guys think they know more than they do and they do a lot of chest beating and saying they are doing better than they are,” he said. “As one guy who runs a sports book in Las Vegas told me, ‘a lot of guys say they make a living doing this, but you have got to define what a living is.’” 

While there is little that can be done to prevent individuals of the sort from gambling away their life savings, Tuohy says he does believe the U.S. could benefit from adopting a European-style sports wagering model. Regulated and heavily monitored, he said legalized betting in countries like England and France has actually had the exact opposite outcome the NFL fears; suspicious activity has been flagged and investigated, and as a result, numerous arrests and convictions have followed in the wake of soccer, tennis and rugby game fixing scandals.

As an economic generator, there is no doubt legalized sports betting would provide considerable revenue for the U.S. government. If the nation’s illegal sports wagers were legalized, a 2014 Williamette Sports Law Journal report said the federal impact could be as much as $19 billion a year

Efforts to overturn PASPA continue. New Jersey will challenge the legality of the law before the Third Circuit Court of Appeals for the third time Feb. 17, while U.S. Rep. Rob Matzie (D-Penn.) has introduced a house resolution asking Congress to repeal the Bradley Act, thus giving states that have already legalized casino gambling the ability to also offer sports wagering. 

Tuohy himself suspects the NFL may secretly want to see PASPA struck down; the revenue potential, he said, is simply far too great to leave on the table. 

The problem, he said, is that the current NFL leadership is obsessed with maintaining its “integrity” – something senior NFL litigators such as Lawrence Ferazani have testified in court would be compromised in the face of legal sports betting. 

However, considering the deluge of scandals that have rocked the League – covering-up steroid use by players, suppressing the findings of concussion studies and outright lying about incidents such as the infamous Ray Rice elevator video – Tuohy said he wonders if the NFL really has that much of a reputation to uphold. 

“The League is constantly saying it has to protect itself,” he said. “It doesn’t have this integrity it claims to possess.”

Want to hear more from Brian Tuohy on the NFL and sports gambling? An exclusive two-part interview is available at the official Uncommon Journalism YouTube page. Part one can be viewed here, while part two can be viewed here

Uncommon Journalism, 2016.

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