New NBA Commissioner Adam Silver says that expanded legalized sports betting in the United States is inevitable, so his league should embrace the activity. While giving a speech at the Bloomberg Sports Business Summit on Thursday, Silver said the league should be "open to participating in it".
The commissioner's belief in the inevitability of expanded sports gambling is fiscal. He believes that most U.S. states are cash-strapped, so many inevitably will turn to gambling to raise more funds. Gambling revenues are in many ways an easy way out for state legislatures, because the politicians can raise funds without raising taxes.
NBA Will Ultimately Participate
Silver told a crowd of reporters and sports business executives that it was a matter of time before the NBA participated in this expansion, so it made sense to embrace it wholeheartedly. Silver said, "It's inevitable that, if all these states are broke, that there will be legalized sports betting in more states than Nevada. We will ultimately participate in that."
Taking that thought process to its logical conclusion, Adam Silver says the NBA can benefit from sports gambling, too. If the world's most popular basketball league embraces sports gambling, that benefit could be greater. It also would allow the NBA to control the access of the sports gambling industry to their product--at least control it more than pretending sports betting doesn't exist.
NBA and Other Leagues Sued New Jersey
Silver's stance is a major departure from the NBA's traditional attitude towards sports gambling, and is a break from the stance other major American sports leagues have taken. Just two years ago, the NBA joined with the NFL, MLB, the NHL, and the NCAA in a lawsuit against New Jersey. That lawsuit was an attempt by the major pro and college sports organizations to keep the state of New Jersey from legalizing sports gambling in the state.
That lawsuit took a two-year route through federal appellate courts, and eventually New Jersey appealed the case to the U.S. Supreme Court. The Supreme Court declined to hear the case earlier this summer, which ended New Jersey's attempts to expand sports gambling beyond Nevada, Oregon, Montana, and Delaware. Those four states were given a special exemption from a federal ban back in 1992, but many consider such a one-sided ban, allowing 4 states legal rights while barring 46 other states, is unconstitutional.
David Stern Had Much Different Attitude
At the time, the National Basketball Association's leadership struck a different chord. David Stern, who was NBA commissioner from 1984 until January 2014, was quite critical of New Jersey's attempts to legalize sports gambling.
Court documents in the legal case quote David Stern saying in November 2012, "The one thing I'm certain of is New Jersey has no idea what it's doing and doesn't care, because all it's interested in is making a buck or two. They don't care that it's at our potential loss."
David Stern may have had a special talent for condescension, but he also may have been right in suggesting New Jersey's lawmakers didn't know the full scope of what they were doing. In either case, his side won the legal battle. The sports leagues prevailed in the case, due to a majority decision by the Third Circuit Court of Appeals. Though it is no longer challenging the federal ban directly, New Jersey's government continues to pursue its goals in another form.
Adam Silver Becomes the New Commissioner
Since that case was in court, the NBA had a rare change in the position of its top executive. Adam Silver, the a longtime advisor and handpicked successor of David Stern, appears to have a much different stance than his predecessor. If so, then states like New Jersey could have an influential new ally.
Legitimate sports gambling enterprises collected $3.6 revenues from American sports betters in 2013. The amount of sports betting which takes place in the USA any given year far exceeds that total. In fact, the amount of illegal sports gambling might be 100 times greater. The National Gambling Impact Study estimates that $380 billion is wagered each year in the United States on sporting events.
Potential Impact on NBA Revenues
If so, then the potential impact of legalized sports betting on a league like the NBA could be profound. The NBA's revenues in 2013 were $4.6 billion, so the potential impact of sports gambling on the sport could be profound. New commissioners try to make their mark. David Stern certainly left his mark, growing revenues from $118 million in the 1982-1983 season to where it was when he left. Adam Silver will want to continue the growth and embracing sports gambling might be the key.
