The Supreme Court’s Decision on Sports Gambling was Bad and Wrong

Why the world is worse off with legalized sports gambling.

By now you’ve likely heard that, last Monday, the Supreme Court of the United States handed down a 7–2 ruling declaring that PASPA violated the 10th Amendment of the Constitution. PASPA, or the Professional and Amateur Sport Protection Act, had for the last 26 years declared that betting on sports was illegal in 46 of the 50 states.

Now, thanks to SCOTUS’s decision in the case of Murphy v. NCAA, state legislatures will have the ability to decide on a more local level how and if to regulate the practice of sports gambling within their own borders (inter-state gambling remains illegal). The decision was met with cheers from frat houses across the country, as college bros caught a glimpse of a future where they could waste even more of their parents’ money.

Revelry was also no doubt happening in corporate offices across the country. Historically, the professional sport leagues had all strongly opposed legalized sports betting on the grounds that it would threaten the integrity of their games. But in recent months, having been convinced of the vast sums of money they stood to gain, they’ve all come to see that maybe integrity isn’t actually so important after all.

The 10th Amendment, as I’m sure you all know, grants to the states every right not explicitly bestowed upon the federal government, and this includes regulation of gambling. But while the majority decision coupled with Justice Ginsberg’s dissent show that valid legal arguments both for and against SCOTUS’s decision, arguing about legal validity is pedantic and boring. I’m more interested here in the moral arguments.

The moral argument in favor of repealing PASPA is as obvious as it is wrong. It hinges on ideas of personal liberty, that we should all have the ability to do with our own money what we want. While this sounds nice, the purpose of codes of law, and of government more generally, have always been to stop us from doing exactly that. Since the time of Hammurabi, we’ve realized that organized societies can only function by placing well-defined limits on personal freedoms.

Industry stakeholders and legislators will also crow about job creation and significantly increased tax revenue that gambling brings. They’ll claim that sport gambling is happening anyway, so we may as well regulate and tax it. While it is true that it is already happening, and that there are benefits, the positives do not come close to equaling the negatives when it comes to gambling. Gambling is not a social good. It is an addictive practice that can harm families and destroy livelihoods. Most importantly, these negative externalities are disproportionately put upon the most vulnerable members of our society.

According to a 2014 study in the Journal of Behavioral Addictions, “Problem gambling was twice as likely in neighborhoods with the highest levels of concentrated poverty” compared to wealthier neighborhoods. Thomas Corley’s book Rich Habits looked at individual income as opposed to neighborhood-level economic factors, and similarly found that 77% of poor people gambled on sports at least once a week. That number was 16% for those classified as rich. And a 2005 Brookings Institute paper found that average spending on gambling “in dollar amounts is roughly equal across the lowest, middle and highest income groups.” This means that, on average, low-income households spend a larger percentage of their income on gambling.

This is not to say that poor people gamble more than others, but that it is more impactful on their communities. In 1999, the US government commissioned a National Gambling Impact Study, and as Dean Gerstein, the study’s lead investigator, reported, “In general, gambling very heavily doesn’t do nearly as much damage to rich people as it does to poor people — rich people can afford to throw away a lot more money on gambling without getting into hot water.” But so many games of change (specifically lotteries) are aimed specifically at these more vulnerable communities, and the new gambling age we now find ourselves in promises to only make the situation worse.

As gambling is already highly taxed, it creates a regressive system of upward wealth transfers, a ‘trickle-up’ effect if you will. Poor people end up giving more than their fair share to the government, partially subsidizing not just themselves but those better off than them as well. In a more just society, those responsibilities should fall more heavily on the wealthiest members of society. Gambling taxes then are effectively the inverse of more just taxes like those on property or capital gains.

Additionally, the non-taxed cost ends up in the pockets of gambling magnates and other members of the economic elite, creating a direct pipeline taking money out of poorer communities and depositing it in savings accounts at banks where a poor person couldn’t even get in the door. The striking down of PASPA will only increase the size and speed of this pipeline. As Dr. John Kindt, an academic at the University of Illinois who studies gambling, put it, “The bottom line is a lot of this gambling is directed toward the poorer segments of society who are spending proportionally more. We are making poor people poorer.”

The case of Murphy v. NCAA could have far-reaching consequences in a wide array of issues, as it acts as an important precedent as to the limit of the power the federal government can exercise over the states. But those that stand to gain most from this decision in the more immediate future are not the sport fans with a new outlet at which to direct their passion. It’s the billionaire owners of the NBA, NFL, MLB, and NHL. It’s the Republican politicians who will attempt to use this as an excuse to cut taxes in other areas. It’s the casino owners who will see their bank accounts swell. And it’s the poor who are going to be bearing more than their share of the cost.