No ‘I’ in sports bets

But is prohibiting bets on individuals enough to assure integrity in college games?

An admitted political compromise would legalize sports betting in Iowa while keeping bets on Iowa student athletes illegal — but only on their individual performance.[1]

Promoters of the plan are betting that this small nod to sports integrity might gain a few votes. However, the compromise in the Legislature shines a light on the integrity issue and to larger weaknesses, which are many.

If legal sports betting were not a threat to sports integrity, no such compromise to the betting bill, HF748, would be needed. The compromise concedes a threat remains to competition outside Iowa that gamblers might influence. Plus, legislative deals made now could be quickly reversed next year once that new betting door is open. I mean, what are the odds?

These are among many points — including fiscal and economic issues — being missed in the rushed drive in 2019 to expand gambling in Iowa with legalized sports betting.

Governing Magazine looked at the revenue states might expect. The magazine cited a Moody’s Investors Service report that noted “sports betting in Nevada accounted for just 2 percent of statewide gambling revenue.”[2] In the first six months of legalized sports betting in New Jersey a mere $3 million in tax revenue was raised from in-casino betting, in a state much larger than Iowa and with a higher tax rate on betting (8.5 percent).[3]

This is not economic development. Sports betting in Iowa is for Iowa residents only; we would not attract any out-of-state spending. And much of the money wagered on sports would come from spending on other forms of entertainment at local businesses, where more of the profits stay in the state.

Casinos want sports betting to entice new customers, who might become regulars at the slot machines and gaming tables.

So for a meager increase in revenue, the state would open up greater opportunities to contaminate sports integrity and create new problems of gambling addiction, along with the attendant family problems and breakups, embezzlement, and job loss.

Already, most families have no savings, or very little. Around half of U.S. families have no or negative net wealth.[4] More than 60 percent don’t have even $1,000 put aside for emergencies let alone for retirement.[5] Having more gambling opportunities keeps people from getting ahead.

Many of these problems are only a matter of time. Any bets on how soon we will see them?

2010-PFw5464Peter Fisher is research director of the nonpartisan Iowa Policy Project in Iowa City. pfisher@iowapolicyproject.org

 

[1] The Gazette, Cedar Rapids, March 19, 2019, “Compromise advances sports betting bill in Iowa House,” https://www.thegazette.com/subject/news/government/compromise-advances-sports-betting-bill-in-iowa-house-limits-in-play-prop-wagers-on-iowa-collegiate-sports-20190319, and March 22, 2019, “Betting on college pivotal to gambling debate,” https://www.thegazette.com/subject/news/business/iowa-sports-betting-college-sports-20190322.

[2] Liz Farmer. How the Sports Betting Ruling Will Impact State Budgets The Supreme Court outlawed a federal ban on sports betting on Monday, and some states are poised to capitalize. Governing May 14, 2018. https://www.governing.com/topics/finance/gov-how-legalizing-sports-betting-will-impact-state-budgets.html

[3] The Tax Policy Center, “TPC’s Sports Gambling Tip Sheet.”  https://www.taxpolicycenter.org/taxvox/tpcs-sports-gambling-tip-sheet.

[4] The Quarterly Journal of Economics, Emmanuel Saez and Gabriel Zucman, Vol. 1, May 2016, Issue 2, Wealth Inequality in the United States Since 1913: Evidence from Capitalized Income Tax Data, Pg. 554. http://gabriel-zucman.eu/files/SaezZucman2016QJE.pdf.

[5] Bankrate’s Financial Security Index, 2018, https://www.bankrate.com/banking/savings/financial-security-0118/.

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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