This week the Supreme Court ruled in favor of an issue that seems to be nearing a tipping point in terms of public acceptance: sports betting. But will it be enough to overcome staunch opposition from those who stand to lose the most? Time will tell.
Back in 2011, New Jersey voters overwhelmingly approved an amendment to their state constitution to allow sports betting in the Garden State. The following year, then-Gov. Chris Christie signed a law permitting the practice. In doing so, he challenged anyone to "try to stop us."
The federal government and professional sports leagues tried to stop him.
They cited a 1992 federal statute, the Professional and Amateur Sports Protection Act, which made it illegal for states other than Nevada to sponsor or permit sports betting. But in a 7-2 Supreme Court decision, the court just struck down PASPA, ruling that it had unconstitutionally commandeered the state legislatures. States may now permit sports betting.
For years, the staunchest opponent of online gaming has in fact been one of the nation's most successful gambling moguls, Sheldon Adelson. Through the Las Vegas Sands Corporation, he controls some of the most noteworthy casinos both in and outside of Las Vegas. And through the Coalition to Stop Internet Gambling he has personally bankrolled the nation's largest interest group opposed to online gaming.
Adelson insists this isn't about money. "This is a moral issue," he says. Perhaps the sin of gambling--ahem, online gambling--does keep Adelson up at night. But at the risk of sounding cynical, perhaps we should consider why a casino titan--and the casino industry in general--might oppose new ways for people to gamble.
In markets as diverse as electricity, railroads, radio, airlines, taxis, oil, natural gas, finance, trucking, television, health care, and pharmaceuticals, regulations can favor the powerful status quo players over upstarts and average Joes. Through government rules that protect their profits from competition and raise their rivals' costs, insiders can push markets to be less efficient and less equitable, rather than more so as the public interest theory would predict. The reason is simple: The politically organized are smart, can influence the law, and don't always like competition.
Fortunately, the dominance of special interests is not always assured, and new legal regimes can sometimes create an opportunity for reform. In the next few years we will see if that is the case with online sports betting.
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Matthew Mitchell is the director of the Mercatus Center at George Mason University's Study of American Capitalism.
Editorial on 05/18/2018