Get Herald RSSYou know what makes watching sports better? Gambling. And wouldn't you know it, turns out that's a pretty popular way to enhance our national pastimes. Over $2.4 billion in sports bets were wagered last year in Nevada, the only state in the Union where it's legal. And with over $192 million in revenues, at a time when so many U.S. industries are tanking, one wonders whether or not the widespread illegality of sports gambling should be reevaluated.
It's a pretty simple concept. You've probably said at one time or another, "I bet team X is going to crush team Y" this week. Why not profit from your prophetic wisdom? As is the case with most Nevada sportsbooks, or operations that manage and run sports gambling, you simply choose a sports event and wager an amount of money. If you win, you'll be paid back a sum proportional to how likely that event was predicted to happen by the sportsbook's oddsmakers. So while you might not make so much betting on Roger Federer to take down some first round qualifier, you would have made a killing on betting that the Tampa Bay Rays would make the playoffs this year (specifically, $65 for each dollar you bet).
So why is it illegal? There is the moral concern that people will not know how to properly manage their gambling habits. This has become a secondary reason weakly supported by some opposed to widespread legalization of gambling of any kind. The two primary reasons are 1) the worry that gambling will adversely affect the integrity of sports, perhaps leading to more games that are fixed, and 2) if it's legalized everywhere, it becomes more difficult for the government to corner the market on gambling. Notice these two arguments probably won't be advocated by the same person.
The problem with the first argument is that it confuses gambling with legalizing gambling. Yes, people fix games because they gamble on them. Therefore we should illegalize gambling? People like money. They're going to continue liking money whether they can gamble legally or not. And the gambling operations in Vegas make the most money when their odds are closely aligned with the outcome. Fixed game busts hurt them. Wouldn't a more sensible solution to the integrity/fixed game problem be to further legalize sports gambling? That way, you'd be giving gambling operations more power and oversight to crack down on those looking to exploit the integrity of games for profit.
The second argument is more cynical. If you watch TV, I guarantee you've seen ads for the state lottery. People pay money to the government in the hopes that they will get lucky and the government will pay them a lot of money. The only differences between this and betting on the ALCS is that state lotteries are mindless and the government gets the money instead of private citizens or operations. If gambling were to be widely legalized, the government gambling operations would have to compete with the privately owned ones, meaning they couldn't make as much of a profit.
Beyond the taboo, many internet sites have sprung up to facilitate extracurricular activity. Some even allow you to profit without having to pay anything (not in the AIG way). Yesterday, my friend sent me a link to CentSports.com. It's a beta site, but the basic idea is that you are given ten imaginary cents to wager on sports events with various spreads/odds, and as you win, you earn more of this imaginary money to bet with. If you run out, your balance resets to ten cents again. The best part? If you accumulate more than twenty dollars of imaginary money, you can exchange it over the site for real money. The site manages to make a profit through ads and the fact that it's really hard to turn ten cents into $20. Either way, it's just one example of how private operations can manage to take some of the taboo (e.g.: wasting your money) out of the equation.
In the end, there's very little difference between buying a stock and betting on the Super Bowl. Both can be entertaining and potentially profitable ways to gain from your edge in knowledge about someone's performance.
Also, seeing Eli Manning face-off against the Browns is way more fun than watching some ticker line at the NYSE.
Ben Singer '09 knows Kenny Rogers would approve.
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