Report: States Should Bet on Sports Gambling Laws that Work


Despite the popularity of March Madness, most sports betting remains illegal in the United States. But in anticipation of a U.S. Supreme Court ruling, states that hope to legalize sports betting should start making plans to tax and regulate sensibly, a new Competitive Enterprise Institute report urges.

“State lawmakers should support a legal betting market that makes compliance easy, keeps taxes low, and ensures consumer safeguards,” said Michelle Minton, CEI senior fellow and author of the report, Legalizing Sports Betting in the United States: A Playbook for State Liberalization and Regulation. “The last thing lawmakers should want is to let the black market offer better odds and more interesting products for consumers.”

For legalization to work, the report identifies essential components of a successful plan: the need for adequate availability of gambling licenses, reasonable tax rates, diverse product offerings, robust consumer protections, and easy means for consumers and businesses to cooperate and share information with regulators.

The report also warns against pitfalls of legalization, such as writing into law a new government-guaranteed revenue stream for sports leagues or giving the leagues control over what sports may take bets.

Every March, millions of Americans join friends, relatives, and coworkers in “March Madness” betting pools, centered on the National Collegiate Athletics Association (NCAA) Men’s Basketball Tournament. But for the past 25 years, that’s been illegal under federal law. As early as this spring, the Supreme Court could strike down that law as a result of a lawsuit brought by the state of New Jersey.