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Weeks of hoops, heaps of cash: AGA estimates $10 billion will be bet on NCAA Tournament

The 68 teams have been chosen, and pencils (or gadgets) nationwide stand poised to help fans fill out brackets for this year’s NCAA men’s basketball tournament. And the American Gaming Association estimates that $10 billion will be bet, the vast majority of it illegally.

The 68 teams have been chosen, and pencils (or gadgets) nationwide stand poised to help fans fill out brackets for this year's NCAA men's basketball tournament. And the American Gaming Association estimates that $10 billion will be bet, the vast majority of it illegally.

In a Monday morning conference call, Freeman, who leads the lobbying group for commercial and tribal casinos, renewed his call to abolish the 1992 Professional and Amateur Sports Protection Act, which bans sports betting nationwide except in Nevada casinos.

Freeman estimated that $150 billion is wagered on all sports annually, and said it is his group's duty to challenge "antiquated policies" like the ban, which he called an "abject failure by any measure."

He said the ban threatens the integrity of sports — in the past he suggested it invites chicanery such as points shaving in college games — and "restricts the ability to (wager) in an above-board manner."

Also, Freeman suggested, the ban forces bettors underground, to bookies, offshore websites, and, this time of year, to seemingly innocent office pools. Freeman said such pools are illegal in about two-thirds of U.S. states, and that several states' laws make bracket pool wagerers felons, but didn't name which states.

Freeman estimated that $300 million, or 3 percent, of the money forecast to be bet on this year's three-week NCAA Tournament, which starts Tuesday with play-in games and ends the weekend of March 31 with the Final Four in San Antonio, will be bet legally.

The National Collegiate Athletic Association, college sports' governing body, opposes sports betting and condones office bracket contests for amusement, not money. Nevertheless, millions of people will likely bet on the tournament.

Freeman's group estimated that about one quarter of American adults, 54 million people, wagered on last year's tournament, spending $18 billion in entry fees. He also estimated that the total included 24 million people who filled out brackets in basketball pools and spent $2.6 billion on entry fees.

"Obviously, it's time for a change," Freeman said during the call. "We have a unique opportunity to give consumers a safe way to do exactly what they're doing without making them common criminals in the practice."

Freeman said his group is confident the ban will be lifted, saying it's no longer a matter of "if," but of "when" and "how." He said the association is watching eagerly to see how the Supreme Court handles New Jersey's challenge to the ban, which was introduced in December and backed by Republican Gov. Chris Christie.

"We're refreshing our SCOTUS blog browsers constantly," he said.

Freeman added that 18 state legislatures nationwide have introduced 48 pieces of sports betting legislation, in case the Supreme Court lifts the ban. (The court heard arguments on the case in December and is expected to issue an opinion before the end of its term in June.)

Connecticut, Mississippi and Pennsylvania have introduced expanded sports betting measures this year. This month, West Virginia's Legislature passed such a measure and sent it to Republican Gov. Jim Justice to sign. New York's Legislature is set this week to hear a sports betting measure introduced by state Sen. John Bonacic (R-Orange County).

Supporters of New York's measure have argued that expanded sports betting could bring the state up to $30 million in additional revenue annually.

Professional sports leagues have historically opposed sports betting. Major League Baseball Commissioner Rob Manfred this month said his league opposes the West Virginia measure. Nevertheless, the National Basketball Association has proposed adopting a legal betting model in which sports books would pay the league an "integrity fee" of 1 percent of all money wagered on NBA games.

The NBA has argued the fee would mitigate the costs of complying with regulations that would be required to deter betting scandals.

"Without our games and fans, there could be no sports betting," NBA Senior Vice President Dan Spillane said in testimony submitted to New York state and highlighted by CNBC. "And if sports betting becomes legal in New York and other states, sports leagues will need to invest more in compliance and enforcement, including bet monitoring, investigations and education."

Freeman suggested such fees, or requiring more information from bettors, which has also been proposed, would be half-measures or "red herrings" that would fail to drive out illegal wagering or shield sports' integrity. Only a ban would accomplish these goals, he said.

Lifting the ban, Freeman said, would both protect sports and spark technological innovation. He forecast "a flood" of new products from entrepreneurs would emerge to enable mobile platform and other sports wagering.

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