March Madness Daily: Saint Peter’s Defied the Odds. Local Bettors Couldn’t

Local fans of the Jersey City-based Peacocks were unable to capitalize on those odds at any legal sportsbook in the state.

Saint Peter’s entered March Madness with 100-1 odds to make the Sweet Sixteen. Local fans of the Jersey City-based Peacocks were unable to capitalize on those odds at any legal sportsbook in the state.

New Jersey is one of about a dozen states with legal sports gambling that excludes local college teams. The provision, born from a desire to protect both on-campus students and the integrity of NCAA competitions, has become a lightning rod within the industry, as many believe it is accomplishing the opposite of its intended purpose.

Saint Peter’s fans in New Jersey have two options to bet on NCAA tournament’s best story—cross state lines into New York or Pennsylvania, or wager via an illegal bookie/offshore sportsbook. Both deprive the state and its regulators of revenue, but the latter also creates motivation for bettors to keep using illegal sites. It seems unlikely that a Peacocks fan would open an offshore account today, then revert back to her legal options to bet on the Devils tomorrow.

“If our goal is to protect vulnerable athletes, protect the integrity of vulnerable competitions and protect the consumers betting on these things, then we need to give them the proper benefits of oversight and regulation,” Casey Clark, senior vice president at the American Gaming Association, said in a phone interview. “Otherwise it’s all happening in the shadows, which is where we were back in April 2018.”

New Jersey residents aren’t alone in their frustrations. When Gonzaga faces Arkansas on Thursday, residents in Gonzaga’s home state of Washington will be unable to legally bet the game in their apps. The same holds true for Providence fans when the Friars face Kansas on Friday, and for fans of two teams in the women's Sweet Sixteen—UConn and South Dakota.

Major events like March Madness may be the best chance at changing the laws. The three-week men’s basketball tournament is one of the biggest sporting events on the U.S. betting calendar—$3.1 billion is expected to be wagered, according to the AGA—and deep runs by teams like Gonzaga and St. Peter’s call more attention to those laws.

It also forces sportsbooks to get creative. While DraftKings couldn’t let people bet on the Peacocks, it did offer boosted odds on Saint Peter’s to beat Murray State for anyone who opened the app in New York, a potential addition draw for fans in Jersey City to make the quick trip under the Hudson River to New York.

DraftKings said in a statement the company “believes that creating artificial barriers for customers such as restricting markets on in-state college teams and college events hosted within state lines deter bettors from moving to the legal market and ultimately minimizes revenue opportunities for states."

New Jersey was the state most active in fighting the federal ban on sports betting, and legislators in other states have continued to follow New Jersey’s lead. There’s currently legal, operational sports betting in 31 U.S. jurisdictions, and 13 of them explicitly prohibit betting on local teams, according to the AGA. Nebraska will be the 14th when it officially launches. Arkansas’ law has the potential to ban those markets; Illinois’ only allows them for in-person wagers.

“The illegal markets had a multi-decade head start, and don’t have any of the cost of doing business that licensed regulated operators do,” Clark said. “[This restriction] becomes a penalty to those who are playing by the rules, and an accelerant to the illegal market.”

There have been attempts to change the provision in various states. In November, New Jersey voters had the option of amending the law by allowing betting on local college teams. The initiative failed, with 57% of voters choosing to keep the law as is. More recently, a push to change the law in Virginia also failed, this time in discussions among lawmakers.

This article is a reprint from Sportico, who will be publishing short business highlights throughout the three-week NCAA tournament. To view the original story, share and comment, click here.

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