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The Shield Stands Alone: Why Does the NFL Hate Sports Gambling?

Every major American sports league is starting to favor legalized sports gambling. Except for the NFL. A rigorous review of the league's history reveals why.

by Ryan M. Rodenberg
Mar 25 2015, 1:44pm

Image via Andrew Weber-USA TODAY Sports

During a federal court hearing in Philadelphia earlier this week, the four major American sports leagues and the National Collegiate Athletic Association presented a unified, anti-gambling front to the three judge panel of the United States Court of Appeals. This was the latest move in a long-running case against New Jersey Governor Chris Christie over the state's attempt to legalize sports betting.

Don't be fooled. The consensus is a facade. Which means expanded sports gambling—on a national scale—could be imminent.

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While on the same page in connection with regards to the narrow legal issues in the current Christie case, there is a growing rift between the co-plaintiffs. Among the big four professional leagues (the NCAA pertains to, ahem, amateur sports), the National Football League is an outlier. Because only the NFL, in a long-running effort to purportedly protect The Shield against a myriad of integrity concerns, has fully retained its decades-long opposition to expanded sports wagering.

The National Basketball Association's sports betting domino fell last November, when league commissioner Adam Silver penned a New York Times op-ed reversing the policy stance of his predecessors. Silver staked his claim as the most progressive (and pragmatic) league executive when he wrote: "Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards." Billionaire Mark Cuban, owner of the Dallas Mavericks, applauded Silver for ending years of hypocrisy on the issue.

NBA commissioner Adam Silver indicating the height of the stacks that legalized sports gambling would yield. Image via Bob Donnan-USA TODAY Sports

Major League Baseball and the National Hockey League warmed to Silver's blueprint shortly thereafter. On February 27, MLB commissioner Rob Manfred responded to a question at the MIT Sloan Sports Analytics Conference in Boston and said "[sports gambling] uniformity at the federal level seems like a pretty good idea to me." Earlier in the month, he had promised to "give fresh consideration" to the issue when speaking with team owners. In a textured ESPN The Magazine cover story, David Purdum cited multiple sources indicating the NHL was similarly open to legalized sports wagering. Within days of the article, while moving forward on possibly placing a franchise in Las Vegas, longtime NHL commissioner Gary Bettman foreshadowed that the league would be enunciating a definitive policy decision soon.

But not the NFL.

The league has held firm against what has been described as the "inevitable" move towards sports gambling legalization nationwide. In response to Silver's op-ed, the NFL publicly doubled down. Speaking to Ken Belson of the New York Times one day after Silver's piece was published, league spokesman Brian McCarthy said the NBA's new-found position "doesn't change our stance that has been articulated for decades: No gambling on NFL games." When Gambling Compliance reporter Tony Batt asked McCarthy in February if the NFL had any response to the reevaluation by other sports league commissioners on the issue and resulting policy fission, the NFL PR Guy curtly said "No."

Why is the NFL so seemingly intransigent, especially when other leagues seem increasingly open to relaxed gambling laws as well as the potential profits that could come with liberalization and legalization? Drawing on a mix of legal depositions, Congressional testimony, primary source material, archived newspaper articles, and various court filings stretching back to the 1960s—all obtained by VICE Sports—a portrait emerges of a league firmly opposed to expanded legal sports gambling, but keenly aware of the role wagering plays in its highly commercialized sport.

The status quo is lucrative. The NFL wants to keep it that way.

NFL commissioner Roger Goodell flanked by various playthings. Image via Kirby Lee-USA TODAY Sports

On April 1, 1962, then-United States Attorney General Robert F. Kennedy authored a long article in The Atlantic explaining the nexus between organized crime and gambling, lamenting the prevalence of sports betting in State of the Union speech-like fashion:

Kennedy's seminal piece came shortly after Congress enacted the Wire Act of 1961. Still in effect, the Wire Act criminalizes certain interstate transmissions "of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest." Three years later, Congress passed the Sports Bribery Act. The statute was aimed at preventing the type of gambling-fueled point shaving that had been repeatedly seen in college basketball. Together, the two laws formed a federal framework addressing sports gambling and the corruption of athletic contests. Arguments pertaining to "integrity of the game" resonated with Congress.

The NFL took note.

Since its inception in 1920, the NFL has often positioned itself as being attentive to the integrity of the game. And with good reason. After a plan to fix the NFL championship game in 1946, a New York Times headline captured the league's response in granting then-commissioner Bert Bell certain powers, powers that remain relevant today:

The sentiment persisted among league executives, many of whom speak of "protecting the shield," a reference league executive Lawrence Ferazzini memorialized in a 2012 deposition:

The NFL has a strong incentive to protect professional football against the nefarious aspects of gambling. Indeed, there is one element everyone—except for a match-fixer—wants to see when watching sports: an uncorrupted game on the level. Without some degree of suspense and a genuine belief that players and coaches are trying to win, sports will cease to exist in their current incarnation. Neither fans nor gamblers will pay to watch match-fixers as puppet masters on the playing field or court. Just look at the fraudulent television game shows in the late 1950s. Congress held hearings and passed a federal statute to ban the deceptive practice popularized in the 1994 Robert Redford-directed movie Quiz Show.

In 2001, Milt Ahlrich, a former assistant director of NFL security, told Chad Millman in The Odds that "betting is the league's hydrogen bomb. I can't tell you how damaging a gambling scandal would be to the league..." Ahlrich's sentiment rang true decades earlier, too. In 1963, the league suspended star players Alex Karras and Paul Hornung for their sports betting activities and too-close-for-comfort relationships with individuals deemed unsavory. It was the first big scandal for newly-appointed NFL commissioner Pete Rozelle, who acted swiftly and was lauded for his action:

The NFL and Rozelle emerged largely unscathed. And the NFL got more aggressive about sports gambling in the 1970s.

***

In 1976, the league sued Delaware Governor Sherman Tribbitt, challenging the state's plans to offer regulated wagering on professional football and alleging that:

Among other things, the U.S. Constitution's 14th Amendment provides Americans with due process protections in connection with any deprivations of life, liberty, or property. District Court Judge Walter Stapleton ruled quickly, rejecting the NFL's request for a temporary restraining order that would have stopped Delaware's plans:

Delaware largely won the case on the merits the following year and joined Nevada as the only other state offering sports betting on professional football. A few other revenue-hungry states started pursuing sports betting during the 1980s, including Oregon, which offered a "Sports Action" parlay involving NFL games. Would a trickle turn into a deluge?

The NFL did not wait to find out. In 1990, the league went to Congress to get what it failed to obtain in the Delaware lawsuit—protection over "property" related to wagering. (In this case, intellectual property). The NFL claimed that its teams' trademarks were being infringed on by gamblers. How so? Here's then-NFL commissioner Paul Tagliabue:

During the same Senate hearing, the NFL also had Harvard law professor Arthur Miller testify on its behalf. Miller recycled the arguments the NFL made in the Delaware litigation and added a legal twist, positioning the issue as one of "misappropriation of goodwill:"

Congress disagreed. The proposed legislation died. But a related bill was regurgitated a year later, this time cutting the misappropriation of intellectual property and goodwill arguments. Then-Senator Bill Bradley of New Jersey, a former NBA player for the New York Knicks, moved to stop the spread of state-sponsored sports gambling—because of its alleged pernicious effect on the integrity of sport—while contemporaneously grandfathering the perceived evil to four states already offering sports betting. Nevada, Delaware, Oregon, and Montana celebrated. They now had a legal monopoly.

Paul Tagliabue made his way back to Congress when Senator Bradley's bill was being debated and distanced the NFL from the pecuniary aspect of sports gambling he had testified so passionately about the previous year:

Tagliabue was now framing the sports wagering issue as something completely unrelated to business considerations. Something that was very important to the youth of America. It worked. The non-economic, integrity-preservation stance resonated and Congress passed the Professional and Amateur Sports Protection Act ("PASPA") by a wide margin in 1992. This wasn't the full-blown intellectual property protection the NFL sought in the Delaware case or the previous Congressional bill, but it was a victory nonetheless.

Seven years later, Congress completed the National Gambling Impact Study to explore the scope of wagering in America. The study devoted considerable time to sports betting. After highlighting the negative consequences of gambling addiction, longtime broadcaster Bob Costas opined on how wagering benefits sports leagues, especially the NFL:

Costas's statement is consistent with numerous academic studies that have found gambling consumption to be a driver of consumer interest in sports. Nevertheless, NFL executive vice president Jeffrey Pash testified before Congress on March 23, 1999 that:

While the NFL maintained its public resistance to traditional sports betting, the league soon recognized the consumer benefits of gambling's close cousin—fantasy sports. In 2006, Congress moved to pass the Unlawful Internet Gambling Enforcement Act, or UIGEA for short. UIGEA was designed as an indirect way to stop online wagering. Banks and other payment processors were targeted, barring them from facilitating gambling-related payments. The NFL and its peers supported the legislation:

However, UIGEA had a curious carve-out. A safe harbor was created for fantasy sports, where participants spend real money on the outcomes of player-level outcomes (e.g. touchdowns caught, yards rushed, field goals made) instead of game-level outcomes more typically found in traditional sports wagering involving point spreads.

The result? Fantasy sports betting was deemed legal. Traditional sports betting was deemed illegal. Such hair-splitting soon became problematic. At the same time the NFL and other sports leagues moved to embrace fantasy, while revenue-hungry states looked to expand certain sports betting options.

The inevitable clash came when Roger Goodell replaced Tagliabue as NFL commissioner in 2006 and went after Delaware. Again. This time it was Governor Jack Markell. Shortly after being elected, Markell was considering options to help boost his state's sagging economy. One option was to re-start sports wagering. Goodell's letter to Markell was forceful, even providing some helpful underlining:

Markell ignored Roger Goodell's advice. The NFL and the other sports leagues sued Governor Markell. Interpreting PASPA, the resulting court decision permitted Delaware to offer parlay bets in connection with NFL games, but barred the state from making single game wagers available.

On August 7, 2012, the NFL, along with the NBA, NHL, MLB, and NCAA, sued another state governor, New Jersey's Christie. Months earlier, Christie had signed legislation authorizing Vegas-style sports betting in the state's licensed casinos and racetracks. The legislation followed a November 2011 statewide referendum on the issue that garnered the public's support by a 2-1 margin. The plaintiff quintet alleged:

In 2012, Roger Goodell filed a sworn declaration in support of the federal lawsuit. In one relevant section, he said:

His "most important responsibility" notwithstanding, Goodell was unsure on a key issue when subjected to questioning under a court-ordered deposition a few months later:

Such uncertainty didn't matter. The sports leagues prevailed in their lawsuit. The U.S. Court of Appeals for the Third Circuit, in a split 2-1 decision, ruled against New Jersey on September 17, 2013. Legalized sports wagering would not be coming to Atlantic City or Monmouth Park.

Or so it seemed for about a year.

Frustrated with the 2013 decision (now referred to as Christie I), Governor Christie again tried to bring sports betting to the Garden State. In late 2014, emboldened by certain helpful language in the Christie I ruling, the New Jersey legislature passed a bill that would repeal the state's ban on sports betting as applied to certain casinos and racetracks. The NFL and its four co-plaintiffs took exception, filing suit. The litigants currently are back at it again, arguing about PASPA. This is known as Christie II and a decision should be reached around June.

The chances of a Christie III-type lawsuit involving the same multi-plaintiff quintet are slim.

After the defection by the NBA late last year and what appears to be an imminent shift by MLB and the NHL, the NFL now stands alone. With no public statement expressing a willingness to re-consider its position, only the NFL has steadfastly maintained the historical artifact that is its anti-gambling policy. If Roger Goodell makes a 180 degree turn on the issue, it will represent an epic reversal.

Why is the league digging in? Simple. The status quo is incredibly lucrative for the NFL and its team owners. The league is first among non-equals. First in revenues. First in television ratings. First in team valuations. First in the underlying value of its broadcast agreements. The NFL's incentive to deviate from a long-held policy position developed over the course of decades is relatively slight. By continuing to publicly decry sports gambling, all while privately reaping its consumption benefits, the league can have it both ways and steer clear from doing anything potentially risky. All the better to let another sports league stumble along the learning curve—and then avoid their missteps years later, when there is greater certainty on how to directly monetize sports betting.

Absent intervention by Congress or a federal judge, the NFL will resist reversing course on sports gambling in the immediate future. The golden goose, forged through 50-plus years of litigation, lobbying, and lawmaking, is too valuable to risk on a bet.