While sports betting is in the ascendancy across the US, its relationship with one of the country’s most popular sporting categories remains deeply complicated. Daniel O’Boyle examines how legal wagering co-exists with collegiate athletics two years on from the repeal of PASPA.
On New Year’s Day, more than 16 million Americans watched the Oregon Ducks win one of collegiate football’s most historic titles, as they edged out the Wisconsin Badgers in the Rose Bowl Game.
A few months later, the Oregon Ducks—this time the basketball team—finished as Pac-12 Conference regular season champions, likely to enter the National Collegiate Athletics Association’s (NCAA) Division 1 Men’s Basketball Tournament with a high seed. Of course, the Covid-19 ultimately led to the cancellation of the event more commonly known as March Madness.
“As a smaller market for pro teams, the University of Oregon and Oregon State University almost have a professional following,” Oregon Lottery community and corporate engagement manager Matthew Shelby says. “The fan excitement around these teams is [just like] pro teams.”
For bettors in the state—who have been able to bet via the lottery’s SBTech-powered Scoreboard app since October 2019—the local college teams, among the most popular sports teams of any kind in the Pacific Northwest region, might have appeared an attractive betting option.
But while Scoreboard lets players bet on professional sports just about anywhere in the state, betting on collegiate contests remains prohibited.
Not only were bets on the Ducks or the Oregon State Beavers not offered, but players are unable to bet on games featuring out-of-state teams either. That means no betting on the College Football Playoff, or—had it occurred—March Madness, an event the American Gaming Association says should see $295m in legal bets in 2020 and billions wagered illegally.
While college sports betting was not entirely restricted, the only places it could be offered were in the state’s tribal casinos. These are located more than 100 miles from Oregon’s largest population centers of Portland, Eugene and Salem.
Oregon is not the only state with stringent restrictions on collegiate betting: New York, New Jersey, Delaware and Rhode Island all have bans on betting on in-state teams. The District of Columbia, meanwhile, will join Oregon in prohibiting collegiate betting of any kind when the market goes live.
Money on the table
While not written in law, Oregon’s restrictions may have had the most material effect on revenue, with Scoreboard set to lose more than $5m for the first nine months of the state’s fiscal year. This means it looks increasingly unlikely that the state will meet its revenue projections of $141.2m in the first three years post-launch.
Shelby says the Oregon Lottery estimates it is leaving 30-40% of its current betting handle on the table by not offering bets on college sports. That would mean the Lottery may have missed out on more than $70m in handle from Scoreboard’s launch in October 2019 to the end of the year.
Even if only a few states implement similar restrictions on collegiate betting, friction remains between the sports betting industry and the NCAA, as well as its member universities.
The NCAA’s fight against legal sports betting has mostly been a losing battle in recent years, most obviously seen in the US Supreme Court decision in Murphy vs NCAA that struck down the Professional and Amateur Sports Protection Act (PASPA).
After that ruling, many states opened sports betting markets. One of the first was Mississippi, in college football’s Southeastern hotbed.
“In the Southeast, there were only a few pro teams for a long time,” Allen Godfrey, executive director of the Mississippi Gaming Commission says. “There’s still not many, so college sports are really big here. I think it would be really hard to offer legal betting but not offer college sports.
“In New Jersey and some other states, they don’t offer wagering on in-state universities, but the most popular teams in New Jersey are the New York pro teams. College sports aren’t as big there as they are in the Southeast.”
As states opened up legal sports betting markets, the NCAA was forced to remove its rule banning states that offer legal bets from hosting NCAA championship events.
This year the Pac-12 Conference Men’s Basketball Tournament had even been scheduled to occur in Las Vegas. Last year, Nevada sportsbooks won $36.5m on basketball (with college and pro combined) in March, from $498.7m in stakes.
NCAA players, however, still may not bet on the professional versions of the sports they play at the college level.
“Years ago the NCAA took stronger positions against sports betting, but we’re in a much different world now,” Shelby says. “The Pac-12 conference championship is held in Las Vegas now. There’s a world of difference compared to where we were 10 to 15 years ago.”
Rather than fighting all legal wagering, the NCAA appears to have changed tack. Last year it was reportedly a supporter of a federal sports betting bill that was the subject of preliminary discussions in the US Senate, with Mitt Romney and Chuck Schumer as likely sponsors. With state lawmakers, operators and the American Gaming Association vocal opponents of gambling being regulated on a federal level, its support still set the NCAA at odds with the betting sector.
But while the NCAA as an organization gains most of the attention for regulation around college sports, it is made up of member universities. These often drive change individually or as part of regional conferences.
“We haven’t really met with the NCAA, but we do meet with the Southeastern Conference, because they’re the conference whose schools are in our state,” Godfrey says. “We have met with athletic directors from each of the Division 1 universities in the state and they raised issues with legal betting and we have tried to address those issues.
“We try to meet twice a year and we’re open, as a regulator, to meeting more. We will continue to grow that relationship as this industry continues to grow.”
In Oregon, Shelby says it was the state’s two largest universities—University of Oregon and Oregon State—who pushed for the prohibition on collegiate betting. This was mostly due to concerns about how high levels of access to student-athletes could affect the integrity of contests.
“When we spoke to universities, they had concerns about game integrity,” Shelby explains. “I think their biggest concerns were around the student-athletes.
“One of the points they made that really resonated with us was that the general public doesn’t have nearly the access to professional athletes that they do to collegiate athletes,” he continues. “Players on those teams sit in class with other students every day. And as well as that, these athletes are students first.”
Elsewhere, some universities that have been unable to prevent bans on college betting have done their best to take matters into their own hands. Indiana’s Purdue University, for example, instituted a rule banning all students and university employees from betting on Purdue games. Pennsylvania’s Villanova University, the 2016 and 2018 NCAA tournament champions, soon followed with a similar rule.
“As wagering on college sports is legalized in more states and becomes more accessible via online applications, Purdue University endeavors to promote fair play, the integrity of competition and the well-being of student-athletes, coaches and others connected to its athletic programs,” the university said of the rule.
“Purdue faculty, staff, students and independent contractors may be afforded greater access to information about the university’s teams, student-athletes and coaches that could impact the outcome of competitions.”
In Oregon, the lottery had always hoped that its launch without college sports would only be a temporary situation, with plans to offer the markets in the future. Some lawmakers, however, had a different plan. Representatives Shelly Boshart Davis and Daniel Bonham have put forward a bill to prevent the lottery from offering bets on college sports.
The lottery was able to push for more favorable amendments, however, with a later version of the bill restricting only player prop bets and bets placed by certain individuals. It all came to nothing, ultimately, with the bill dying in committee.
“We engaged with the University of Oregon and Oregon State University to see if we could come to some sort of agreement about what the lottery could offer,” Shelby says. “And we came to an agreement but nothing really got done in that legislative session so no version of that bill went anywhere.
“We ended the session without any real progress.”
But while Oregon remains one of a group of states with restrictions on college sports betting, Shelby remains hopeful that increased education about the betting landscape will lead to greater acceptance of bets on college sports.
“When you talk about a prohibition on Oregon Lottery offering collegiate sports wagering, all that does is prohibit Oregon Lottery from doing it,” Shelby says. “It doesn’t eliminate the availability of college sports betting.
“But I think there was a fundamental lack of knowledge and we’re talking to people to make sure they understand that the black market is a very real thing,” he adds. “If we want to protect game integrity, the best thing to do is to make as much of this activity part of a legal, regulated book as possible.”