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White paper calls for legalized sports betting in the United States based on Australian model

A new paper published by Penn State Law's Institute for Sports Law, Policy, and Research argues that the sports gambling legal regime in Victoria, Austrailia, offers a model for U.S. lawmakers on how to legalize sports betting in the United States.
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UNIVERSITY PARK, Pa. – The sports gambling legal regime in the Australian state of Victoria provides a model for U.S. lawmakers on how to legalize and regulate sports betting in the United States, according to a white paper published by the Institute for Sports Law, Policy, and Research at Penn State Law.

The paper, by Penn State Law Professor and Institute Director Stephen F. Ross and Research Fellows James Gorman III and Ryan Mentzer, argues that legalized sports gambling in the United States would protect the integrity of professional sports and have several beneficial outcomes. It has been accepted for publication in the Arizona State Sports and Entertainment Law Journal. The collaboration with Gorman and Mentzer, third-year students at Penn State Law, is the third recent institute publication on cutting-edge sports issues involving student coauthors.

“Problems including the heavy involvement with organized crime, lack of transparency, and foregone financial opportunities, all suggest that the current federal prohibitions on sports gambling outside of Nevada are flawed,” the authors write in “Reform of Sports Gambling in the United States: Lessons from Down Under.”

“The best solution is to legalize sports gambling through federal legislative reform, coupled with league agreement and approval,” they argue. “This solution would allow states to tax and regulate the sports gambling, thus removing the presence of organized crime and allowing transparency between the bettors, bookmakers, regulators, and sports leagues. Bringing sports gambling ‘into the light’ would also give increased visibility to the problems of compulsive gamblers, and facilitate the identification, treatment, and appropriate other remedies for problem gamblers.”

Their paper provides a broad overview of illegal gambling in the United States and lays out the need for policy changes and the fiscal benefits to state and federal tax coffers. The authors also explore relevant American law and make the case for federal legislative reform.

They then point to Victoria, Australia, as a model for how the United States could effectively legalize sports betting. Special regulations in the Victorian model allow for information sharing and cooperation between sports betting providers, controlling boards, and law enforcement. This legal framework, the authors write, “promotes, rather than endangers, sports integrity,” by channeling gambling in an appropriate fashion and allowing integrity threats to be identified quickly.

“The Victorian model of sports betting has proven successful in maintaining integrity in sports, while also boosting the Victorian economy,” they write. “By removing sports betting from the dark shadows and smoky back rooms of bars, and into the hands of legitimate businessmen, the United States can ensure sporting integrity, while simultaneously boosting the economy and substantially increasing federal and state tax revenues in a similar fashion.”

The white paper arose out of conversations between Ross, who is a senior fellow in the University of Melbourne Sports Law Master’s Program, and Australian sports lawyer and former Australian Football League executive Adrian Anderson. Comparing Australia’s regime of regulated and legalized gambling to problems in China and India where gambling is completely outlawed, Ross and Anderson previously collaborated on a Sports Business Journal op-ed, advocating that the United States borrow from the regime in Victoria.

Anderson then participated via videoconference in a program held in February 2015 that included Penn State professor Mikael Ahlgren, an expert on the gambling industry from the Department of Hospitality Management, and John H. McNally III and Douglas Sherman from the Pennsylvania Gaming Board. The white paper is a culmination of these efforts and builds on Anderson’s work on sports law in Australia.

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