D.C. should place its bets early on le­gal sports gam­bling

The Washington Post Sunday - - LOCAL OPINIONS - BY GUY BENT­LEY

States are scram­bling to re­act to the Supreme Court’s de­ci­sion strik­ing down the fed­eral pro­hi­bi­tion on sports bet­ting, but it’s the Dis­trict that could and should be among the first to seize the op­por­tu­ni­ties pre­sented by le­gal sports bet­ting.

Time and again, at­tempts to lib­er­al­ize the Dis­trict’s dra­co­nian gam­bling laws have flopped. Sports-pool lot­ter­ies and casi­nos fell foul of ob­jec­tions both pro­ce­dural and moral. But times have changed. The Dis­trict rightly lib­er­al­ized its mar­i­juana laws, and would have an even bet­ter regime in place were it not for Congress’s con­tin­u­ing de­sire to put its views ahead of the city’s res­i­dents.

There is an in­creas­ing recog­ni­tion in the Dis­trict and across the coun­try that il­le­gal mar­kets in pop­u­lar ac­tiv­i­ties such as sports bet­ting serve only to cre­ate scofflaws and ben­e­fit crim­i­nals rather than pro­tect sport­ing in­tegrity.

The Mary­land House of Del­e­gates passed a bill for a ref­er­en­dum on sports bet­ting this year, but it failed to pass in the Se­nate. It is un­likely there will be an op­por­tu­nity for le­gal­iza­tion un­til at least 2020. Vir­ginia is even fur­ther be­hind, with no bill passed and Gov. Ralph Northam (D) re­fus­ing to stake out a po­si­tion.

This in­er­tia gives the Dis­trict a sig­nif­i­cant op­por­tu­nity to cap­ture first-mover gains by cap­i­tal­iz­ing on the court’s slap-down of overly in­tru­sive fed­eral in­ter­fer­ence.

Mary­land is al­ready ben­e­fit­ing from the open­ing of MGM Na­tional Har­bor casino, which de­rives 40 per­cent of its busi­ness from Vir­ginia.

The Dis­trict en­joys a thriv­ing sports scene and is well-placed to ben­e­fit from a le­gal and well-reg­u­lated bet­ting mar­ket. Ted Leon­sis, chief ex­ec­u­tive of Mon­u­men­tal Sports & En­ter­tain­ment, which owns Wash­ing­ton’s Cap­i­tals, Mys­tics and Wizards fran­chises, is en­thu­si­as­tic about the court’s de­ci­sion. “It brings a multi­bil­lion-dol­lar in­dus­try out of the shad­ows and into the sun­light, where its in­tegrity can be guar­an­teed and con­sumers can be bet­ter pro­tected,” he wrote.

Leon­sis is right. Many D.C. res­i­dents al­ready bet on sports and they should be able to do re­spon­si­bly with re­li­able, safe op­er­a­tors of­fer­ing odds that re­flect re­al­ity and it ap­pears this may soon come to fruition. Coun­cil mem­ber Jack Evans (DWard 2) says he would like to see le­gal bet­ting be­fore the year is out. “This is a source of enor­mous rev­enue, and we need to move for­ward as quickly as pos­si­ble,” Evans told The Post. Anir­ban Basu, econ­o­mist and chief ex­ec­u­tive of the Sage Pol­icy Group, agrees, ar­gu­ing that le­gal sports bet­ting could have a “sig­nif­i­cant im­pact” on the D.C. econ­omy.

But if the Dis­trict is go­ing to fully reap the ben­e­fits of le­gal sports bet­ting, it needs to en­sure a com­pet­i­tive mar­ket with pro­por­tion­ate reg­u­la­tions and con­sumer pro­tec­tions. To max­i­mize rev­enue, any tax on sports bet­ting must be low. This is be­cause sports-bet­ting providers op­er­ate on small profit mar­gins. Set taxes too high, and the en­tire en­ter­prise be­comes un­vi­able, and con­sumers will con­tinue to place bets with un­reg­u­lated, off-shore providers. De­spite hav­ing a decades-long mo­nop­oly on le­gal sin­gle-game bet­ting, Ne­vada taxes just 6.75 per­cent of gross gam­ing rev­enue.

Li­cens­ing will also be key. Lim­it­ing the num­ber of li­censes or charg­ing ex­or­bi­tant fees will re­strict com­pe­ti­tion to the detri­ment of con­sumers. Al­low­ing for a wide range of prod­ucts and on­line bet­ting is also a must. On­line prod­ucts are es­pe­cially im­por­tant as gam­bling of any kind is for­bid­den on fed­eral land, of which there is an abun­dance in the Dis­trict.

To en­sure that sports bet­ting re­mains the pre­rog­a­tive of adults, age ver­i­fi­ca­tions such as those in Ne­vada and Bri­tain must be put in place, and ad­e­quate sup­port pro­vided to prob­lem gam­blers.

Ac­cord­ing to a 2017 re­port, 32 states could be of­fer­ing le­gal sports bet­ting within five years. Delaware le­gal­ized it as of June 5. The ques­tion is not whether the Dis­trict should le­gal­ize sports bet­ting, but can it be among the ear­li­est to take ad­van­tage of it and reap the sub­se­quent ben­e­fits?

The writer is a con­sumer free­dom re­search as­so­ciate at Rea­son Foun­da­tion.

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