When in 2016 the U.S. Supreme Court accepted to hear the appeal in the Christie v. National Collegiate Athletic Association case (later renamed Murphy v. National Collegiate Athletic Association) no one expected New Jersey ever to be allowed to offer sports betting to its residents.
For years New Jersey had sought to challenge Nevada’s monopoly on legal sports betting, eventually passing legislation allowing the Garden State’s casinos and racetracks to accept bets on sports events played outside the state and not involving state’s college teams.
It was a decision that caused professional sports leagues NFL, NBA, MLB and NHL as well as college sports association NCAA to sue under Professional Amateur Sports Protection Act (PASPA) to prevent sports betting in the State.
In court hearings, New Jersey admitted that its proposed sports betting regulations violated PASPA, a federal law passed in 1992 permanently outlawing sports betting in all but four states: Nevada, Montana, Delaware and Oregon.
In its defence, New Jersey argued that PASPA was against the Tenth Amendment, preventing
the federal government from forcing states to enforce federal laws.
Along the way, New Jersey’s received the support of several other US states, many of which started working on their own set of regulations to allow for legal sports betting in case of a favorable Supreme Court ruling.
A possibility no longer remote after the presentation of the oral arguments to the SCOTUS last December reportedly went in favor of New Jersey and against the sports leagues.
After arguing for years that prohibiting sports betting was essential to preserve the integrity of their games, the sports leagues first embraced fantasy sports and then completed a 180° turn when they started lobbying state legislatures with their preferred forms of sports betting regulations.
Now if the Supreme Court overturns PASPA, as many as 32 US states are expected to legalize sports betting within the next five years. But the ramifications of such a groundbreaking decision would extend well beyond the US borders, with industry observers believing the radical decision is likely to trigger a domino effect with far-reaching consequences.
Will Asia follow suit?
Speaking to Forbes earlier last month, David Leppo of FootballBet.com, stated: “If sports betting in the U.S. is legalized, others will fall in line.” Several other industry commentators have spoken publicly in recent weeks claiming that Asian countries would follow suit, legalizing and regulating sports betting in the coming years.
That, however, is not as practical as indicated by the wishful thinking of industry stakeholders.
In mainland China, where sports lotteries have the monopoly on all sports betting activities, the illegal market is understood to be many times larger than the regulated market.
For a system built around betting on credit through agent sites, the primary challenge will not be new sports betting laws, but the introduction of readily available payment solutions and a significant shift in the cultural approach. Changes necessary to the creation of a new system where players place bets directly with regulated bookmakers.
“Asians are not as worried about regulation as operators are in Europe,” said one executive at a major sportsbook software provider who did not wish to be named. “All you need to operate a sportsbook in Asia is a PAGCOR license,” he added.
State-owned Philippine Amusement and Gaming Corporation (PAGCOR) and the Cagayan Economic Zone Authority license 100s of offshore Asian-facing online bookmakers. PAGCOR also serves and licenses local operators that accept betting on horse racing, jai alai, cock-fighting and basketball, making the Philippines Asia’s primary igaming jurisdiction and fastest-growing regulated sports betting market.
“Even if you introduce regulations, what is going to stop players from placing their bets with black market operators offering better odds on the few selected sports that bettors care about. (soccer in South East Asia and cricket in India),” another industry participant said.
“Only way to stop that would be a law like the one passed in Singapore. Making bettors liable to jail time if they bet on illegal sites,” he said.
However in Singapore the state-owned tote operator, Singapore Pools, has been operating since the late sixties and all it did in recent years was to extend its offering to include online sports betting.
Nevertheless, the experience of the city-state is very telling: despite having the ability to place bets at one of many betting outlets or via phone or online, Singaporeans continue to turn en masse to the black market for their sports bets. Not a week goes by without a report of arrests for illegal sports betting in the city-state
Macau, the other candidate to lead an eventual sports betting revolution in Asia, is in a similar situation, with a monopoly in the hands of Macau SLOT.
The Sociedade de Lotarias e Apostas Mutuas de Macau currently accepts bets on football and basketball at a handful of locations as well as via phone and through a somewhat old website from players that are within the city limits.
Having overtaken Las Vegas as the casino capital of the world, Macau has shown little interest in sports betting. Only when it has experienced a slowdown in casino revenue growth, there has been speculation around the opening up of the sports betting market as a way to raise additional revenues.
Many local industry operators have for years tipped the addition of Vegas-style sportsbook lounges at land- based casinos in Macau as a way to complement casino gambling and to target new demographics.
Very similarly the Hong Kong Jockey Club has a monopoly on horse racing and football betting in the Special Administrative Region.
Despite the availability of a regulated betting offering, sports bettors in Hong Kong gravitate towards illegal and offshore bookmakers in high numbers, proving, that the opportunity to bet on credit on a more substantial number of events and at more competitive odds is a powerful motivator.
Elsewhere, Islamic law governs Indonesia and Malaysia, strictly prohibiting most types of gambling, although the local governments are not necessarily putting many efforts into stopping residents from accessing offshore betting sites.
In a similar situation are bettors in Buddhist Thailand, where all forms of sports betting are prohibited, except for betting on horse racing.
While there is no doubt that a repeal of PASPA will change the US sports betting market forever, industry observers say that it will have a limited effect on sports betting in Asia.
Sportsbook lounges in Macau and regulated online sports betting in more Asian countries are going to happen regardless of the positive decision from the U.S. Supreme Court. And that’s because they are the inevitable next step, which Macau and other SE Asian countries will take to satisfy the appetite for sports betting in their markets.