Bookies in Rupp Arena? What could sports betting mean for college athletics in Kentucky?
Tom McMillen wrote the book, literally, on sports and ethics and predicted the day when sports betting would be the law of the land.
He’s still worried about it.
The high school basketball phenom and University of Maryland star who delayed his entry into the NBA to accept a Rhodes Scholarship, went on to Congress and voted for the Professional and Amateur Sports Protection Act in 1992. That’s the law that outlawed sports betting nationwide, which the U.S. Supreme Court overturned in 2018. That’s why Kentucky legislators are hurrying to catch up with House Bill 137, a sports betting bill that sailed out of committee on Wednesday, which includes the ability to bet on Kentucky’s college teams.
“It raises a whole level of risk, there’s a one hundred percent probability of a scandal,” he said from his office in northern Virginia, where he heads the Leads1 Association, an organization of athletic directors that includes the University of Kentucky, University of Louisville and Western Kentucky University. “Kentucky has had a history of that in the past.”
Between UK and UofL, there’s been a slow, steady drip of scandals. Kentucky’s last point shaving scandal was in 1951 with Ralph Beard and Alex Groza, but the UK basketball team was penalized in 1989 over money sent to a recruit, and in 2002, President Lee Todd cleaned house over recruiting problems that started in football and ended in NCAA sanctions, which exposed a series of problems over all. Todd hired Mitch Barnhart, who has kept the program clean since then. Louisville, however, picked up the slack, with too many scandals to detail here.
McMillen acknowledges that illegal sports betting is already going on in Kentucky; according to one analysis, roughly $2 billion a year worth.
“There’s no question the illegal market is there but when you make it much more open and accessible, there’s a bigger potential for risk,” McMillen said. “I predict in 10 years you’ll see sportsbooks in college arenas.”
UK and UofL are keeping quiet, issuing a joint statement about the importance of compliance. When sports betting laws first got started right after the Supreme Court decision, there were lots of discussions about “impact” or “integrity” fees, money that would flow from betting revenues directly to the schools to help with beefed-up compliance.
None of that has ever happened, says Chris Grove, a gambling industry analyst in Las Vegas.
“The benefit that flows back is instead in the form of increased engagement,” Grove said. More people betting on UK basketball means more people watching it. He’s adamant that legalized sports betting won’t bring any more risk of scandal; if anything, the sportsbooks and analysts keep such a close eye on results that something like point shaving would be quickly detected. “Using the regulated market for activities is one of the dumbest crimes imaginable.”
What sports betting does do is further expose the hypocrisy that Division 1 college sports are anything but professional franchises. It will be fascinating to see how the NCAA — still resisting paying players who make millions for the college sports industrial complex— tries to get in on the action of gambling revenues.
And revenue, after all, is what we’re really talking about. If the universities can’t get a direct piece of gambling revenues, then perhaps they will eventually benefit with improved state funding, which in this case means the absence of state cuts.
But the estimated $22.5 million a year from this bill isn’t going to do much to turn our state budget right side up. It won’t really help anyone but the racetracks that will be in charge of it. No one thinks gambling is good economic policy for a state. Good economic development is based on higher education, innovation and the jobs and industries that develop from them. States that make those investments, think Virginia and North Carolina, left Kentucky behind decades ago.
Yet because of Kentucky’s historic unwillingness to do any kind of comprehensive tax reform, gambling has become some kind of weird economic lifeline that Democrats and Republicans alike appear to be embracing.
It’s smart to capture those dollars from the illegal markets. But for the long-term, we need to do a lot better. The idea of bookies in Rupp Arena might send some to their fainting couches, but that’s the price we’ll have to pay.
