As Monday morning rolled around in Denver, the Mile High City was awoken by breaking news saying that the federal ban on sports betting had been lifted by virtue of a 7-2 ruling, as Brian Windhorst of ESPN reported first.
The Supreme Court has just ruled 7-2 to overturn the federal ban on sports gambling. It's a historic day in American sport.
— Brian Windhorst (@WindhorstESPN) May 14, 2018
The legalization of sports betting will completely and fundamentally alter the fabric of professional sports in America. This now allows all professional sports — including the PGA and the NCAA — to be wagered on. Now, what comes next is still the great unknown. There will eventually be massive influxes of money going to each league. There will be collective bargaining agreements to decide how the new influx of money will be distributed. Salary caps will skyrocket and chaos will take hold.
It was the NBA and MLB working together in lockstep that allowed the progression and eventual full federal legalization of sports betting. The communion of Adam Silver working with Major League Baseball eventually created the correct dialogue and verbiage to get a deal done, and now there is suddenly going to be billions of dollars flooding into professional sports.
But, there are questions that have flared off of the decision to legalize sports betting that are being asked right now.
The most pressing question that Congress and each league need to answer is how to make sure that integrity remains high and that there is no way for the sports betting marketplace to be manipulated or ‘fixed’.
That is why Adam Silver originally pushed for a one percent ‘integrity fee’ to provide each league with the money and resources to make sure they have people and technology consistently monitoring all bets and betting lines. Now, that one percent ‘fee’ is no longer on the table, but there will likely be some amount of money that will be allocated from the bets themselves to keeping the system functional and legitimate. The NBA partnered with Sportradar at the beginning of the 2017-18 season for the reason of getting ahead of the curve when sports betting eventually becomes legal.
Also, the player’s associations from the NHL, MLB, NFL, and NBA also have their concerns. All four groups came together and put out a joint statement that was part of Windhorst’s reporting.
“The time has come to address not just who profits from sports gambling, but also the costs,” the statement read. “Betting on sports may become widely legal, but we cannot allow those who have lobbied the hardest for sports gambling to be the only ones controlling how it would be ushered into our businesses.”
With massive amounts of money expected to flood each league, it makes sense that each players association would want a seat at the table as discussions take place for how to allocate the new funds.
The next question is how long will it take for betting to become available to the public and the answer will excite many.
"Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own."
Flood gates are open. 4 states already have laws in place ready for this moment (NJ, WV, PA & MS) and more than 20 are in line now.
— Brian Windhorst (@WindhorstESPN) May 14, 2018
Windhorst said it perfectly; the floodgates are open. With four states already prepped and prepared with legislation in hand, betting could begin in just a few weeks starting in New Jersey with already 20 states in line with them. Sports betting isn’t just legalized; it is already being adopted into state legislation and being pushed to be activated sooner rather than later.
The questions are plentiful at the local level as well. What does this mean for the Denver Broncos, Colorado Rockies, Denver Nuggets, and Colorado Avalanche?
For the NFL and the Broncos, there is hope of a large salary cap spike. As of right now, the NFL’s salary cap does a great job at one thing: keeping parity strong in the NFL. It is nearly impossible to pay for an elite quarterback and have enough money for a top-flight defense. If there eventually is a big rise for the NFL’s salary cap, that degree of parity could change and could allow the Broncos to spend more money on both sides of the ball.
For the NHL and the Avalanche, it is much of the same as the Broncos. The NHL has a hard cap which keeps the level of parity strong. That opens the door for more upsets and fewer dynasties. Now, if there is a big influx of money to the NHL, that parity could change. Also, for the Avalanche in particular — who have mostly young talent an no bloated contracts — being able to couple a big rise in cap space with an already large amount of money to spend allows for rapid improvement and spending if they so choose. The options become much more expansive with more money funneling into the NHL.
For the MLB and the Rockies, not much would change. Each team will receive some amount of the cash flow of legalized sports betting, but without a legitimate cap, things will mostly stay the same. The one thing that can be foreseen is owners being more willing to spend because of the influx of money. Smaller market teams may be willing to spend in a more reckless fashion to acquire talent because of it — and the Rockies fit into that mold.
For the NBA and the Nuggets, there has already been a prior precedent set. When the NBA saw the cap spike in 2016-17 after a new television deal was agreed upon by the Association, all hell broke loose. Suddenly, all NBA teams had around an additional $20 million of cap space to work with, which caused a mass spending spree that altered the trajectory of the NBA as a league forever. That will likely happen again with another massive flow of money into the league. It will directly help the Nuggets as well. With Nikola Jokic in line for a max contract this summer, Gary Harris’ contract extension kicking in, and Jamal Murray’s future payday looming, having more cap space to retain their young core and also improve the roster can be huge for the Nuggets over the next five or so years.
With the legalization of sports betting, anything can now happen. The new TV money flooded the NBA is what allowed the 73-win Golden State Warriors to sign Kevin Durant and become arguably the most talented basketball team to ever grace the hardwood. The only way that four All-Stars were able to come together like that was because of an immediate spike in cap space.
That potential can now be stretched to each league. Imagine if the Broncos had the money to outright pay Aaron Rodgers in 2020 while also keeping Von Miller and others in uniform. Or if the Avalanche were able to outright sign John Tavares this upcoming offseason. The possibilities are as endless as the seemingly unlimited money stream that legalized sports betting will bring to the table.