Leave student athletes out of sports gambling, say college ADs

Internet gambling firms seek free hand to compete with illegal offshore sites

Illinois takes on Ohio State in a basketball game at the United Center in Chicago last year. (One Illinois/Ted Cox)

Illinois takes on Ohio State in a basketball game at the United Center in Chicago last year. (One Illinois/Ted Cox)

By Ted Cox

CHICAGO — University athletic directors asked that college sports be left out of any legalized-gambling bill in testimony before a state House subcommittee Thursday in Chicago.

“We oppose legalized gambling on college sports,” said Larry Lyons, director of athletics at Illinois State University, speaking on behalf of 12 of the 13 Division I programs at Illinois colleges.

Citing the “very real differences between amateur and professional sports,” Lyons spoke of the “layers of security” professional athletes enjoy, while “student athletes will be easy to contact” in the “open environment” of a college campus, leaving them prone to those seeking to fix games or otherwise alter sporting events, both among their college classmates and others visiting a campus.

Lyons spoke of how many student athletes are teens, young adults yet to fully mature, and “part of our mission is to help these kids grow up.” He addressed not only game wagers, but so-called prop bets on a player’s individual performance, something he said could have an adverse impact on a teenage basketball player suddenly hyperaware of how many free throws he’d made or assists he’d been credited with. He also asked legislators to set a minimum age, such as 21, that would make it illegal for most college students to bet on sports.

“We need to protect student athletes,” Lyons said.

Lyons testified before the Sales, Amusement & Other Taxes Subcommittee meeting at the Bilandic Building in Chicago on a sports-gambling bill sponsored by Rep. Robert Rita of Blue Island. Rita is trying to get the bill drafted and passed by the end of the General Assembly session May 31, as Gov. Pritzker has budgeted $200 million just for licenses on legal sports gambling in the 2020 fiscal year.

State Rep. Robert Rita wants to have a bill on legal sports gambling passed by the General Assembly by the end of its session May 31. (One Illinois/Ted Cox)

State Rep. Robert Rita wants to have a bill on legal sports gambling passed by the General Assembly by the end of its session May 31. (One Illinois/Ted Cox)

Rep. Michael Zalewski of Riverside was sympathetic to Lyons, saying, “I certainly understand your concerns.” He asked if the state could perhaps rule out in-state bets on in-state college games, and Lyons said that’s how it’s done at legal sports books in Nevada, although he urged a complete ban on college sports wagers.

On the other hand, Bob Greenlee, representing a company affiliated with a firm called Game Profit, asked that professionals in so-called esports, or professional online video-game competitions, be included in legal gambling in Illinois.

“Esports are sports,” Greenlee said. He added that 500 billion hours were spent watching YouTube’s esports channel last year — equal to the time spent on Netflix. “Esports are huge and they’re growing,” he said.

Greenlee cited Illinois’s own millionaire Fortnite gamer Tyler “Ninja” Blevins, of Grayslake, joking that Ninja’s lucrative esports career “allowed him to move out of his parents’ basement and into his own basement.”

Greenlee estimated that $13 billion would be spent on esports wagers next year, and projected Illinois’s potential slice of that at $1.8 billion.

Zalewski, however, was leery, saying, “We’re very nervous about esports because I think we don’t understand it.”

Rep. Margo McDermed, of Frankfort, pointed out that these issues were in addition to the matters at the core of any bill on legalized sports betting: license fees; whether gamblers need to register in person at designated state sites; the “vig” or vigorish, meaning the set percentage at stake on a wager; and state tax levels. “It’s a big calculation with a lot of moving parts,” she said.

A panel of executives from online betting companies argued for a free hand in competing against the "black market,” in the form of existing illegal offshore sports gambling websites. They advocated making sports betting available on smartphones, with GPS systems to ensure bets are being placed within the state, and also argued for lower license fees, stating that high fees would deter competition and leave many gamblers dealing with their local bookie on the black market.

John Warren Kindt, professor emeritus at the University of Illinois at Urbana-Champaign, argued against sports gambling entirely, stating that tax revenues are “outrageously low,” in part because of the need to undercut illegal bookies. He called projections of a $250 million windfall from sports betting “PR spin.”

While industry experts testified that New Jersey had made $120 million in taxes on sports betting from 2013 to 2016, Kindt said real figures were about $1.8 million a month, or $21.6 million a year. “This is just peanuts,” he said. “This is a paltry sum for a state like Illinois.” He proposed that instead the state should raise taxes on existing video gambling and license fees on existing casinos.

Kindt added that, while the U.S. Supreme Court cleared the way for legal sports gambling with a ruling last year, states could still face federal opposition from the Department of Justice.

Grace Hou, secretary of the Illinois Department of Human Services, said, “The state is prepared” to deal with “problem gambling,” in that sports gambling is not all that different from other forms of gambling when it comes to addiction. But she did ask that the state’s budget for treating gambling addicts be almost doubled, from $1 million to $1.9 million, in order to expand options ahead of legal sports gambling. “We want to be more proactive in reaching out downstate,” she said.

A panel of mayors said they’d welcome legal sports gambling. “We’re of course for it 110 percent,” said Mayor Kyle Hastings of Orland Hills. He drew parallels with the benefits local bowling alleys and bars had enjoyed with video gambling, saying it “has helped those businesses stay open.” But he warned the legislators to crunch the details and “try to do it right the first time … so we can be a model for the rest of the United States.”