Editor’s Note: The following article represents the views of the author.
The launch of online sports betting in New York has once again brought to the surface a policy blunder that has permeated throughout the US.
Like a number of states, the law here includes betting restrictions surrounding our local teams.
College betting has been a topic of renewed reporting interest in recent weeks, so you may already know the basics. We’re going to dig beneath the surface, though, to explore the actual construction of the law and interrogate its current interpretation.
What exactly does the law say about NY college betting?
Here’s the restrictive language regarding in-state college betting in New York (PML 1367):
“Prohibited sports event” means a sport or athletic event in which any New York college team participates regardless of where the event takes place, or high school sport or athletic event. The following shall not be considered prohibited sports events: (i) a collegiate tournament, and (ii) a sports event within such tournament so long as no New York college team is participating in that particular sports event[.]
It’s going to take some effort to pick this passage apart, an early indication that it’s not as straightforward as it could be from a sentence-structure standpoint.
It is clear, however, that a “sports or athletic event” involving a New York team is off the board regardless of where they’re playing. We’ll get to the merits of that restriction later, but the language in this first sentence is pretty simple. When it comes to betting, Syracuse games are prohibited sports events.
This 2021 version removed another restriction related to college events played within the state of New York (regardless of the participants). That prohibition from 2013 no longer exists, a clear attempt to allow betting on things like NCAA tournament games at Madison Square Garden.
What about NCAA tournament futures?
Beyond that, though, things start to get complicated.
The first issue is that the term “event” carries a broad enough meaning that it could be interpreted to encompass an entire tournament. Is NCAA March Madness one sports event or a series of sports events?
The statutory definition of “sports event” does nothing to aid our understanding. And taking that first sentence alone, it’s tough to say for sure. Under a strict reading, participation from a New York team could taint the entire tournament from a betting perspective.
Policymakers were on top of this in 2021, though, adding a pair of carve-outs to clarify the intended meaning. You can see the before-and-after in the red-line version:
The amended provisions essentially say that (i) a college tournament is not a prohibited sporting event, nor are (ii) most games within that tournament — any that don’t involve a New York team directly. These exclusionary clauses seem to convey the notion that a tournament is a series of individual sports events.
So can New York sportsbooks post NCAA tournament futures markets for New York teams?
What’s the regulatory interpretation?
As it stands today, in-state college teams are fully off the board in New York.
Per a spokesperson for the New York State Gaming Commission, no futures bets can be placed on New York college teams. More bluntly, the official reinforced: “No wagers on New York teams are permitted.”
That’s clear enough, and operators have necessarily adopted these restrictions. Scanning the six active NY online sports betting apps, you won’t find a local futures market on any of them.
Sen. Joe Addabbo seemed to echo that interpretation in his recent conversation with TheLines: “You can bet on games taking place in New York, but not on New York teams, including when they’re in a bracket.”
So there you have it. The regulators and the key lawmaker behind the push to expand sports betting in New York are on the same page. According to the folks who make the rules, the rules don’t allow futures bets on New York teams.
Despite drafting a number of bills on the topic, however, this amended definition does not originate with Addabbo. These exclusions were injected by committee into the budget package prescribed by then-governor Andrew Cuomo.
What’s my interpretation?
The fact that this new language even exists seems to undermine the regulatory interpretation.
If the former and current law both prohibit all betting on New York colleges, then these changes were unnecessary. And the law is several lines too long. The relevant portion of the definition could simply read: “‘Prohibited sports event’ means a sport or athletic event in which any New York college team participates.”
At most, lawmakers could have justified adding the Section (i) exclusion to clarify that a collegiate tournament is not a prohibited sports event. That addition does help communicate that participation by a New York team should not preclude operators from taking bets on that tournament. It doesn’t fully address the specific question of futures bets on New York teams, but it does work to separate the tournament as a whole from the games within that tournament.
To my eyes, this separation reflects legislative intent.
Section (ii) furthers that separation by adding an additional carve-out for tournament games that do not involve a New York team. Except in the case of the championship game, this is different than betting on the result of the tournament itself.
Just read the words on the page
Now… think this through.
If the author just finished telling us that we can’t bet on events involving New York college teams but we can bet on the tournaments in which they participate, why did they add this extra clause? Under the current regulatory interpretation, it simply repeats the same thing all over again.
And if the tournament futures contemplated in Section (i) are subject to an overarching prohibition from the previous sentence, then why did the author feel the need to add “so long as no New York college team is participating in that particular sports event” to Section (ii)? It would have already inherited that qualifier.
Despite dissecting every word and punctuation mark in this section, none of these logical exercises are necessary.
Under a simple, plain reading of the law, a college tournament is not a prohibited sports event. Or to restate that more directly: Any statutory definition of “prohibited sports event” does not apply to the NCAA tournament. Nor does it apply to games (the “sports events within such tournament”) that don’t involve a New York team.
It’s ultimately up to regulators to determine which markets to allow, of course, but these futures should be on the betting menu in New York.
What does New Jersey say about tournament betting?
It’s also worth looking across the river to see how New Jersey handles college betting.
The Garden State was the first in the US to pass a single-game sports betting law with college restrictions, and those provisions have become the dented pan by which policy in other states often comes out of the oven misshapen.
Here’s the relevant language from the NJ sports betting law:
“[P]rohibited sports event” means[…] a sport or athletic event in which any New Jersey college team participates regardless of where the event takes place. A “prohibited sports event” does not include the other games of a collegiate sport or athletic tournament in which a New Jersey college team participates[…]”
You won’t find Rutgers anywhere on the board in New Jersey. And once again, it’s difficult to get a perfect sense of the law’s position on in-state college futures.
Unlike the language in New York, however, this definition does seem to include the tournament itself as a “sport or athletic event.” A Rutgers future could therefore more logically be seen as an illegal wager on a prohibited event.
It’s worth mentioning that lawmakers in New Jersey have tried unsuccessfully to remove these restrictions from the code via referendum.
Oh, there is just one more thing…
Even though online sports betting became law in New York in mid-2021, we can draw an additional inference from a bill filed months later with no real chance of passage.
In his proposed language for SB 7536, Sen. Addabbo seeks to further modify this definition by adding the phrase “Notwithstanding the foregoing” before the exceptions in Sections (i) and (ii).
In other words: “Regardless of what I just said…”
That small change would further separate college tournaments from the games within those tournaments — and from the definition of a prohibited sports event.
And to me, it’s another indication of the legislative intent to allow these in-state futures markets.
College restrictions incompatible with tournament play?
It’s useful to consider a number of scenarios for these tournament futures markets, then run them through the language of the law to see how they’d play out under the current interpretation.
Let’s look at some possibilities with Syracuse standing in as our New York team:
- Syracuse makes the NCAA tournament
- Syracuse makes the NCAA championship game
- Wins the game
- Loses the game
Scenario #1 is mostly irrelevant to sports betting in New York.
Whether or not Syracuse makes the tournament, bettors can wager on the national champion. They can also wager on all tournament games that don’t involve Syracuse (or another New York team). Those amended provisions are pretty clear, apart from the present question about in-state futures.
Scenario #2 is where things get interesting.
What happens to bets on the championship game?
Disallowing tournament futures for New York teams presents a problem if they advance to the championship game. At that stage, futures tickets surrounding March Madness betting essentially become single-game wagers on the outcome of a prohibited event.
This would leave operators in a tricky spot that may require them to settle or void tickets according to house rules.
They can’t be voided, of course, else any bet on a New York team would be guaranteed to either lose or be canceled. Sportsbooks would likely need to pay out these hypothetical Syracuse futures tickets as winners prior to the game. But then the Final Four game before it becomes the same type of pseudo-single-game bet. And so on.
And this problem doesn’t just affect the team from New York.
Under the current interpretation, what happens to tickets for Syracuse’s opponent in the championship game? Let’s say it’s a chance for retribution against Kentucky. Whether you’re holding a futures ticket for Syracuse (currently not allowed) or Kentucky (allowed), the outcome of your legal wager is now being decided by a game on which betting is prohibited.
Operators could in this case be forced to pay those Kentucky futures too, regardless of the final outcome.
A better approach to college betting
There is, of course, a simple fix for the confusion surrounding college betting restrictions: Remove them.
Of the 30 states with legal sports betting, at least 19 have laws that restrict college betting in one way or another. The District of Columbia does, too.
Some of these restrictions are narrower, prohibiting things like prop bets on individual players. But 11 jurisdictions, including New Jersey, use language that is at least as restrictive as New York’s. And one — Oregon — prohibits college sports betting altogether.
Stakeholders have tried to warn officials against this tack. Here’s William Hill CEO Joe Asher in January 2018, engaging New York lawmakers directly:
If legal bookmakers cannot offer betting on major college sports, it will be very difficult to migrate customers from the black market. You can’t expect customers to bet in the legal market when their illegal bookie is the only one to offer betting on Syracuse basketball. Betting on major college sports is essential to our ability to compete with the black market and maximize revenue to the state.
Policymakers often trumpet these same talking points about bringing sports gambling out of the shadows and into the protective spotlight of regulation. And yet, many of these same folks also believe that betting on college sports is best left to unregulated offshore websites, neighborhood bookmakers and nearly every other legal market in the country.
If regulation is indeed the best tool to safeguard the integrity of sports and gambling, why does that reasoning not apply to local college games and our own student-athletes?
Logically, practically, and for the sake of integrity, prohibition is not the path forward for regulated betting in the US — not for professional sports, and not for college sports either.