The Professional and Amateur Sports Protection Act (PASPA) had been in power for more than 25 years, until the Supreme Court of the United States abolished it, as a result of a lengthy and strenuous effort by the state of New Jersey.
PASPA aimed at putting a stop to sports betting, thus hampering the expansion of casinos and the gambling industry as a whole.
However, the states of Nevada, Delaware, Oregon, and Montana had been exempt from PASPA on accounts of their previous state laws that structured gambling. This exemption will now serve as a great example of the impact and the far-reaching consequences PASPA had on the US economy and how much was lost.
The Damage Caused By Illegal Gambling
Considering data from the American Gaming Association (AGA), illegal gambling stood at an estimated $40 billion in revenue in 1992 when PASPA was introduced. This number appears insignificant when compared to the $150 billion that AGA claims are the amount Americans now spend on illegal gambling per year.
According to the infographic below, more than 40 million Americans bet on US sports every year. The NFL alone attracts around $58 billion, not to mention the ample sum coming from the joint effort of the NBA, NHL, NCAA, and MLB.
If we take into consideration that $41.2 billion are today’s estimates of how much sports betting is said to bring, and out of which more than $4 billion is pure profit, we are now looking at more than $250 billion lost throughout 25 years.
Jobs Not Created Mean Lost Job Taxes
The growth of the sports betting industry is bound to attract other enterprises that generate a substantial income. The success of one area of business will bring about the growth of others.
Who stands to gain at large is the industry of service, mainly cafes and restaurants. The estimation of their surplus revolves around $7 billion, a sum to be reckoned with, especially if we know that sum could have been taxed if it hadn’t been for PASPA. The communities around the country found themselves on the losing end thanks to PASPA.
The number of direct and indirect jobs that could have been generated is close to 120,000, meaning that 120,000 salaries could have been taxed as well.
Furthermore, the individual states already take between 7% and 15% of betting taxes, but with the addition of sports betting, that sum will grow to approximately $3.5 billion a year. Also, on a federal level, the US stands to claim almost $5 billion per year. So, the tally stands at an additional $10 billion that could have been raked in over the past 25 years.
Unutilized Power Of The Advertisements
The evident bond between the world of betting and the world of advertisements seems to have lost the most during the years of PASPA. If we consider for a second the UK and Australia as nations exploiting the connection, we can see that they can gather just about $650 million together. This is nothing compared to $3 billion that await the US after the Supreme Court struck down PASPA.
The gambling industry investments into advertising industry amount to more than $600 million a year and provide a substantial breeding ground for other companies and industries to take part in the process and earn big.
All of these opportunities have been relinquished thanks to PASPA and its negative influence.
To sum it up, we can conclude that the US stands to win significantly from this change. The economy will be bolstered in so many ways that the impact will be almost instantaneous.
