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Originally published January 25, 2015 at 3:55 PM | Page modified January 25, 2015 at 9:40 PM

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Battle is on for legal slice of sports-gaming industry

With the Internet offering new betting avenues, governments have de-criminalizing gambling and even the NBA is openly supporting regulated sports betting.


Seattle Times staff reporter

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GLENDALE, Ariz. – Events such as the upcoming Super Bowl highlight just how popularized sports gambling has become.

The media here breathlessly recite Seahawks-Patriots game odds and updates injury reports sanctioned by a league that pioneered divulging such things — keeping bettors and bookmakers advised on potential game influencers.

Not to mention the oft-reported “proposition” bets on everything from what color “hoodie” Patriots coach Bill Belichick will wear, to how long Idina Menzel takes to sing the national anthem.

It all serves a sports-gaming industry in which an estimated $3.8 billion will be wagered on the Super Bowl. But only about $100 million will be bet legally.

And that’s why one of the biggest sports-business battles today isn’t over cable-television deals, merchandising rights or leveraging cities to pay for new stadiums. It’s for a legal slice of this country’s estimated $380 billion sports-gaming industry where today’s wagers are placed in dad’s office and grandma’s living room instead of in shady betting parlors.

“We have built a nation of gamblers,’’ says Arnie Wexler, a recovering compulsive gambler, author and certified counselor who runs a national hotline for gambling addicts. “The society in America today says it’s socially acceptable.’’

And for Wexler, who recently authored “All Bets are Off: Losers, Liars and Recovery from Gambling Addiction” it’s no longer a question of containing sports wagering. With the Internet offering new betting avenues, governments de-criminalizing gambling and even the NBA openly supporting regulated sports betting, Wexler concedes: “It’s going to be all over the place.’’

Most Americans don’t consider themselves lawbreakers when participating in office pools or making prop bets over their home computer. That’s because law enforcement focuses mainly on companies taking online sports bets and processing payments, not on individual gamblers.

Federal law prohibits taking sports wagers online, and only four states – Nevada the main one – allow sports betting in some form. But Geoff Freeman, president and CEO of the American Gaming Association, said current legislation isn’t enough to curb illegal sports gambling.

“We are concerned about areas where you have no regulation, you have no real oversight over the things that can happen in that area,’’ said Freeman, adding that only 1 percent of all U.S. sports gambling is done legally. “Things like money laundering, the crime associated with it. Things that really affect the perception of our industry.’’

It’s worth noting that Freeman’s organization represents the $240 billion U.S. casino industry, covering 1.7 million jobs. So, effective policing of illegal activity drives more gambling revenue to his members.

Avoiding U.S. jurisdiction is why online sports betting sites tend to be offshore. One of the bigger ones, Bovada LV, has its Internet domain registered in Latvia.

Bovada’s corporate predecessor, Bodog, was operated in Costa Rica and Antigua by Canadian billionaire Calvin Ayre -- loosely portrayed by Ben Affleck in the 2013 movie “Runner, Runner.” In 2007, Ayre licensed his Bodog.com U.S. online gaming business to a Mohawk group from a reservation outside Montreal.

That group rebranded in 2011 under the Bovada LV name.

But Ayre, who’d kept licensing the Bodog brand elsewhere, was indicted in 2012 on federal charges of processing $100 million in illegal online bet payments to U.S. customers. On his personal website, Ayre, living in London and fighting the charges, wrote: “I see this as abuse of the US criminal justice system for the commercial gain of large US corporations.’’

Those standing to gain include legal Las Vegas casinos represented by Freeman’s umbrella group. Freeman makes no apologies for wanting gambling done in a legal, regulated form.

“In general, it’s a good, safe form of entertainment for millions of Americans,’’ Freeman said.

He’s not alone in such thinking.

Washington has some of the country’s tougher gaming laws, but bills in the state House and Senate hope to de-criminalize participation in online fantasy sports leagues – as 40 states already have — by re-classifying them “contests of skill.” Fantasy-sports sites often avoid business in Washington, fearing prosecution.

In New Jersey, Gov. Chris Christie signed a bill authorizing sports betting at local casinos and racetracks. Even NBA commissioner Adam Silver penned a New York Times op-ed piece explaining why he wants Congress to allow all states to legalize, regulate and monitor sports betting.

Silver said betting happens anyway and a regulated version would increase the NBA’s popularity.

And as sports wagering becomes increasingly legalized, compulsive gambling counselor Wexler would like more help for addicts: everything from warning ads below newspaper betting lines to recovery treatment funded by gaming websites and government agencies.

“They’re all taking a piece of the action,’’ Wexler said. “But show me the ones that are responsible enough to help people that get hooked.’’

A great point sure to get more scrutiny once this massive industry is divvied up anew.

For now, the focus remains best described by renowned Seattle philosopher Marshawn Lynch.

It’s all ‘bout that action, boss.

Geoff Baker is a sports enterprise and investigative reporter who writes a column on sports business. Geoff Baker: 206-464-8286 or gbaker@seattletimes.com. On Twitter @GeoffBakerTIMES.



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