Impact of Legalized Sports Gambling on IHL Campuses and Students

At least 8 Institutions of Higher Learning (IHL’s) have formed partnerships with online sports gambling companies and another 12 have partnered with brick-and-mortar casinos to promote sports gambling to their students, alumni and fans.ⁱ In exchange, IHL’s have been promised millions of dollars in revenue.ⁱⁱ These arrangements follow a 2018 United States Supreme Court decision,ⁱⁱⁱ and the subsequent enactment of legislation legalizing commercial sports gambling in as many as 34 states and the District of Columbia.^iv Though state laws vary in some respects, all allow bets to be placed on commercial sporting events.  However, these partnerships are raising questions for many reasons, not the least of which concern the potential harm to students that the incentivizing of gambling may cause including gambling addiction, other mental health problems and the incurring of large debts many students are unable to pay.

The escalation of legalized sports betting has its origins in the 2018 Supreme Court decision in which the Court struck down as unconstitutional the Professional and Amateur Sports Protection Act (PASPA).^v The PASPA outlawed sports gambling in every state but Nevada with the purpose of safeguarding the integrity of sports.  In declaring the law unconstitutional, the Court wrote, “A more direct affront to state sovereignty is not easy to imagine.” ^vi At the time of the decision, though supported by the American Gaming Association^vii and the National Conference of State Legislatures,^viii some sounded alarms. The director of the sports law program at Tulane University opined that “{t}his is a dry constitutional issue about states’ rights, but it will likely change how we have viewed sports for the past 100 years.”^ix

On the heels of the Supreme Court decision, New Jersey, which had anticipated the outcome, acted the following month to pass a sports gambling law.^x Under the law, a person had to be 21 years old to place bets. In addition, the bill prohibited athletes, coaches, referees and “other persons with potential influence or access to non-public information regarding sporting events” from betting on sporting events overseen by the league in which they participated.  Also, the New Jersey law prohibited betting on high school or college sports taking place in New Jersey or involving New Jersey teams.^xi  Other state laws place no restrictions on gambling on in-state professional and collegiate teams,^xii nor on placing player proposition bets (wagers tied to an individual player’s performance or statistics and not to the outcome of a game) while in other states, such bets are illegal.^xiii

Generally, major IHL’s with many alumni and students are attractive to online sports gambling companies who acted promptly after the 2018 Supreme Court decision and changes to state laws to divert traditional casino customers, fantasy sports players and online gamers to online sports gambling.  For IHL’s, the revenue derived from these agreements is helping fill funding gaps that arose during the pandemic.

Among the first IHL’s taking advantage of the growing legalization of sports gambling was Michigan State University (MSU).  In January of 2022, MSU announced a multiyear exclusive partnership with Caesars Sportsbook, an online sports betting app.^xiv It is reported that the agreement is a 5-year deal worth $8.4 million to MSU.xv Under the partnership, Caesars provides online betters (including MSU students, alumni, and employees) certain exclusive perks such as VIP experiences through its loyalty program, promotional offers on its sports betting, and scholarships and internship opportunities for students pursuing careers in the sports industry.  MSU provides Caesars with some very high visibility naming rights to a new premium seating section at the MSU football stadium and to outdoor tailgating parties and signage at MSU football, basketball, and hockey games, among other advertising benefits.  According to MSU’s vice president and director of athletics, “The opportunity to partner with Caesars … will help enhance gameday experiences for Spartan fans and provide significant resources to support the growing needs of each of our varsity programs.”   According to a recent investigation by the New York Times, a member of the MSU negotiating team called the MSU/Caesars deal “the largest sportsbook deal in college athletics.”^xvi

In September 2021, Louisiana State University announced a seven-figure multiyear partnership with Caesars.^xvii Following the agreement, LSU sent a mass email communication to students and LSU employees, among others, encouraging them to “place your first bets (and earn your first bonus).”^xviii The email immediately caused a backlash as some students receiving the email were under 21 years of age, the legal gambling age in Louisiana.^xix

Perhaps the most controversial sports betting deal involving an IHL is the arrangement at Colorado University in which CU agreed to accept $1.625 million to promote sports betting on campus with the betting company agreeing to increase CU’s profits by paying an additional $30 every time anyone referred by CU downloads the company’s app and uses a CU promotional code to place a bet.^xx  The idea that an IHL is actively encouraging gambling by students to profit off of each bet placed is anathema to some.^xxi