A 2018 SCOTUS decision struck down a federal law forbidding state authorization of sports betting, Then lobbyists went to work.
Gambling companies and their allies deployed a bare-knuckled lobbying campaign, showering state lawmakers with money, gifts and visits from sports luminaries and at times using deceptive arguments to extract generous tax breaks and other concessions, according to a New York Times investigation. It was based on thousands of pages of documents and communications obtained in part through open-records requests and interviews with dozens of industry and state officials.
Industry lobbyists, for example, dazzled lawmakers with projections about the billions of dollars that states could expect to collect in taxes from sports betting — projections that, at least so far, have often turned out to be wildly inflated, according to a Times analysis of state tax data.
The gambling industry managed to scare state lawmakers into keeping tax rates low, in part by trotting out data about a sprawling underworld of illegal gambling. The Times found that those figures, which suggested that Americans were placing as much as $400 billion of illicit bets each year, were unreliable.
Where did the eye-popping figure come from? The N.B.A. and the American Gaming Association identified the source as a 1999 report by the National Gambling Impact Study Commission, which Congress created to assess the harms of gambling.
“Estimates of the scope of illegal sports betting in the United States range anywhere from $80 billion to $380 billion annually,” the report said.
In a footnote, the report attributed the range not to an academic study or even an industry analysis, but to an Associated Press article from the month before the report was released. That article, in turn, reported that “commissioners were told” the estimate, though it did not indicate by whom.
A transcript from a commission hearing in 1998 points to the likely source. One of the panel’s commissioners, citing unidentified testimony and staff briefings, said that “there’s somewhere, depending on whose guesstimate you take, within $80 to $380 billion worth of illegal sports gambling.”