Testimony

The Student Athlete Protection Act, H.R. 3575

Chairman Hyde, Representative Conyers, Representative Graham and other distinguished members of the committee, thank you for inviting me to testify before you today on a matter of concern to the NCAA and the larger higher education community -- gambling on college sports. I am pleased to be able to provide you with the perspective of the NCAA and the more than 1,000 college presidents and chancellors who serve as its members.

As college sports fans, our emotions are all tied up in the hopes and dreams of the young players who play college sports, coupled with the pride and respect we feel for our alma mater or home college team. We don't need anything more to enjoy these games -- gambling on the outcome of college games is not only unnecessary, it sells short the talent and hard work that the student-athletes bring to the games and has the potential to jeopardize the integrity of this American tradition. In my nine years as a president and chancellor, I have yet to hear genuine fans of intercollegiate athletics suggest that they support collegiate contests because they can bet on the outcome of the games.

Gambling on college student-athletes and the games they play, whether done legally in the sports books of Nevada or illegally in any other state, or on the Internet is a problem. Gambling on high school, college and Olympic sporting events should be prohibited in all states and greater efforts should be taken to enforce existing laws that ban gambling on the athletics success of our young people. On behalf of NCAA colleges and universities, athletics conferences and affiliated athletics organizations, I thank you for your work on the Internet Gambling Prohibition Act, H.R. 3125 and ask for the Committee's help in moving forward the Student Athlete Protection Act, H.R. 3575.

In 1992, the Professional and Amateur Sports Protection Act (PASPA) was signed into law by President Bush to prohibit gambling on most sporting events. PASPA exempted four states that already conducted, or had enacted legislation that permitted them to conduct, sports gambling within their jurisdiction. Nevada was the only state at the time and, continues to be the only state, where legal gambling on college and Olympic sporting events is conducted. Our collective instincts were right in 1992 and we should have completed the job then. We should have made sports wagering illegal in all 50 states. Now, eight years later, there has been a blurring of the line between legal and illegal sports gambling in this country. Sports gambling has become such a part of the glamour of Las Vegas that it is fairly safe to conclude that many do not know that gambling on college sports is an illegal activity in virtually every state in the U.S.

National Gambling Impact Study Commission -- Recommends Exemption be Eliminated

In June 1999, the National Gambling Impact Study Commission, comprised of bipartisan members appointed by the president and the leadership of the U.S. House of Representatives and U.S. Senate, issued their recommendations to Congress. Among the recommendations put forward by the Commission was that "betting on collegiate and amateur athletic events that is currently legal be banned altogether." In making this recommendation the Commission stated,

"Sports wagering threatens the integrity of sports, it puts student athletes in a vulnerable position, it can devastate individuals and careers."

We agree with the Gambling Impact Study Commission that legal gambling on college sports fuels the larger illegal sports gambling industry and should be discontinued.

Pending Legislation Closes a Loophole in 1992 PASPA Law -- Helps Protect the Integrity of College Sporting Events

H.R. 3575, the pending legislation, will remove any ambiguity associated with betting on college sports by making it clearly illegal to gamble on college games in every state. This will help curb the destructive and unseemly practice of gambling on the athletics success of our nation's young student-athletes. Nearly a billion dollars was bet legally in Nevada on college games last year. Although rare, the NCAA has experienced several high-profile, gambling-related incidents involving student-athletes in the last decade. The most significant of these scandals involved money wagered legally in Nevada casinos. As the amount of money legally wagered on college sports escalates, the pressures on student-athletes to provide inside information on the team for gambling purposes or to "shave" points and fix games is bound to increase as well. The pending legislation will close the loophole of the 1992 legislation, aid in preserving the integrity of college sporting events and assist in protecting student-athletes from pressures to influence the outcome of a game or contest.

While it is true that Nevada casinos have on one occasion been helpful in monitoring unusual shifts in wagering on college games, this hardly ensures protection from point-shaving scandals. In fact, recent point-shaving scandals have utilized Nevada sports books without being detected; the Northwestern University case is a prime example. A blanket prohibition on collegiate sports betting will reduce significantly the outlets available for placing wagers and, in doing so, will undoubtedly have an impact on the number of individuals gambling on the games. The fact is, even when the Nevada casinos helped identify the point-shaving activity, it was after the fact. We are fearful that the scandals identified by the Nevada sports books are only representative of a larger problem of legal wagers on "fixed" games that largely goes undetected. We are not aware of the Nevada sports books ever having prevented a college gambling scandal from occurring.

Publication of Point Spreads in Most Newspapers Contributes to Illegal Sports Wagering

According to the National Gambling Impact Study Commission report:

"One reason Americans may not be aware of the illegality of sports wagering is that the Las Vegas "line," or point spread, is published in most of the 48 states where sports wagering is illegal."

H.R. 3575 will eliminate any justification for the publishing of point spreads (betting odds) on college games in our nation's newspapers. In addition, a ban on all collegiate sports gambling may help curtail the widespread advertising of sports handicappers' services (associated with college football and basketball) in newspapers, magazines and on television. Point spreads contribute to the popularity of sports wagering. In short, a uniform prohibition will re-sensitize the public to the corrupting nature of this activity and encourage newspapers to follow the lead of the Washington Post, which voluntarily refuses to publish the betting line on college games. Furthermore, the gambling industry points to Internet gambling as the future source of point spreads. Congress' passage of the Internet Gambling Prohibition Act would have a significant impact on U.S. access to online sports gambling sites.

Nevada Prohibits Betting on Any of Nevada's Own Teams to Protect the Integrity of those Events

Nevada is currently the only state where collegiate sports gambling occurs. Proponents of Nevada sports books argue that regulated sports books pose little threat to the integrity of sports contests and that illegal sports gambling is the culprit. However, Nevada gaming regulations clearly recognize the potential danger that legal sports gambling presents. The regulations not only prohibit Nevada sports books from accepting bets on college athletics events that occur in the state, but they also prohibit gambling on any games of Nevada institutions played outside the state's borders. Inexplicably, this protection does not extend to any of the institutions located in the other 49 states.

On Feb. 11, the NCAA wrote to Steve DuCharme, Chairman of the Nevada Gaming Control Board. The letter specifically asked the Nevada Gaming Control Board to grant a request by a NCAA member college or university to have the institution's name removed from the betting boards at the Nevada sports books in much the same way the Nevada institutions were removed. In a March 20 response, the NCAA request was not granted. DuCharme merely said other institutions are afforded the same protections as Nevada's institutions because their home states don't allow betting on their own home teams. However, the letter failed to point out that other states, unlike Nevada, don't allow betting on any other states' teams either. With the ease of travel, the proximity of bettors to teams doesn't stop at a state line. For example, nothing prohibits someone from placing a $50,000 bet on a college game played outside Nevada and then attempting to pressure a student-athlete to influence the outcome of the contest. The same protections afforded Nevada teams should be provided to the teams of all states. In the case of Arizona State, more than $1 million was bet in Nevada on the game played in Arizona.

Legal College Sports Gambling Operations Provide Avenue for Illegal Sports Gambling Money Laundering

The legally and illegally wagered dollars on college sporting events are thought to be in the billions but no accurate data on the exact amount of illegal gaming on college sports is available. Complicating the matter is the money laundering of illegal sports book dollars through legitimate sports books. Steve DuCharme, Chairman of the Nevada Gaming Control Board, is quoted in a February 1999, Sports Business Journal article as saying:

"We've taken steps to crack down on the amount of illegal money begin laundered through legitimate sports books. We really have no way of knowing (how much is laundered through the legal sports books.) Based on transcriptions of wiretaps, it is millions of dollars."

These are clearly federal law enforcement issues, meriting a federal solution.

Discontinuation of College Sports Gambling Would Not Result in a Serious Threat to the Nevada Economy

Fears that this legislation will be a "serious threat" to the Nevada economy are not supported by the facts. In 1999, approximately $2.3 billion dollars was wagered in Nevada sports books. Casinos retained $99 million, a little more than 3.5 percent of the total amount wagered on sports. According to Steve DuCharme, chairman of the Nevada State Gaming Control Board, the amount kept by casinos on sports gambling is "very small" compared to other casino games. Furthermore, the amount wagered on college sports is only a little more then a third of the total. In an industry driven by billions of dollars, (1999 total casino revenues were $10.1 billion) the elimination of collegiate sports gambling will have little impact on state revenues or on the casinos' bottom line. The amount bet on college sports is only 3/10 of one percent of overall casino revenues. In the midst of record growth in the Nevada casino industry, the proposed legislation will have virtually no impact on jobs.

The existence of legal sports gambling in Nevada is actually limiting the growth of the Nevada economy in some areas. Most amateur and professional sports leagues have policies against franchise location and events staged in Nevada because of the presence of sports gambling.

College Sports Gambling Serves as a Gateway for Youth to Addictive Gambling Behavior --Youth Gambling Problem is a Concern

We are concerned that legal collegiate sports gambling fuels a much larger illegal collegiate sports gambling trade -- impacting America's youth at an alarming rate. Sports gambling is a serious problem among teen-agers under the age of 18. A recent Gallup Poll reports that teen-agers say they start betting on college sports at age 10 and bet on college sports at twice the rate of adults. Called "the addiction of the 90's" by the American Academy of Pediatrics -- their research indicates that there are more than one million U.S. teens that are addicted to gambling. A recent Harvard School of Medicine report estimates that 6 percent of teenagers under 18 have serious gambling problems. In a June of 1999 Gallup Poll, 18 percent of teen-age respondents said they had bet on college sports, contrasted with 9 percent of adults who wagered on college games. The National Gambling Impact Study Commission report calls sports wagering "a gateway behavior for adolescent gamblers." Prohibiting college sports gambling everywhere in the U.S. would send a clear signal that the activity is illegal. In addition, a federal prohibition would put an end to the mixed message to our young people, limit exposure and reduce the numbers of people who are introduced to sports gambling.

NCAA takes Concrete Steps to Address College Sports Gambling --Adopts No-nonsense Policies and Education Outreach Programs

The NCAA has not been sitting on the sidelines in confronting the sports gambling issue and has taken significant steps to address the very real problems associated with betting on college sports. The NCAA has established policies that prohibit all sports gambling by campus athletics personnel, student-athletes and NCAA employees. Student-athletes are not eligible to compete if they knowingly provide information to individuals involved in organized gambling activities concerning intercollegiate athletics competition; solicit a bet on any intercollegiate team; accept a bet on any intercollegiate team; accept a bet on any team representing the institution or participate in any gambling activity that involves intercollegiate athletics through a bookmaker, parlay card or any other method employed by organized gambling. Similar expectations apply to coaches, athletic directors and NCAA staff. Recently, the NCAA instituted background checks on men's and women' s basketball game officials. This was done to ensure that the game officials have not been involved in sports wagering issues. In addition, the NCAA sponsors: educational programs; works with campus administrators to conduct sports wagering workshops; broadcasts anti-sports-gambling public service announcements during our championship games aired by CBS and ESPN; has entered a partnership with the National Endowment for Financial Education to produce a booklet, "Don't Bet On It", to educate students about the dangers of sports gambling and to acquaint them with good financial management strategies and is working to develop research in the area of youth gambling and campus gambling.

The NCAA and its Membership Are Committed To Improving Student-Athlete Experience

Opponents of the pending legislation to prohibit gambling on college sports in all states criticize the NCAA for reaping profits from college sports while not investing more in gambling prevention programs. As mentioned above, the NCAA does support a number of programs that address the sports gambling issue. In addition, a portion of the NCAA's revenues fund programs such as the student-athlete assistance fund, graduate assistance fellowships, life skills education, clinics for disadvantaged youth and many other programs designed to support and enrich the college experience for student-athletes. The NCAA's 81 championship events for men and women at the Divisions I, II and III level are funded through the television rights revenues. However, the vast majority of NCAA revenues are returned to NCAA Divisions I, II and III member colleges and universities to help support their athletics programs. It costs $3.4 billion every year for our member schools to provide the more than 335,000 student-athletes with opportunities to play college sports. Even with the money generated by television and marketing rights fees, there still isn't enough money to pay the bill out of more than 970 programs, the number of athletics programs not being subsidized is smaller than 70. That said, the NCAA and its member schools continue to examine ways to provide student-athletes with more support and enrichment opportunities, including gambling related education, research and outreach activities.

States' Rights Concerns

Sports gambling already is a recognized federal issue with federal jurisdiction. In 1992, President Bush signed the Professional and Amateur Sports Protection Act (PASPA) (28 USC Section 3701 et seq.). PASPA prohibits the expansion of state-sanctioned, authorized or licensed gambling on amateur sports. In addition, because college sports gambling clearly has a substantial effect on interstate commerce, Congress has the authority to legislate in this area. Unfortunately, the 1992 PASPA legislation "grand-fathered" (i.e., exempted) several states (Nevada, Oregon, Montana and Delaware) that already conducted, or were contemplating, some form of amateur sports gambling within their respective jurisdictions. While PASPA created a federal law prohibiting states from sponsoring, operating, licensing, advertising or promoting college sports gambling activities, the "grand-fathered" states were allowed to continue to permit such gambling within their borders. The proposed federal legislation would eliminate the exemption for the above states as it relates to high school, collegiate and Olympic sports gambling. Furthermore, the position held by the gambling industry that one can bet on games of other states but protects their own state tramples on the rights of other states.

Legislation Proposed to Address Illegal Gambling on College and Amateur Athletics

We are aware of two other pieces of legislation pending before the Judiciary Committee that address sports gambling on amateur athletics events. These bills address illegal gambling on college and amateur sporting events. Both bills were introduced by Members of the Nevada congressional delegation following the introduction of H.R. 3575. Although the bills were intended by their sponsors to deflect attention away from the troublesome aspects of Nevada's legal sports books, there are aspects of the bills that warrant further discussion.

* "Combating Illegal College and University Gambling Act," H.R. 3800, was introduced on March 1, 2000 by Representative James Gibbons, R-NV. It calls for the Attorney General to establish a panel composed of Federal, State and local government law enforcement officials to conduct a study of illegal college sports gambling. In addition to the study, the panel is required to submit a report to Congress within one year with recommendations on what can be done, primarily by the NCAA, to combat illegal sports gambling on campuses. The study would examine the scope and prevalence of illegal gambling on college sports, enforcement of existing laws, and what colleges and universities are doing to combat illegal gambling on campus. The report to Congress would make recommendations on actions colleges and universities and the NCAA could take to address gambling on campuses, educational programs the NCAA could implement, Federal and State legislative actions that could be taken and other private sector actions that could be taken to address the issue of illegal gambling on college sports.

As I said earlier in this statement, gambling on amateur sports, whether done legally in the sports books of Nevada or illegally elsewhere, always has the potential to jeopardize the integrity of the events. The NCAA believes the best strategy to deal with the problems associated with college sports gambling is threefold: close the loophole that allows legal gambling to continue in Nevada, adopt legislation currently pending to prohibit gambling over the Internet and enforce existing laws regarding illegal gambling. This strategy, coupled with extensive efforts the NCAA is already undertaking to educate student-athletes and conduct research, will make a significant impact on this growing problem. To the extent that H.R. 3800 addresses the enforcement of existing laws, it is welcomed. In addition, one of the legislation's goals, to determine what factors influence attitudes about illegal gambling particularly among young people, could provide valuable information. As H.R. 3800 states, the NGISC only studied the impact of legal gambling activity in the United States. A study of the illegal industry would complement the findings and recommendations of the NGISC. However, H.R. 3800 totally ignores the role the U.S. Department of Education should play in studying youth gambling issues or in recommending education-related policy. Further, the study fails to examine the role of Nevada's sports books in promoting illegal sports gambling activity including through the illegal laundering of millions of dollars through the legal sports books and the publication of point spreads in newspapers across the country based on the Nevada betting line. If the Committee moves forward with this legislation, we urge you to amend it to include elements to make the study truly meaningful. Recommended changes are attached to this statement. * "Illegal Sports Betting Enforcement Act," H.R. 4284 was introduced on April 13, 2000 by Representative Shelley Berkley, D-NV. H.R. 4284 would authorize $3 million in the first year and $5 million for each succeeding year to fund a Justice Department Task Force to enforce existing Federal laws relating to amateur sports betting and contests. The task force would be charged with providing Congress with a report on violations of such laws on an annual basis. In addition, H.R. 4284 would increase penalties for violations of existing sports gambling statutes. Further, the bill would require the Justice Department to conduct a study on the extent to which minors are involved in illegal sports gambling activity. H.R. 4284 concludes with a "Sense of the Congress" proclamation primarily intended to direct the NCAA to "fix" the crisis that has arisen in the U.S. related to gambling on the athletics success of our young student-athletes. The NCAA supports all efforts to increase enforcement of existing federal and state laws related to gambling on amateur athletes. However, we are not in a position to know if penalties for violations of existing laws should be increased. A study of the extent to which minors are gambling would provide valuable information and would supplement research already provided by the American Academy of Pediatrics on the crisis that youth gambling has become. Unfortunately, H.R. 4284 takes the same approach as H.R. 3800 in thinking that the NCAA alone can reign in this massive and complicated problem. Both pieces of legislation, unfortunately, miss the point. More examination of the role the legal sports gambling industry plays in promoting the illegal side of the business would be time well spent.

Conclusion

Since being enacted in 1992, the Professional and Amateur Sports Protection Act has been successful in halting the growth of state-sponsored amateur sports gambling. But the beachhead that legalized amateur sports wagering continues to hold in Nevada casinos blunts efforts of the NCAA and higher education to combat college sports gambling. The insidious effect of legalized wagering on college sports has crept far beyond the Nevada state line. Even though sports gambling is illegal in nearly every state, point spreads on college games are published in newspapers across the country, bookies are common fixtures on college campuses and new technologies allow bets on college games to be placed over the Internet or in a casino in innovative ways. The dollars involved are big and escalating every year. By clearly making gambling on college sports illegal everywhere and all the time, we will strike a significant blow against an activity that threatens the integrity of college sport.

This nation's college and university system is one of our greatest assets. We offer the world the model for postsecondary education. Betting on the outcome of college sporting events tarnishes the integrity of sport and diminishes the esteem in which we, and the rest of the world, hold U.S. colleges and universities. For these reasons, the NCAA respectfully seeks your help in eliminating from the Professional and Amateur Sports Protection Act the exemption that allows the Nevada casino industry to operate collegiate sports-betting schemes and thereby to jeopardize the integrity of sport in America. While we recognize that a ban on collegiate sports gambling will not eliminate all gambling on college sports, it is a significant start. If we miss this legislative opportunity, the job of fighting illegal sports wagering elsewhere will be infinitely more difficult. The NCAA, and the colleges and universities that support this legislation, along with the leaders of the high school community, higher education, and the U.S. Olympic Committee have no monetary interest in the outcome of this legislation. Our goal is to protect student-athletes and remove the unseemly influences of sports gambling on our amateur athletes and the games they play. We look forward to working with you to close the gap that has not only allowed legal betting on college sports to continue but also fuels illegal betting on college games.