Purdue Fans, Don’t Bet the Under: Legality of Purdue University’s Sports-Wagering Policy
Source: https://flic.kr/p/LhK2B
By Benjamin Kurrass*
With the college football season in full swing, fans of the Purdue University (“Purdue”) Boilermakers were hoping for an upset over the 17.5-point favorites Iowa Hawkeyes on Saturday, October 19.[1] Some Boilermaker supporters might have wanted to wager on the upset for the Boilermakers.[2] However, for the students, faculty, and staff of Purdue, wagering on their Boilermakers could have led to some serious consequences.[3]
On Thursday, October 10th, the Board of Trustees of Purdue approved a “sports wagering policy” across all campuses in Indiana.[4] This policy bans faculty, staff, and non-athlete students from gambling on sporting events involving any Purdue teams, coaches, and student-athletes.[5] If found in violation of this policy, students could be subjected to expulsion while faculty and staff could be terminated from their employment.[6] However, since May of 2019, sports wagering has been legal in Indiana.[7]
Sports wagering policies similar to Purdue’s policy are rare across the United States, with only two other universities, both in the Philadelphia metropolitan area, adopting similar policies, St. Joseph’s University and Villanova University.[8] However, Purdue’s policy is the first to be adopted by a publicly funded university, which raises questions about the extent a university can regulate their student body and faculty in the face of contrary state law.[9]
Rise of Sports Wagering Nationally and in Indiana
In 1992, President George H.W. Bush signed into law the Professional and Amateur Sports Protection Act (“PASPA”) which disallowed states from regulating and collecting taxes on sports gambling.[10] Recently, PASPA has been effectively “killed” with the decision of the United States Supreme Court in Murphy v. National Collegiate Athletic Association in 2018.[11] The Supreme Court determined that Congress had overstepped its constitutional authority by dictating the legislative process of the states.[12] As such, the states now have the ability to enact, regulate, and tax sports wagering through their own legislatures.[13]
Various states sought to capitalize on sports wagering with the overturning of PASPA, including Indiana.[14] On May 8th, 2019, Indiana Governor Eric Holcomb signed into law HB1015 which authorized sports wagering both in brick-and-mortar locations and through mobile applications.[15] Governor Holcomb’s motive behind the legislation was to “spur positive economic growth” and generate “new revenue and create hundreds of new jobs.”[16] Since the passage of the bill, Indiana has seen $35.2 million wagered on sporting events with the state collecting $813,103 in tax revenue for the month of September.[17] These figures are sparking calls for the expansion of sports wagering in other states, such as Illinois.[18]
Purpose and Operation of University “Sports Wagering” Policies
Purdue approved the “sports wagering” policy with the goal of protecting their student-athletes from being exposed to pressure by the faculty, staff, and their fellow students.[19] The Board of Trustees was worried that professors, in exchange for academic benefits, would ask a student-athlete to lose a game on purpose, provide inside information, or harass a student-athlete for a lost bet.[20] Purdue also wanted to protect student-athletes from other students seeking insider information.[21] The University was worried sports wagering could lead to situations where “a football player who’s in a [student] group” with other students could get asked “how’s your arm doing? Or, how is your injury?” and the football player be placed in the position to decide whether “they are asking [the football player] that because they want to place a bet on [the football player]?”[22]
The policy would impose a variety of punishments for students, faculty, and staff if the individual is found to be in violation.[23] Students would be subjected to a sliding scale punishment system, similar to what most schools use for non-academic misconduct such as university alcohol policies.[24] Depending on the extent and number of occurrences of the violation, punishment for students would range from academic reprimand to the possibility of expulsion.[25] For faculty and staff found in violation of the policy, there is the potential for termination of their employment with the university.[26]
After the Murphy decision, similar policies arose at Villanova University and St. Joseph’s University.[27] The Villanova University policy states that all “faculty, staff and students, who are 21 years of age or older, are not permitted to wager on any athletic event (e.g., practice) or contest in which a Villanova University athletic team or student-athlete participates in.”[28] Violation of this policy would result in “disciplinary action in accordance with the applicable University procedures that implement sanctions for students, faculty, and staff.”[29] St. Joseph’s University utilized similar language in their policy, with the ultimate goal to foster a stronger community university-wide by disallowing the negative influences of gambling, such as peer pressure on student-athletes to perform by their fellow students and professors.[30] These policies represent a growing concern among universities of the negative influence of sports gambling on campuses and the university community.[31] However, while the intention of the universities’ policies are beneficial for students, questions arise over the legality of disallowing an activity deemed legal by the state legislatures, especially for public universities.[32]
The Future of “Sports Wagering” Policies
Two main issues come to mind when looking at sports wagering policies such as Purdue’s policy: (1) the logistical hurdle to implement and enforce the policy, and (2) the possibility of legal challenges which could undermine the policy.[33] Both issues could lead to the ineffectiveness of sports wagering policies as well as lead to the possibility of such policies being overturned due to legal issues.[34] Logistically, enforcement of the sports wagering policy would require Purdue to utilize a massive amount of resources.[35] Purdue would be required to monitor internet activity of all students, faculty, or staff to ensure no wagers are placed on their sports teams, since wagers made on non-university teams are acceptable.[36] Further, many of the user accounts are run through casinos and online sportsbooks, who would be very unlikely to assist Purdue in providing customer names and the wagers which their customers have placed.[37]
Being a public university, Purdue could become front and center of potential legal challenges against the sports wagering policy, as an argument could be raised by students, faculty, and staff that “banning a legal activity violates First Amendment freedoms.”[38] Treatment of sports wagering policies could receive similar legal challenges as campus free-speech zones, which have begun to be abolished across universities nation-wide.[39] These “free-speech zones” designate a location on a university whereby administrators allow students to exercise their free-speech rights without interrupting campus activities or the daily community of the campus.[40] Similar challenges can be raised by legal advocates for sports gambling.[41] However, these advocates would have to overcome the Supreme Court’s rejection of the “right to gamble” established in United States v. Edge Broadcasting Co..[42]
The future of sports gambling does not seem to be slowing down anytime soon.[43] Therefore, as more policies are implemented at universities across the country, the likelihood of a legal challenge will only continue to grow.[44] The next legal battleground surrounding sports wagering will move away from the legalization by state legislatures of casinos and sportsbooks, instead focusing on the private ordering between universities and the individuals associated with the university.[45]
*Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2021, Villanova University Charles Widger School of Law
[1] See Odd’s Shark, https://www.oddsshark.com/ncaaf/purdue-iowa-odds-october-19-2019-1116197 (last visited Oct. 17, 2019) (stating spread of Purdue Boilermakers versus Iowa Hawkeyes college football game as of October 17, 2019).
[2] See Andrew Clark, Indiana sportsbook accepted $35.2M in bets during first month of legal sports gambling, data shows, Indianapolis Star (Oct. 11, 2019), https://www.indystar.com/story/sports/2019/10/11/indiana-sports-gambling-data-september-2019/3945010002/ (finding prominence of sports wagering in Indiana after legalization of sports wagering with $20.7 million bet on football in September).
[3] See Dave Bangert, Purdue bans campus bets on Boilermaker sports, as legalized gambling takes hold, Lafayette Journal & Courier (Oct. 11, 2019), https://www.jconline.com/story/news/2019/10/10/purdue-bans-campus-bets-boilermaker-sports-legalized-gambling-takes-hold/3917747002/ (outlining sports wagering policy of Purdue which would cover “more than 63,000 students, 19,000 faculty and staff members, plus contractors at the West Lafayette, Purdue Northwest and Purdue Fort Wayne campuses”).
[4] See id. (recognizing approval of sports wagering policy by Purdue Board of Trustees to be applied to Purdue’s West Lafayette, Fort Wayne, and Purdue Northwest campuses).
[5] See Michael McCann, Why Purdue Faces Major Obstacles Legally, Logistically in Sports Betting Ban, Sports Illustrated (Oct. 10, 2019), https://www.si.com/gambling/2019/10/10/purdue-sports-betting-ban-students-faculty-legal-fallout (noting sports wagering policy will apply to faculty, staff and students of Purdue across all University campuses).
[6] See Paul Caron, Purdue Bans Faculty, Staff, and Student From Gambling on Boilermaker Games, TaxProf Blog (Oct. 15, 2019), https://taxprof.typepad.com/taxprof_blog/2019/10/purdue-bans-faculty-staff-and-students-from-gambling-on-boilermaker-games.html (“Faculty and staff violators of the rule would face discipline up to and including termination . . . . sanctioning guidelines [are in development] for non-athlete students who are found to being violation of this policy.”).
[7] See Bangert, supra note 3 (“The Indiana General Assembly legalized sports betting in 2019.”).
[8] See Andrew Maykuth, At two Philadelphia universities, you can bet on sports, but not on the home team, Philadelphia Inquirer (Oct. 12, 2019), https://www.inquirer.com/business/philadelphia-universities-villanova-saint-josephs-ban-some-sports-betting-20191012.html (finding Purdue is not first university to impose sports-wagering ban on students, faculty, and staff of universities, with Villanova University and St. Joseph’s University imposing similar policies).
[9] See McCann, supra note 5 (stating issues Purdue could face both legally and practically in imposing their sports wagering policy).
[10] See A.J. Perez, What it means: Supreme Court strikes down PASPA law that limited sports betting, USA TODAY Sports (May 14, 2018), https://www.usatoday.com/story/sports/2018/05/14/supreme-court-sports-betting-paspa-law-new-jersey/440710002/ (stating history of PASPA and purpose of act).
[11] See id. (finding end of PASPA regulation with decision of Supreme Court in Murphy).
[12] See Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S.Ct. 1461, 1478 (2018) (“The PASPA provision . . . violates the anticommandeering rule. That provision unequivocally dictates what a state legislature may and may not do.”).
[13] See id. at 1484-85 (“[E]ach State is free to act on its own. . . . PASPA ‘regulate[s] state governments’ regulation’ of their citizens . . . The Constitution gives Congress no such power.”).
[14] See McCann, supra note 5 (stating Indiana is one of thirteen states to have legalized sports betting in the United States).
[15] See Kailin Lange, Holcomb signs bill legalizing sports betting, allowing lucrative casino industry changes, Indianapolis Star (May 9, 2019), https://www.indystar.com/story/news/politics/2019/05/08/governor-holcomb-signs-bill-legalizing-indiana-sports-betting-allowing-terre-haute-casino/1128554001/ (stating passage of HB1015 by Governor Holcomb signing it into law); see also Ind. Code § 4-33 (2019) (codifying amendments made to Indiana law with passage of HB1015).
[16] Lange, supra note 15 (quoting Governor Holcomb in statement announcing signing of HB1015).
[17] See Mitchell Armentrout, While Illinois sports betting stalls, Indiana reaps $813K in one month of tax revenue – money ‘we’re not getting’, Chicago Sun-Times (Oct. 10, 2019), https://chicago.suntimes.com/2019/10/10/20908766/illinois-sports-betting-indiana-launch-tax-revenue-gaming-baord (stating revenue figures of Indiana gambling institutions and revenue generated in taxes for Indiana from legalized sports wagering).
[18] See id. (“Public comments on sports betting . . . indicated Illinois casinos, racetracks and average Joe bettors are eager to get the action moving here.”).
[19] See Trevor Peters, Purdue Bans Faculty and Students From Betting on Boilermaker Sports, WLFI (Oct. 11, 2019), https://www.wlfi.com/content/news/Purdue-bans-faculty-and-students-betting-on-Boilermaker-sports-562718161.html (finding purpose of policy is to discourage students, faculty, and staff from placing pressure on student-athletes).
[20] See Marc Edelman, Purdue Is Correct to Ban Faculty Members From Betting on Boilermakers Sporting Events, Forbes (Oct. 11, 2019), https://www.forbes.com/sites/marcedelman/2019/10/11/purdue-university-is-correct-to-ban-faculty-members-from-betting-on-boilermakers-sporting-events/#73c09a111546 (detailing possible circumstances which Board of Trustees sought to discourage with implementation of sports wagering policy).
[21] See Peters, supra note 19 (noting purpose of sports wagering policy focusing on limiting negative influences from students seeking information to advance their wagers).
[22] Id. (quoting Noah Scott, member of Board of Trustees, speaking for student-athletes).
[23] See McCann, supra note 5 (acknowledging policy would be applicable to students, faculty, and staff of Purdue).
[24] See id. (finding while guidelines for violation of sports gambling policy are not finalized, would operate similar to non-academic misconduct punishment system).
[25] See id. (stating range of punishments which could be available for violation of sports wagering policy).
[26] See id. (noting applicable punishments for those faculty and staff found in violation of sports wagering policy).
[27] See Maykuth, supra note 8 (describing sports wagering policies that emerged in two Philadelphia universities after Supreme Court’s decision in Murphy).
[28] Villanova University, Sports Wagering Restrictions, Villanova Univ. Dept. of Athletics (Nov. 12, 2018), https://villanova.policytech.com/dotNet/documents/?docid=1246&public=true.
[29] Id.
[30] See Maykuth, supra note 27 (“Allowing St. Joseph’s University students, faculty, staff, contractors, and members of the Board of Trustees to gamble on the performance of university student athletes or staff members runs contrary to the sense of community that is so critical to the university.”).
[31] See id. (noting policies were adopted to respond to state and federal treatment of sports wagering and to apply policy utilized by NCAA for student-athletes to all students, faculty, and staff of universities).
[32] See id. (acknowledging universities, especially public universities, who adopt policies similar to Purdue, could become targets of legal challenges).
[33] See McCann, supra note 5 (describing two issues, legally and logistically, for which Purdue’s policy on sports wagering could be undermined).
[34] See id. (determining ramifications of logical and legal issues which could confront Purdue’s sports wagering policy).
[35] See id. (describing resources required such as surveillance of university servers).
[36] See id. (recognizing difficulty of Purdue to not only monitor university servers but determine that wagers made on university servers are not on Purdue athletes or athletic teams).
[37] See id. (“The university is also unlikely to gain cooperation from casinos and retail sportsbooks to voluntarily turn over customer files.”).
[38] See Maykuth, supra note 8 (“[P]ublic universities might find themselves targeted by legal advocates who could argue that banning a legal activity on campus violates First Amendment freedoms.”).
[39] See Jeremy Bauer-Wolf, The Death of College Free-Speech Zones, Inside Higher Ed (Feb. 2, 2018), https://www.insidehighered.com/news/2018/02/02/experts-states-likely-keep-abolishing-free-speech-zones (stating universities current amending of university free-speech zone policies as to comply with legal challenges against university of infringing on student’s First Amendment rights).
[40] See id. (“[Free-speech zones] are where administrators expect students to exercise their free-speech rights to avoid interrupting the campus flow.”).
[41] See McCann, supra note 5 (“Campus speech codes at public universities have been the subject of litigation on grounds of the First Amendment. . . . It’s plausible that a similar argument could be raised against Purdue’s sports betting ban.”).
[42] See id. (citing United States v. Edge Broad. Co., 509 U.S. 418, 426 (1993) (holding U.S. citizens do not have constitutional right to gamble)).
[43] See Rey Mashayekhi, Inside the Battle for the Future of Sports Betting, Fortune (Apr. 10, 2019), https://fortune.com/longform/sports-betting-battle/ (discussing expanding growth of sports betting, with major sports leagues agreeing to partnerships with MGM Resorts and NFL agreeing to deal with Caesars Entertainment).
[44] See McCann, supra note 5 (“It will be interesting to see if other schools in states with legalized sports betting adopt such policies. If they do, and if they are public universities, the likelihood of a legal challenge will rise.”).
[45] See Mashayekhi, supra note 43 (recognizing sports betting is not “a winning battle at this point” due to twenty-two states which already have sports-betting bills pending, and many major sports leagues considering allowing sports betting).
