Dropping the Ball: How the Growth of Legalized Sports Betting Threatens the NIL Rights of Collegiate Athletes

Authors

Peter Klensch

Document Type

Note

Abstract

(Excerpt)

One of the more storied runs in college basketball history happened in 2014 when the seven-seeded University of Connecticut Huskies (“UConn”) made the Final Four and defeated the University of Kentucky Wildcats to win the Division I Men’s College Basketball Tournament. As the second-lowest seed ever to win the Tournament, the focus should have been on UConn’s celebration in Storrs, Connecticut. Instead, the national media was drawn to comments made by UConn’s star point-guard, Shabazz Napier, who said that he sometimes went to bed “starving.”

The remarks caught the immediate attention of state legislators in Connecticut. Representative Matthew Lesser said, “he’s going to bed hungry at a time when millions of dollars are being made off of him. . . . This isn’t a Connecticut problem. This is an NCAA problem . . . .” The National Collegiate Athletic Association (“NCAA”) is a money-making behemoth, generating $1.15 billion in revenue in 2021 alone, and annually signing multi-billion-dollar television deals for its two major sports, Division I men’s basketball and football. While Shabazz’s remarks were not the first to be made about the disparity between college players and their institutional overlords, the comments brought the issue of paying college athletes back to the national forefront. Two other college athletes, Shawne Alston and Justine Hartman, were soon to make noise of their own by challenging the NCAA in a landmark antitrust lawsuit. The impact of NCAA v. Alston, which barred the NCAA from restricting education-related benefits for student-athletes, and the surrounding state name, image, and likeness (“NIL”) laws have created a brand new market for student-athletes to receive endorsements and benefits outside the confines of the university.

At the same time, another groundbreaking legal decision flipped the sports world on its head. In Murphy v. NCAA, the Supreme Court lifted the ban on state-legalized sports betting; states were now free to enact their own individual sports betting laws. Since June 2018, more than $186 billion has been wagered on sports, including $8.5 billion on the 2019 Division I Men’s NCAA Tournament alone. As the sports betting industry continues to grow and become more accessible to the everyday fan, so too does it widen its reach into college sports and to the athletes themselves. But, what happens when sports betting companies begin to endorse college athletes?

This Note will address the fallout of the Supreme Court’s recent decision in Alston, state NIL laws, the legal gray area they have created, and their intersection with the growth of legalized sports betting in the United States. To protect student-athletes and avoid disrupting the competitive nature of the NCAA, this Note will argue for legislative and institutional action to limit players from entering into endorsement contracts, specifically with casinos, sports betting companies, or gambling-related entities. Part I of this Note will explore the history of amateurism and competition in college sports and the legal history of sports betting. Part II will examine antitrust lawsuits against the NCAA, the Alston ruling, the impact of NIL laws, and the specter of sports gambling that hangs over these legal decisions. Finally, Part III will highlight potential solutions, specifically congressional proposals and NCAA action.