NCAA Alters Rules in Wake of Supreme Court Unanimous Decision: Sports Betting Implications

ncaa logo100The NCAA has been working through monumental discussions surrounding its amateurism rules for some time now, and there has been a rising uproar in regards to the lack of fair compensation for student-athletes. Over the past year, the NCAA has faced questions of antitrust violations due to their rules and regulations, and in response, the college sports governing body has begun to implement new changes. As of July 1, individual states are permitted to begin applying their own legislation in regards to student-athlete compensation for their name, image, and likeness (NIL).

Supreme Court Decision

For the first time since 1985, the US Supreme Court ruled on the governance of college sports. In 1985, it was also an antitrust issue in the NCAA vs. the Board of Regents of Oklahoma University as the Supreme Court ruled that the NCAA could not restrict the number of times its member colleges were showcased on national television. This kicked off the explosion of media revenue that has taken us to this turning point today.

In the NCAA vs. Alston, a former West Virginia football player Shawne Alston challenged the “NCAA’s entire compensation framework” as anti-competitive and in violation of labor laws in the United States. On June 21, the Supreme Court ruled unanimously in favor of Alston and provided for an “incremental increase in how college athletes can be compensated.” This unanimous decision paves the way for NCAA member institutions to provide student-athletes with unlimited compensation as long as it is related to their education; this means that college athletes will still need to be enrolled as students.

Brett Kavanaugh, a Supreme Court justice, vehemently approved the decision stating that “the NCAA is not above the law.” He said that the amateur “labels cannot disguise the reality: the NCAA’s business model would be flatly illegal in almost any other industry in America.” Kavanaugh also matter-of-factly stated that “price-fixing labor is price-fixing labor” and any anti-competitive price-fixing labor is illegal under state and federal antitrust laws.

Name, Image, and Likeness Compensation

Athletes who attend schools in Alabama, Florida, Georgia, Kentucky, Mississippi, New Mexico, and Texas are now able to accept endorsement deals while the remaining states are working through legislation to accomplish the same goal. NIL compensation could provide a significant recruiting advantage for member institutions in states which have already approved the ability for student-athletes to be compensated for sponsorships, so it is expected that every state will ultimately follow suit in this effort to fairly compensate student-athletes.

NCAA president Mark Emmert stated that “this is an important day for college athletes since they all are now able to take advantage of name, image, and likeness opportunities. With the variety of state laws adopted across the country, we will continue to work with Congress to develop a solution that will provide clarity on a national level. The current environment — both legal and legislative — prevents us from providing a more permanent solution and the level of detail student-athletes deserve.”

Athletes are now permitted to monetize their social media accounts, sign autographs, participate in teaching camps and lessons, launch their own businesses, and take part in sponsored advertising campaigns. The NCAA will still prevent universities and colleges from directly compensating athletes and monetary pay still can’t be a part of recruiting efforts. There will also still be some restrictions in place on a state-by-state basis against involvement with alcohol, tobacco, gaming products, school logos, and copyright materials.

Sports Betting Ramifications

draftkings sportsbook mobile appCollege sports, particularly men’s football and basketball, generate millions upon millions of dollars in revenue every year. The NCAA’s insistence on maintaining the amateurism of student-athletes mostly stems from a desire to sustain control over that revenue. In 2018, the Supreme Court made a landmark decision to overturn the Professional and Amateur Sports Protection Act of 1992 – this laid a path for the implementation of online, mobile sports betting across the country. College sports have only become more profitable as a result of the growth of the sports betting industry.

Some states have prohibited gambling on college sports in an effort to prevent student-athletes from participating in illegal activities such as point-shaving or the illicit sharing of information. The NCAA website states clearly that in order “to protect the integrity of college athletics contests, NCAA regulations prohibit student-athletes from betting money on any sporting event (college, professional, or otherwise) in which the NCAA conducts collegiate championships.” However, now that student-athletes can be fairly compensated in the form of endorsement deals and payment for their NIL rights, it is unlikely they will be as incentivized to participate in these illegal sports gambling activities. In other words, student-athletes won’t have as much of a need to engage in illegal betting activities with their endorsement income providing the compensation they so clearly need and deserve.

Marc Edelman, an attorney and tenured law professor at the City University of New York, said that “the moment that the compensation the college athlete is able to bring in from sport exceeds whatever short-term monetary value they get from gambling activity, there ceases to be substantial risk from engaging in gambling activity. We’ve long since passed that inflection point in professional sports.” Therefore, there is good reason for optimism that collegiate sports betting could flourish in the wake of the legalization of compensation for NIL rights.

Edelman also said that he doesn’t think sports gambling will qualify under NIL rules, stating there won’t be “many athletes directly making money in the gambling area, or even endorsing gambling as long as gaming companies use only player names or team names and statistics and they refrain from using the pictures of the athletes, or the athletes as endorsers, there’s very likely not grounds for the athletes to claim name, image, and likeness infringement.”

I've been writing about sports for Lineups since the beginning of 2020 and on my own website since 2018. In May 2021, I graduated from the University of Michigan with a degree in sport management. As the United States embarks on an exciting journey towards the legalization of sports betting, I'm thrilled to have the opportunity to cover industry news, NFL and NBA odds, and more.

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