[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
CHALLENGES FACING AMATEUR ATHLETICS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
COMMERCE, TRADE, AND CONSUMER PROTECTION
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 13, 2002
__________
Serial No. 107-85
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2002
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma BART GORDON, Tennessee
RICHARD BURR, North Carolina PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia BART STUPAK, Michigan
BARBARA CUBIN, Wyoming ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois TOM SAWYER, Ohio
HEATHER WILSON, New Mexico ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi TED STRICKLAND, Ohio
VITO FOSSELLA, New York DIANA DeGETTE, Colorado
ROY BLUNT, Missouri THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia BILL LUTHER, Minnesota
ED BRYANT, Tennessee LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Commerce, Trade, and Consumer Protection
CLIFF STEARNS, Florida, Chairman
NATHAN DEAL, Georgia EDOLPHUS TOWNS, New York
Vice Chairman DIANA DeGETTE, Colorado
ED WHITFIELD, Kentucky LOIS CAPPS, California
BARBARA CUBIN, Wyoming MICHAEL F. DOYLE, Pennsylvania
JOHN SHIMKUS, Illinois CHRISTOPHER JOHN, Louisiana
JOHN B. SHADEGG, Arizona JANE HARMAN, California
ED BRYANT, Tennessee HENRY A. WAXMAN, California
STEVE BUYER, Indiana EDWARD J. MARKEY, Massachusetts
GEORGE RADANOVICH, California BART GORDON, Tennessee
CHARLES F. BASS, New Hampshire PETER DEUTSCH, Florida
JOSEPH R. PITTS, Pennsylvania BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska JOHN D. DINGELL, Michigan,
W.J. ``BILLY'' TAUZIN, Louisiana (Ex Officio)
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Aguirre, Michael, NCAA Division 1, Student-Athlete Advisory
Committee.................................................. 46
Berkley, Hon. Shelley, a Representative in Congress from the
State of Nevada............................................ 7
Fahrenkopf, Frank J., Jr., American Gaming Association....... 35
Huma, Ramogi D., Chairman, Collegiate Athletes Coalition..... 41
McMillen, Tom, The Knight Commission on Intercollegiate
Athletics.................................................. 40
Osborne, Hon. Tom, a Representative in Congress from the
State of Nebraska.......................................... 11
Saum, William S., Director of Agent, Gambling and Amateurism
Activities, National Collegiate Athletic Association....... 30
Material submitted for the record by:
Lennon, Kevin, Vice-President for Membership Services,
National Collegiate Athletic Association................... 69
Major League Baseball, National Basketball Association,
National Football League, National Hockey League, letter
dated February 11, 2002, to Hon. Cliff Stearns and Hon.
Edolphus Towns............................................. 72
(iii)
CHALLENGES FACING AMATEUR ATHLETICS
----------
WEDNESDAY, FEBRUARY 13, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Commerce, Trade,
and Consumer Protection,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:30 a.m., in
room 2322, Rayburn House Office Building, Hon. Cliff Stearns
(chairman) presiding.
Members present: Representatives Stearns, Shimkus, Bryant,
Pitts, Terry, Towns, John, Gordon, and Rush.
Staff present: Ramsen Betfarhad, policy coordinator,
majority counsel; Brian McCullough, majority counsel; Jon
Tripp, deputy communications director; Will Carty, legislative
clerk; Brendan Delany, staff assistant; and Bruce M. Gwinn,
minority counsel.
Mr. Stearns. Good morning, the Subcommittee on Commerce,
Trade, and Consumer Protection will start. One of our witnesses
is on her way, Shelley Berkley, the Congresswoman from Nevada.
Today, we are examining the challenges facing amateur
athletics. As my colleagues are aware, the committee has
jurisdiction over sports, in general, and as such will conduct
oversight to identify issues that require committee attention.
This hearing will focus on, but is not limited to, several
issues identified as relevant to amateur athletics. The
Knight's Foundation Commission on Intercollegiate Athletics
issued a report in June 2001 in which it identified many issues
it considered problematic for the health of amateur sports at
the highest level, collegiate sports. The report was written in
the context of the impact and relevance of collegiate sports
relative to the intent and purpose of higher education.
However, the issues are relevant to most amateur sports and
therefore provide an appropriate starting point for the
committee's inquiry.
Among the issues the Knight Commission Report identifies
that it views as problematic, witnesses have been asked to
address the commercialization of collegiate sports and its
impact. Additionally, two other issues that have been addressed
by previous Congresses are gambling and student athlete
welfare.
I especially want to thank my good friend, Mr. Towns, our
distinguished ranking member for his work on behalf of the
welfare of student athletes. Commercialization lends itself to
the so-called ``big time'' college sports of football and men's
basketball. The Commission believes that the popularity of
college sports has attracted more and more money which, in
turn, increases the pressure to win at all costs. The pressure
leads to abuse in violation of the rules to the detriment of
the student athletes and the institutions.
The report identifies television contracts, equipment
manufacturer contracts, stadium advertising and naming rights
as problems affecting amateur sports. However, the report also
notes that commercial influence has trickled down to high
school sports, in particular boy's basketball, and may figure
prominently in parts of the recruiting process.
Another issue concerns gambling and how it may affect
amateur sports. The Professional and Amateur Sports Protection
Act, passed in 1992, banned sports wagering in all States
except those that already authorized it. Currently, sports
wagering is legal only in Nevada. The National Gambling Impact
Study Commission examined the effects of legalized gambling
from 1997 to 1999. As a result, the Commission made a number of
recommendations to address illegal gambling.
Finally, we will look at the overall welfare of the student
athlete. As most of us are aware, the odds of a college athlete
being drafted into the NBA or the NFL are staggering. The
Knight's Commission believes the premise of college sports as a
training ground for professional sports is false and leaves too
many student athletes ill-prepared for life after sports.
There's concern regarding low graduation rates of student
athletes and preferential treatment of college athletes,
including lower academic standards.
Additionally, the Commission states that the pressure to
win has resulted in circumvention of academic rules to the
detriment of athletes.
Although the Knight Commission Report raises many issues
and just as many questions, it is the responsibility of this
subcommittee to bring all sides of those issues into a forum
for open debate. So I look forward to hearing from our Member
panel: Congressman Tom Osborne, who has a storied history with
the University of Nebraska and can provide us a unique
perspective from a coach's point of view. In addition, I
welcome Congresswoman Berkley and her state's perspective on
these issues.
We also have witnesses from the NCAA, the Knight
Commission, the Collegiate Athletic Association. I welcome them
and look forward to their testimony as well. I know this
hearing will be very educational for all of us and will help us
shed some light on the myriad of issues facing today's student
athlete.
And with that the distinguished member from New York, the
ranking member, Mr. Towns.
[The prepared statement of Hon. Cliff Stearns follows:]
Prepared Statement of Hon. Cliff Stearns, Chairman, Subcommittee on
Commerce, Trade, and Consumer Protection
Today, we are examining the Challenges Facing Amateur Athletics. As
my colleagues are aware, The Committee has jurisdiction over sports, in
general, and as such will conduct oversight to identify issues that
require Committee attention. This hearing will focus on, but is not
limited to, several issues identified as relevant to amateur athletics.
The Knight Foundation's Commission on Intercollegiate Athletics
issued a report in June 2001 in which it identified many issues it
considered problematic for the health of amateur sports at the highest
level; collegiate sports. The report was written in the context of the
impact and relevance of collegiate sports related to the intent and
purpose of higher education. However, the issues are relevant to most
amateur sports and therefore provide an appropriate starting point for
the Committee's inquiry.
Among the issues the Knight Commission report identified that it
views as problematic, witnesses have been asked to address the
commercialization of collegiate sports and its impact.
Additionally, two other issues that have been addressed by previous
Congresses are gambling and student-athlete welfare. I especially want
to thank my good friend Mr. Towns, our distinguished ranking member for
his work on behalf of the welfare of student-athletes.
Commercialization lends itself to the so-called ``big-time'''
college sports of football and men's basketball. The Commission
believes that the popularity of college sports has attracted more and
more money, which in turn increases the pressure to win at all costs.
The pressure leads to abuse and violation of the rules to the detriment
of the student-athletes and the institutions.
The report identifies television contracts, equipment manufacturer
contracts, stadium advertising and naming rights as problems affecting
amateur sports, however, the report also notes that commercial
influence has trickled down to high school sport--in particular boys
basketball--and may figure prominently in parts of the recruiting
process.
Another issue concerns gambling and how it may affect amateur
sports. The Professional and Amateur Sports Protection Act (PASPA),
passed in 1992, banned sports wagering in all states except those that
already authorized it. Currently, sports wagering is legal only in
Nevada.
The National Gambling Impact Study Commission examined the effects
of legalized gambling from 1997 to 1999. As a result, the Commission
made a number of recommendations to address illegal gambling.
Finally, we will look at the overall welfare of the Student
Athlete. As most of us are aware, the odds of a college athlete being
drafted into the NBA or the NFL are staggering. The Knight Commission
believes the premise of college sports as a training ground for
professional sports is false and leaves too many student-athletes ill-
prepared for life after sports. There is concern regarding low
graduation rates of student athletes, and preferential treatment of
collegiate athletes, arguably including lower academic standards.
Additionally, the Commission states that the pressure to win has
resulted in the circumvention of academic rules to the detriment of the
athletes.
Though the Knight Commission report raises many issues, and just as
many questions, it is the responsibility of this Subcommittee to bring
all sides of those issues into a forum for open debate. I look forward
to hearing from our Member panel--Congressman Tom Osborne has a storied
history with the University of Nebraska and can provide us a unique
perspective from a coach's point of view. In addition, I welcome
Congresswoman Berkley and her state's perspective on these issues.
We also have witnesses from the NCAA, the Knight Commission, and
the Collegiate Athlete Association. I welcome them and look forward to
their testimony as well.
I know this hearing will be very educational for all of us, and
will help shed some light on the myriad of issues facing today's
student athlete.
Mr. Towns. Thank you very much, Mr. Chairman, and I'm
pleased to join you at this hearing and to welcome my current
colleagues to the committee. In addition to my former colleague
and friend, Tom McMillen and the rest of Panel today, I've long
been interested in issues surrounding amateur athletics and I'm
happy that the subcommittee has chosen to take a look at these
issues.
It is my hope that this will not be the last hearing that
we have on this topic. I must admit that I have many questions
for our Panelists today and not all of them have positive
connotation. Let me warn you in advance. Ten years ago,
Congressman Tom McMillen and I authored an extremely important
piece of legislation, the Student Right to Know Act. This law
forced NCAA member institutions to begin putting graduation
rates on the internet and that would inform potential student
athletes of the graduation rates, but it was also supposed to
be put in Letters of Intent that they would send students as
well. When the law passed, there was joyous celebration and all
the schools agreed that they would be in full compliance with
the law. And let me say this, I must admit, I'm angry to learn
that many schools are now openly thumbing their noses at
Congress and the law and I intend to ask about this today as
well.
I also suggest that perhaps there need to be stiffer
penalties against the NCAA or its member institutions that do
not comply with this law and I intend to search for a Federal
remedy to this growing problem. In addition to ensuring that
student athletes graduate, I'm also concerned about the
appearance of increased exploitation of student athletes. There
seems to be double or sometimes triple teaming that goes on
between big time schools, agents and corporations. Millions of
dollars flow between these entities and the student athlete
sees none of it. Oftentimes, I believe that the student is
considered a means to an end, rather than a person. Where is
the NCAA member institutions' commitment to its most valuable
resource, its student athletes? I look forward to hearing about
these issues as well.
Also, let me state my proud support for H.R. 641, the
National Collegiate and Amateur Athletic Protection Act of
2001. We need to address the issue of gambling, but we need to
do it the best way possible, by going after the real problem,
the bookies and other individuals who participate in illegal,
unregulated gambling.
Last, let me say this. We need to do something about sports
agents. I'm sure that Mr. Gordon, my colleague from Tennessee
will have something to say about the Tennessee football start
that was denied his senior season and a chance to get his
degree in 3\1/2\ years. I might add for his mild involvement
with an agent. And I would welcome legislation that would place
criminal penalties on agents who attempt to sway student
athletes before the appropriate time.
The issues surrounding the amateur athletics are
unbelievably complex. There are many ideas in an increasingly
crowded arena. I look forward to hearing the testimony today
and the debate that follows.
I'd like to thank you, Mr. Chairman, for holding this
hearing. I think it's a very important hearing and I'm certain
that as a result of what we do and say here today, will help a
lot of athletes in the years to come.
Thank you. I yield back.
[The prepared statement of Hon. Ed Towns follows:]
Prepared Statement of Hon. Ed Towns, a Representative in Congress from
the State of New York
Thank you Mr. Chairman and I am pleased to welcome my two current
colleagues to the committee, in addition to my former colleague, Mr.
McMillen and the rest of the panel today.
I have long been interested in issues surrounding amateur athletics
and I am heartened that the sub-committee has chosen to take a look at
these issues. It is my hope that this will not be the last hearing we
have on this topic. I must admit that I have many questions for our
panelists today and not all of them have positive connotations.
Ten years ago, Congressman McMillen and I authored an extremely
important piece of legislation: The Student Right to Know Act. This law
forced NCAA member institutions to begin putting graduation rates on
the Internet and better informing potential student-athletes of their
graduation rates. When the law passed, there was joyous celebration and
all the schools agreed that they would be in full compliance with the
law. And let me say this--I am angry to learn that many schools are now
openly thumbing their noses at Congress and the law and I intend to ask
about this today. I also suggest that perhaps there need to be stiffer
penalties against the NCAA or its member institutions that do not
comply with this law and I intend to search for a federal remedy to
this growing problem.
In addition to ensuring that student athletes graduate, I am also
concerned about the appearance of increased exploitation of student
athletes. There seems to be double or sometimes triple teaming that
goes on between big time schools, agents and corporations. Millions of
dollars flow between these entities and the student athlete sees none
of it. Often times I believe that the student is considered a means to
an end, rather than a person. Where is the NCAA's member institution's
commitment to its most valuable resource--its student athletes? I look
forward to hearing about these issues as well.
Also, let me state my proud support of H.R. 641, the National
Collegiate and Amateur Athletic Protection Act of 2001. We need to
address the issue of gambling, but we need to do it the best way
possible by going after the REAL problem--the bookies and other
individuals who participate in illegal, unregulated gambling.
Lastly, let me say this--we need to do something about sports
agents. I am sure that Mr. Gordon will have something to say about the
Tennessee Football star that was denied his senior season--and a chance
to get his degree in three and a half years I might add--for his mild
involvement with an agent and I would welcome legislation that would
place criminal penalties on agents who attempt to sway student athletes
before the appropriate time.
The issues surrounding Amateur athletics are unbelievably complex.
There are many ideas in an increasingly crowded arena. I look forward
to hearing the testimony today and for the debate that follows.
Thank you Mr. Chairman and I yield back.
Mr. Stearns. I thank my colleague.
The gentleman from Tennessee, Mr. Gordon?
Mr. Gordon. Thank you, Mr. Chairman. I want to add my
welcome to our panelists and also a welcome back to Tom
McMillen, a friend and former colleague. As my friend and our
ranking member pointed out, there are a number of issues here
of importance. One that I've been involved in is concerning
sports agents. Let me give you a little background and Mr.
Osborne, it's sort of a cardinal rule in practicing law and
really should be on being on a committee that you don't ask a
question you don't know the answer to. I have been meaning to
come by your office for a long time and talk to you about this.
I'm going to break the rule and just--I'd like to hear your
comments later, even though I don't know what they are. And let
me give you some background. As you well know, oftentimes,
sports agents will lure kids into deals or give them a gold
chain or a suit of clothes or whatever it might be. The result
being is that the kids will lose their eligibility, the schools
oftentimes are penalized, they lose their scholarship, yet
there's no penalty to the sports agent. It's an absolute free
walk for them. I'm told by many coaches that it's an ordeal
just keeping them away from the phone, from just flocking on
their best athletes.
A few years ago I introduced legislation that would ban or
penalize agents that have that type of conduct. And I've been
looking through my file. I wrote letters to all the coaches
around the country and many, many of them returned with a
positive endorsement. I'm looking for your letter and I haven't
been able to find those. I don't know whether you were there or
not. The Junior College Association also endorsed this
proposal. There was only one group that didn't and that was the
NCAA. Their reasoning was that they didn't want any kind of
government interference and so this shouldn't have occurred.
Interestingly, they later adopted and helped adopt some
uniform guidelines to be passed by different States, but we're
really no better off, no more States have laws against those
types of agents now than they did before. So I'm hoping that
when we hear from the NCAA, they may have had a change of heart
and we might talk a little bit about that later and I hope to
have a chance to hear from your perspective as to what are the
perils of student athletes, coaches that are trying to do the
right thing, but can't watch over every minute and to the
universities.
So I think you'll bring a unique perspective to this.
Again, I thank all my panelists here today for joining us.
Mr. Stearns. I thank my colleague. The gentleman from
Nebraska, Mr. Terry.
Mr. Terry. I have no opening statement but I will welcome
Coach Osborne, Congressman Osborne, my colleague in Nebraska.
[Additional statement submitted for the record follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Thank you, Chairman Stearns. I think you picked an excellent time
to begin the Committee's look at issues surrounding amateur athletics.
The Winter Olympics, now under way, celebrate all the positive aspects
of sports and competition. And you don't have to be a diehard sports
fan to recognize the dedication and sacrifices these athletes make for
the chance to compete against the best in the world. It's done almost
purely for the sake of competition.
Last week Americans enjoyed a heart-warming, patriotic moment when
members of the 1980 U.S. Olympic hockey team lit the Olympic torch to
begin the games. This miracle team of collegiate players beat the
seemingly invincible Soviet team and played on to win the gold. It was
a team of amateurs nobody had heard of.
However, the Olympics are no longer a competition reserved strictly
for amateurs. Today's U.S. hockey team will feature familiar names that
play in the NHL. Although many athletes train for years to compete at
the highest level without the promise of a professional career after
the games, some of the competitors are now drawn from the ranks of
professional sports. And while this does not indicate any diminished
desire to compete, it highlights the fact that times have been changing
in amateur sports.
We are well aware of the expansion of cable and satellite TV
providing hundreds of channels with 24 hour programming not widely
available 20 years ago. Sports coverage is as pervasive now as news
coverage.
This dramatic change in both the amount and manner in which sports
are presented to us is relevant to today's hearing because of the
potential ramifications. Young collegiate athletes are often televised
as much as their professional counterparts. The immense amount of
focus, driven by our insatiable appetite for athletic competition, has
raised concerns about new pressures on amateur, and particularly
intercollegiate, sports.
What effect this attention has on the student athletes is
debatable, and we will be able to talk about some of the issues of
concern this morning. However, singling out any one group for blame
would not be accurate. The more relevant question becomes where the
line is drawn between an amateur and a professional. From that point,
appropriate rules and policy can be constructed.
I commend the Chairman for calling this hearing to examine some of
the different issues that affect amateur athletes who compete at the
highest level of intercollegiate sports. Because the popularity of
college sports has grown enormously, examining the challenges at the
top of the hill is a natural starting point to assure this is a
worthwhile project.
I look forward to hearing from some of the experts, who have come
this morning to share their thoughts about commercialization pressures,
gambling, and student-athlete welfare. Experience has taught us that
water flows downhill, and we would be foolish if we didn't recognize
that many of the issues we will discuss today involving big-time
amateur sports, already influence the youngest of competitors and
therefore require an open, honest debate.
Based on the information we collect, I expect that we will develop
a blueprint for closer examination. We will then be able to determine
what, if any, issues require more Congressional attention and address
each appropriately.
Mr. Stearns. Let me move to our first panel and thank them
for coming. We're especially honored to have Congressman Tom
Osborne before us. He's had 25 years as a head coach of the
University of Nebraska football program. He amassed three
national NCAA championships with three perfect seasons. His
record was 87-11-1 and was inducted into the College Football
Hall of Fame in 1999. In addition, he earned an M.A. in
educational psychology and a doctorate in educational
psychology from the University of Nebraska in Lincoln. So if
anyone can speak on these issues with authority, it is our good
friend Tom Osborne and I welcome you, Tom.
I'd also like to welcome our good friend, Congresswoman
Shelley Berkley who represents the metropolitan Las Vegas area.
Shelley lives in Las Vegas, maintaining a deep sense of
commitment to give back to her community that opened the doors
for her. After earning her law degree at the University of San
Diego School of Law, Shelly returned to Las Vegas where she has
extensive experience in the Nevada hotel industry, the Nevada
State House and is part of the Nevada Board of Regents, so she
also has some keen insight into these issues, so Shelley, let
me also welcome you too, and I appreciate your coming. And
we'll let you start with an opening statement.
STATEMENTS OF HON. SHELLEY BERKLEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEVADA; AND HON. TOM OSBORNE, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA
Ms. Berkley. I'd like to take this opportunity to thank the
chairman and the ranking member for holding this very important
hearing. I am also honored to be on the same panel as Coach
Congressman Osborne. I know about his extensive career and we
all take great pride in it.
I want to thank you for the opportunity to discuss the
challenges facing amateur athletics and share with you my
knowledge and very serious concerns about this issue, having
devoted 8 years of my life to higher education as an elected
member of the Nevada University Board of Regents, I have
extensive experience in dealing with college athletics and with
the NCAA.
My tenure as a Regent came during a time of tremendous
growth for intercollegiate sports at UNLV. As our athletic
programs were rising to national prominence I was witness to
the NCAA's often misguided and arbitrary enforcement of its own
rules as well as its outrageously unfair distribution of wealth
earned solely by the hard work and talent of its student
athletes.
As a recent ``60 Minutes'' segment points out, the NCAA
billions of dollars go to the folks at the top, not the student
athletes. Here's one example. Eraste Autin, a University of
Florida recruit collapsed during a so-called voluntary summer
workout and later died. By NCAA rules, the University was not
allowed to cover his hospital costs and his family could not
even collect the death benefit. Surely, the NCAA can allow a
University to pay the hospital expenses for a student athlete
who dies while practicing the sports that are making the NCAA
incredible amounts of money. Why didn't this happen?
Because the workout was categorized by the NCAA as
voluntary. Now you could ask any student athlete. There's no
such thing as a voluntary workout. You show or you don't play.
For many of these students attending school an athletic
scholarship is their ticket and they know if they don't play,
they lose their scholarship and they're out of school. In the
same ``60 Minutes'' story, the NCAA admitted that athletic
scholarships fall $2,000 per year short of what the students
need to get by. This leaves the vast majority of student
athletes living under the poverty line while the NCAA rakes in
the dough.
Now remember, you're dealing with young students, often
from disadvantaged backgrounds, away from home for the first
time. The NCAA is supposed to look out for the best interests
of our Nation's sons and daughters as they pursue their
collegiate athletic careers, but I believe we need a watchdog
to watch over the NCAA. While these kids are living under the
poverty line, the NCAA officials are living the life of the
potentates that they have become, high salaries and excessive
expense accounts are just the tip of the iceberg, and believe
me, when these guys come to Las Vegas, they live the life of
Riley, drive the finest cars, stay at the finest hotels, eat in
the finest restaurants and see the most expensive shows. It's
not from their own personal money that they have these expense
accounts.
I also know from personal experience that coaches and
academic institutions are often scared to death to speak out
against the NCAA for fear of retribution against their athletic
programs. The NCAA has a life and death hold over our
collegiate athletic programs and our student athletes with no
due process requirements and no appeal possible. The NCAA has a
monopoly and a strangle hold on the fate of college programs
across the country.
I have witnessed the result of the animosity of the NCAA
against a college coach firsthand when the NCAA decided to
destroy the career of Coach Jerry Tarkenian of UNLV. They
stopped at nothing, including destroying the UNLV basketball
program in order to end the career of a college coach who dared
to challenge the awesome power of the NCAA, a coach who
protected his players and cared about this program and the
success and well being of the students under his care. After
years of litigation and millions of dollars in legal fees, I am
certain paid for by the sweat of the student athletes, Coach
Tarkenian won his lawsuit against the NCAA. Unfortunately, the
program did not fare as well and a decade later, they're still
recovering from the heavy handed penalties set down by the NCAA
and who suffers from the NCAA's so-called justice? The only
ones who suffer are the student athletes who are victims of a
system they did not create and cannot change.
After 8 years as a University Regent, I developed
relationships with University Presidents, coaches and athletic
directors across the country. Last year, when the NCAA proposed
legislation to outlaw legal wagering on collegiate sports in
Nevada, I contacted several of these strong, brave men to ask
whether outlawing legal wagering in Nevada would have any
effect on illegal sports betting on college campuses. Every
one, each one stated categorically that it would not. When I
asked these same brave men if they were willing to buck the
NCAA and testify against the legislation, each and every one
declined, citing fear of retribution against their program by
the NCAA, and I'll get into this issue in a moment.
The NCAA has done nothing to ease the poverty in which many
of these student athletes are forced to live. The NCAA has done
nothing to redress the problems created by enforcement of its
arbitrary, antiquated and unfair rules. Given the mindset of
the NCAA which neglects the need of the student athletes, is it
any wonder that the NCAA would try to seek the easy way out by
proposing an illogical, useless solution to another major
problem that confronts our students?
That's the problem of illegal gambling on our college
campuses and this is another area that the NCAA has failed
miserably. Rather than helping college athletes, the NCAA has
done virtually nothing to stem the tide of illegal betting on
campus, even though it has recently signed, recently signed a
$6 billion contract to broadcast college games, $6 billion. The
NCAA has chosen to make legal sports betting in Nevada which
has no link whatsoever to illegal sports betting, its
scapegoat, rather than mandate its member institutions, take
their share of the NCAA profits and use it to develop programs
to fight illegal college gambling. And don't let the NCAA fool
you. The only public information regarding their budget, the
NCAA's website lists their total operating revenue for last
year at over $345 million, a grand total of just over $15
million goes toward student athlete welfare and youth programs
and services. The NCAA lists a meager $263,000 or less than \1/
100\th of 1 percent of having anything to do with sports agents
and gambling. Keep in mind that $6 billion television contract.
A couple of years ago, in response to questioning from
then-Senator Richard Bryan of Nevada, the NCAA testified before
the Senate Commerce Committee that out of 1,100 employees on
its payroll, only one was assigned to fighting gambling on
college campuses. Today, the NCAA pays lip service to
combatting campus gambling by sending out posters, posting
warnings on their website, airing a few commercials during the
final four and blaming the State of Nevada for its failure to
get a handle on this problem.
If the NCAA is really serious about fighting illegal
amateur sports gambling, well, then let's get serious and I
challenge the NCAA to take its multi-billion dollar revenue,
all generated by unpaid student athletes and not just a tiny
fraction of it, and dedicate it to fighting illegal gambling
through aggressive enforcement and prevention programs. We need
a serious, real world approach to this problem and that's why
Congressman Gibbons and I introduced H.R. 641 that Mr. Towns
spoke of. The National Collegiate and Amateur Athletic
Protection Act, which attacks illegal gambling head on, and I
challenge the NCAA to step up to the plate and support this
bill. Our bill boosts law enforcement's efforts to crack down
on illegal betting operations, hitting hard at the illegal
bookmaking rings. The NCAA bill does absolutely nothing to help
law enforcement. Our bill would investigate the scope and
uncover the causes of illegal campus betting. The NCAA bill
does nothing. No studies, no investigations, no educational
programs, nothing. Our bill calls on the NCAA colleges and
universities to step up gambling prevention programs on
campuses. The NCAA proposed bill takes no responsibility
whatsoever.
I'm almost done. I have been tracking the NCAA for years. I
witnessed their heavy handed tactics, lack of due process,
arbitrary and harsh punishments of schools that refuse to go
along, the relatively light punishment of those schools favored
by the NCAA, the opulent salaries and lifestyles of the NCAA
brass and the poverty that many student athletes are forced to
live in due to antiquated rules perpetuated mindlessly by the
NCAA.
I submit to you that the NCAA should be investigated. A
full congressional study would uncover an organization
dedicated to the proposition of taking care and protecting
itself and doing as little as possible to take care and protect
the student athletes who are generating the enormous amounts of
money that creates the power that the NCAA abuses on a regular
basis.
Thank you very much, Mr. Chairman.
[The prepared statement of Hon. Shelley Berkley follows:]
Prepared Statement of Hon. Shelley Berkley, a Representative in
Congress from the State of Nevada
Thank you for the opportunity to discuss the challenges facing
amateur athletics, and share with you my knowledge and very serious
concerns about this issue. Having devoted 8 years of my life to higher
education as an elected member of the Nevada University Board of
Regents, I have extensive experience in dealing with college athletics
and the National Collegiate Athletic Association (NCAA).
Since coming to Congress, I have been astounded by Congress'
misconceptions about Nevada's gaming industry and the hypocrisy with
which the NCAA operates.
My tenure as a regent came during a time of tremendous growth for
intercollegiate athletics at UNLV. As our athletic programs were rising
to national prominence, I was witness to the often misguided and
arbitrary application of the NCAA to enforce its own rules. In many
respects the NCAA was more in need of investigation than the athletes,
coaches and boosters that the NCAA investigated.
As a recent 60 Minutes segment points out, the NCAA's billions of
dollars go to ``the folks at the top,'' not the student athletes.
Here's one example: Eraste Autin, a University of Florida recruit,
collapsed during a voluntary summer workout and died later. By NCAA
rules, the University was not allowed to cover his hospital costs and
his family could not even collect a death benefit. Surely the NCAA can
allow a university to pay the hospital expenses for a student athlete
who dies while practicing the sport that's making the NCAA money.
In the same 60 Minutes story, the NCAA fully admits that
scholarships fall $2,000 per year short of what athletes need to get
by. This leaves the vast majority of college athletes living under the
poverty line while the NCAA rakes in the dough.
The NCAA is supposed to look out for the best interests of our
nation's sons and daughters as they pursue collegiate athletics. But, I
believe we need a watchdog to watch over the NCAA. I know from personal
experience that coaches and academic institutions are often scared to
death of the NCAA because they know that if the NCAA doesn't like you
they are going to come after you.
Right now, one of the best female college basketball players in the
country is being forced to sit on the sidelines. Under the NCAA's
guilty-until-proven-innocent stance, Linda Frohlich's eligibility has
been revoked until UNLV shows she did not receive improper benefits
while playing for a club team in Germany before attending the school.
Frohlich may very well be innocent of the NCAA's allegations, but the
NCAA places the entire burden of proof on teenage college athletes.
Even though innocent until proven guilty is supposed to be the law of
the land in the United States, the NCAA carries out its actions with
impunity.
Gambling on college campuses is another area where the NCAA has
failed miserably. Rather than helping the college athletes who bring in
their big bucks, the NCAA has done virtually nothing to stem the tide
of illegal betting on college campuses, even though it has a $6 billion
contract to broadcast college games. The NCAA has chosen to make Nevada
its scapegoat rather than mandate their member institutions take their
share of NCAA profits and use it to develop programs to fight illegal
college gambling.
In the only public information regarding their budget, the NCAA's
website lists their total operating revenue for 2001-2002 at over $345
million. A grand total of just over $15 million goes toward ``Student-
Athlete Welfare and Youth Programs and Services.'' But the NCAA lists
only a meager $263,000, or less than one hundredth of one percent, as
having anything to do with sports agents and gambling. Keep in mind
they've recently signed a $6 billion television contract.
A couple of years ago, in response to questioning from then Senator
Richard Bryan (D-NV), the NCAA testified before the Senate Commerce
Committee that they only had 1 out of 1100 employees assigned to
fighting gambling on college campuses. Today, the NCAA pays lip service
to campus gambling by sending out posters, posting warnings on their
website, and airing a few commercials during the Final Four.
If the NCAA is really serious about fighting illegal amateur sports
gambling, then let's get serious. I challenge the NCAA to take its
multi-billion dollar revenue . . . all generated by unpaid student-
athletes, and not just a tiny fraction . . . and dedicate it to
fighting illegal gambling, through aggressive enforcement and
prevention programs.
We need a serious, real-world approach to this problem. That's why
Congressman Gibbons and I introduced H.R. 641, the National Collegiate
and Amateur Athletic Protection Act, which attacks illegal gambling
head on. I challenge the NCAA to step up to the plate and support this
bill.
Our bill boosts law enforcement's efforts to crack down on illegal
betting operations, hitting hard at the illegal bookmaking rings. The
NCAA bill does absolutely nothing to help law enforcement. Our bill
would investigate the scope--and uncover the causes--of illegal campus
betting. The NCAA bill does nothing. No studies, no investigations, no
educational programs--nothing. Our bill calls on the NCAA, colleges and
universities to step up gambling prevention programs on campuses. The
NCAA-proposed bill takes no responsibility.
Thank you.
Mr. Stearns. I thank the gentlelady.
Ms. Berkley. Very gentle.
Mr. Stearns. Tell us how you really feel.
STATEMENT OF HON. TOM OSBORNE
Mr. Osborne. Thank you, Chairman Stearns, Ranking Member
Towns and members of the committee. It's a pleasure to be here
today. It's a pleasure to be with Congresswoman Berkley and I
must say that some of the things she said I would agree with,
but not all. So we'll emphasize some of those points.
I'm currently a co-sponsor of the Student Athlete
Protection Act, H.R. 1110 which deals with gambling issues and
that will probably comprise the majority of my remarks. I
understand there is interest in commercialization which I'm
interested in and agents and I'm interested in that too and
I'll be glad to answer questions regarding those issues.
First of all, as far as gambling is concerned, it's bad for
the game. I think most everybody who has followed athletics can
harken back to maybe the Black Sox scandal, what it did to
major league baseball, NYU, CCNY basketball scandals in the
1950's, University of Kentucky.
In the 1990's, there were four major intercollegiate
scandals involving intercollegiate athletics that involved
gambling. Those four scandals were more than the preceding 50
years combined. ASU, Arizona State, was involved in one of
those and in that investigation it was proven that $1 million
of the gambling was bet legally on intercollegiate athletics in
the State of Nevada. I know a good deal about the NFL. They're
scared to death of gambling. They have several investigators in
almost every major city and the NCAA, of course, is concerned
as well because of the integrity of the game.
Second, gambling is bad for the coaches. You have to win
twice. You've got win once on the scoreboard and then you've
got to beat the points spread. A lot of times in substitution
it's difficult because if you know the game is secure, but you
haven't beat the point spread, a lot of folks don't want to see
a second and third team in there. They don't want to see you
kneel down on the ball when you can make another touchdown at
the end of the ball game and beat the point spread. And of
course, that's not in the best interest of the athletes and not
in the best interest of the game and not in the best interest
of the coaches.
We often hear that there are many coaches and players who
really favor legalized gambling in athletics, but they're just
afraid to speak out. I have no--the NCAA has no influence over
me at this point. I'm out from under whatever surveillance they
may have. There are literally hundreds of coaches and thousands
of athletes who have played who are no longer governed by the
NCAA and they're certainly free to speak their minds. But as
I've talked to people over the years I have run across none
that I can think of, now there may be somebody out there who
thinks it would be good for the game to have legalized
gambling, but it certainly is a very, very small minority if it
exists at all.
Third, I would say gambling is bad for the players. As many
of you know, the first mistake that a player makes is betting
on another athletic contest, probably isn't his own. And he
loses some money and then pretty soon he decides well, you
know, we've got a great team and we can win for sure this week
and I know how practice is going, so I'm going to put down a
bet on my own team and double up and I'm going to get even
again and then you double up again and pretty soon you're in
the hole so far there's no way you can work your way out of it.
And then there's only one way to get out. And the bookie or
whoever is running the sports betting will say well, all you've
got to do is help us out a little bit and you're going to be
okay. And so many players get sucked into the issue, a few get
caught, probably a lot of them don't get caught.
Gambling certainly adds pressure to the players. If your
team is 10 point favorite and you're ahead by 9 and there's 2
seconds left in the game, the game is won. And you've got two
free throws. Those free throws are very meaningful because it
may mean thousands of dollars or even millions of dollars, if
you make them or don't make them. So that adds pressure.
The other issue is the fact that there's always hate mail.
We had a guy who was a good player, had great promise. He
fumbled the ball in a critical game and we lost the game, first
game we'd lost in many games and he received so much hate mail,
negative phone calls and so one. Some of it was regarding
gambling and the guy was never the same. He never wanted to be
in that position where he pulled the trigger again. He played,
he did all right, but it took the heart out of him. So it does
put pressure on players and it's unnecessary.
Let me last just address a loophole and I have great
respect for Congresswoman Berkley and others from Nevada and I
understand some of their concerns. And yet, gambling is illegal
in intercollegiate athletics, amateur sports in 49 States. In
one state, it is legal. Would the Congress, would the
government say it's okay to counterfeit money in one State and
not in 49 States?
It has no effect because it's only in this one isolated
instance. Well, obviously what goes on in one state, if it is
legal, can have an effect on the other States. And that's
exactly what happens in gambling. If you're a small time bookie
and you don't have a whole lot of resources and you can maybe
lay off $50,000 worth of bets and you've got Florida, Florida
State football or you've got North Carolina and Duke in
basketball and the action is getting pretty heavy in the dorm
or wherever, and you can see where it can get to be $100- or
$200- or $300,000, well you can lay those bets off in Las Vegas
legally at this present time. The $1 million that went down on
the ASU bets was bet legally in Las Vegas. And so to say that
that doesn't have any effect on what happens in the other
States is not accurate. It is accurate. And so what kind of a
message have we sent?
Have we said we really don't think this is a good activity,
it's really not good for the sport, it's not good for the
players, not good for the coaches, but yet we're going to give
this exemption here. And so that's what I don't understand what
kind of a message we're trying to say and why we would provide
that exemption or that loophole. Again, there may be good
arguments, but I'm not real sure what they may be.
And last, let me just say that I would like to thank the
members of the committee for giving me this opportunity to
testify. I'll be very happy to--I'm very interested in agent
issues. I have some strong views on that. I have some very
strong views on commercialization. The fact that we've now gone
to 12 games, actually, in intercollegiate football and when I
started out there were 9 and we've got a lot of guys that are
going to be playing 14 games this next year. So that's
obviously for a profit motive. I am not always a big fan of the
NCAA. I don't think I'm quite as negative as Congresswoman
Berkley. I see some good things in the NCAA, but I certainly
will try to maintain an objective stance and I'd be glad to
answer any questions that you might have.
[The prepared statement of Hon. Tom Osborne follows:]
Prepared Statement of Hon. Tom Osborne, a Representative in Congress
from the State of Nebraska
Thank you Chairman Stearns, Ranking Member Towns, and Members of
the Committee. I appreciate the opportunity to come and speak with you
today about something that is near and dear to me--the effects of legal
gambling on college sports.
In my 36 years as a coach of the University of Nebraska football
team, I witnessed first hand the negative impact gambling can have on
college athletics. The following observations are based upon some of
the experiences and insights gained in coaching.
A) Organized gambling is bad for the game. The emphasis goes from
that of appreciation for excellence and skill to point spreads and
monetary gain. The best interests of athletic competition are served in
an atmosphere that is conducive to good sportsmanship and respect for
opponents. Gambling creates an environment antithetical to wholesome
competition and sometimes creates doubt as to the integrity of the
contest.
B) Organized gambling often has a negative impact on the fans. The
point spread is an arbitrary number that supposedly reflects the true
strength of competing teams. Fans with money tied to the arbitrary
point spread derive less pleasure from the spontaneity of sports.
Rather than the excitement of the unpredictable nature of sport,
gamblers want the anticipated outcome that the point spread determines
days before the game. Sometimes the point spread is based on inaccurate
or incomplete information. Point spreads are published in nearly every
newspaper and are mentioned on television and radio newscasts to the
degree where fans' expectations are largely shaped by information from
the gambling industry. If a team is favored by 28 points and wins by
three, in the minds of many fans the win is really a loss. If, on the
other hand, a team is a 21-point underdog and only loses by seven
points, the loss is viewed in a more favorable light. I recall talking
to some fans whose team had just won the first national championship in
school history, yet, rather than being excited they were disappointed
because their team, a 17-point favorite, had won by only two points.
Fans often have a difficult time seeing the athletic contest for what
it was meant to be, that of a contest of skill, intelligence and
endurance, as they get lost in the economics of gambling.
C) Organized gambling is bad for coaches. Many times the coach is
expected to win twice--once on the scoreboard and once by beating the
point spread. A coach in charge of a team listed as a 35-point favorite
starts the game behind 35-0 in the minds of the gambling community,
which includes a high percentage of fans. If the coach's team is
heavily favored and is tied at halftime, there is a good chance that
the team and the coach will be booed at halftime. Most of the truly
ugly incidents that I encountered in my coaching profession were
related to gambling. I have had a mailbox blown up, a few death
threats, obscene phone calls in the middle of the night, and have heard
the very common complaint that ``I cost someone x amount of dollars.''
Since we did not beat the point spread, the person who lost the bet
held the coach personally accountable for the gambling loss. Many times
it is highly unpopular with fans to substitute second- and third-team
players once the outcome of the contest has been decided if the point
spread has not been beaten. The second- and third-team players need the
experience and greatly appreciate the opportunity to play yet their
appearance in the game is not greeted with enthusiasm if it might
jeopardize beating the point spread. Similarly, not scoring a late
touchdown or basket by letting the clock run out is viewed with great
displeasure if there are point spread implications.D) Organized
gambling is bad for the players. There is a huge amount of gambling on
college campuses. This activity is heavily influenced by point spreads.
Very few athletic contests are viewed as even matches; therefore, point
spreads are established to provide bookies with a basis for gambling
odds. Gambling intensifies pressure on athletes. The player shooting a
free throw with only two seconds left in a game in which his team has
been favored by ten points and is leading by nine is unnecessarily
intense. The game is over as far as the win or loss column, yet making
the free throw can result in millions of dollars changing hands.
I coached an 18 year-old young man who I expected would be one of
the best players ever in his position. We had won several games in a
row, and momentum was strong. But, in one game he fumbled the ball at a
critical point, and despite strong play by him and the team, we lost
the game. The young man received hate mail and threatening phone calls
that permanently changed him. He continued to play, but he never again
wanted to be the player who pulled the trigger. His confidence was
irrevocably shattered.
Players sometimes accumulate gambling debts, and, when a debt grows
to a certain magnitude, pressures are put upon the player to alter his/
her play in the game to affect the point spread. A great many of the
point shaving incidents that have hurt college athletics so badly and
have left the athletes in dire straights have been prompted by gambling
debts that have mounted to the point where the athlete sees no other
way to pay for the debt. In the 1990s, this country saw more point-
shaving scandals and attempted scandals than the five previous decades
combined. The point shaving scandal at Arizona State University alone
involved more money being wagered that any point-shaving scam in the
history of collegiate sports, $1 million of which was wagered legally
in Nevada casinos.
The National Gambling Impact Study Commission has weighed in on
this issue. In it's final report, the Commission recommended a ban on
all legal sports wagering on college athletics. Clearly, it is time to
address the issue of protecting student athletes from the growing and
increasingly negative influence of sports betting. Amateur sports
should be the protected playground of pure athleticism. Ironically
enough, there was a period of time when officials in Nevada agreed that
wagering on college kids is risky business, as they had a ban in place
to prohibit sports wagering on Nevada teams. It is my understanding
that they did this to protect the integrity of Nevada's sporting
events. It was only when my colleagues and I renewed our push for a
complete ban on sports wagering did the Nevada Gaming Control Board
change this regulation, thus banning sports wagering on Nevada sporting
events. Obviously, it would seem hypocritical to push for legal
wagering on other states' teams' while prohibiting this same form of
gambling on your own states' teams.
While I am committed to finding ways to reduce and prevent illegal
gambling on collegiate athletics, I firmly believe that our first step
must be closing the Nevada loophole. Only then do we send the message
that gambling on our college athletes is wrong and puts the integrity
of collegiate athletics in jeopardy. Consistency in this argument is
crucial. We would never think to allow one state in this country to
allow counterfeiting, while telling the other 49 states that
counterfeiting is illegal. Imagine the consequences of such a
situation, with legal counterfeiting money flooding the rest of the
states where this same action is illegal.
I am proud to be an original cosponsor of The Student Athlete
Protection Act, H.R. 1110, to prohibit gambling on high school,
collegiate and Olympic sports. I understand that this bill is not
perfect, and it alone will not eliminate gambling on amateur athletics.
However, consistency is key. We cannot continue to say that such
gambling is illegal in 49 out of 50 states. The college presidents,
coaches and students who support this legislation cannot benefit
financially from this legislation; the only motivation is to protect
the young people and the integrity of the games they play. If we
continue to allow betting on our amateur sports, the only winners will
be the Las Vegas casinos.
Thank you again, Chairman Stearns, Ranking Member Towns and Members
of the Committee, for the opportunity to speak to you today about this
very important issue. It is seldom I get to speak on an issue here in
Congress in which I have so many years of experience dealing first hand
with the issue and I appreciate the opportunity to do so today.
Mr. Stearns. I thank the members for their participation in
opening statements. I think we have a vote now. We have a
general vote and then we have another vote after that, so I
think in the best interest before we start the questioning
because I think once we start all of us do have questions and
both of you are sort of experts in your areas that you're
talking about. So we just feel it would be very helpful to be
able to have the time, so we're going to adjourn the
subcommittee and come back after the two votes. It should
probably be in about 10 to 20 minutes. So the committee is
adjourned until after the two votes.
[Brief recess.]
Mr. Stearns. We'll reconvene the hearing and the ranking
member is on his way so I'll start with the gentle lady from
Las Vegas.
My question would be what percent of sports wagering in
Nevada is on college sports? And then the follow up question
would be if it's very small, relatively insignificant, I mean
why doesn't Nevada abolish it? I think those are probably the
first leading questions that you probably could anticipate us
asking.
Ms. Berkley. Thank you, Mr. Chairman. Let me answer your
question this way. Three hundred eighty billion dollars is bet
illegally every year on collegiate sports, that's illegally.
Two billion dollars is bet legally in the Nevada sports books
where you have to be 21 in order to place a bet and it's of
course, needless to say a very well regulated industry on the
State and local level.
To answer your second question, if that's the case and it's
such a small percentage of the betting in the United States,
why is it that we fight so vehemently to retain it? I would
answer it two ways. One is economically. Right now after 9-11,
after the tragedy that this country has experienced, within 2
days after the attack on the World Trade Center and the
Pentagon, 20,000 people were laid off in my District alone.
Needless to say, we have a tourist-based economy. When people
stop flying and stop coming to Las Vegas, 20,000 lost their
jobs. We are experiencing tremendous economic displacement now
in Las Vegas.
Mr. Stearns. Still?
Ms. Berkley. Still. Now I will say that there have been
some rehires, but it's nowhere near where it once was and a lot
of people are going back on as an as-need basis which means
they don't get their benefits. So my District has taken a
terrible economic hit after this attack.
The second thing it's a bit of a principle and a States'
right issue. The State of Nevada regulates its gaming industry
including betting on sports activities in a very well regulated
atmosphere, both on the State and local level and you do have
to be 21 in order to place a bet. Now I will say that if you're
betting from your dormitory at the University of Arizona, you
don't have to be 21 to place a bet, you can do it right from
the comfort of your own dorm room. And that's betting
illegally.
Mr. Stearns. You said there was going to be two reasons.
One was the economy.
Ms. Berkley. The second was a States' rights issue.
Mr. Stearns. States' rights issue. Okay.
Ms. Berkley. We don't believe the Federal Government should
impose its will on the State of Nevada when it comes to this
issue where we are well-regulated and well-taxed on the State
and local level.
Mr. Stearns. And Tom, basically, you believe--why do you
believe betting on collegiate sports should be abolished, I
guess, would be--should all sports wagering, professional and
amateur be also banned?
Mr. Osborne. I'm not a big fan of gaming on athletics, in
general, but I do believe that probably professional athletes
are a little bit different realm. I believe, as I mentioned the
NFL and I believe major league baseball, NBA are scared to
death of some type of gambling irregularity and you can see
what has happened to Pete Rose, whether you agree or disagree
with Pete's stance, what happened with Paul Horning and others,
just examples of how fearful they are that the integrity of the
game is going to be compromised by gambling. But I think when
you're dealing with young men who basically at best have room,
board, books, tuition and fees, that you wouldn't subject them
to that additional stress and pressure. It's not fun for the
coaches, but we get paid and we take the heat and that's part
of the deal. But I guess philosophically, regardless of amount,
I can't understand why we have the inconsistency of 49 States
being regulated one way and one State not being regulated and I
think that sends a very powerful message to people around the
country as to what's acceptable and what isn't. So maybe some
can explain that to me, how we can resolve that, but that's
probably my biggest concern.
Mr. Stearns. In your opening statement you talked about
point spreads and how that would have an effect. Let's say we
abolished the idea of gambling, would still allowing point
spread have an impact in your opinion?
Mr. Osborne. Well, of course, point spreads are what make
it attractive, what make gambling possible because there are
very few athletic contests that are perceived as dead even,
straight up. So in order to have some type of a bet, if Florida
State is playing Duke in football, it's going to be a 35 point
difference and if Duke is playing Florida State in basketball,
it's going to be 20 to 35 points the other way.
Mr. Stearns. So the point spread increases the idea of
gambling?
Mr. Osborne. I think it does and as many people in Las
Vegas will tell you, the point spread isn't set in Las Vegas,
it's often set by Danny Sheridan and others who do not reside
in Las Vegas, but I do believe that the point spread is very
difficult because if as a coach you're favored by 35 and you
win by 21, many people see it as a loss. And that's
unfortunate. And it does have something to do with how some
people play the end of the game, if they haven't beat the point
spread they're going to keep the first team in there and that's
unfortunate.
Mr. Stearns. My time has expired. The gentleman from New
York?
Mr. Towns. Thank you very much, Mr. Chairman. Let me ask
you a couple of questions about the voluntary practices.
Wouldn't it just be better if you can practice any time you
want to practice, rather than have a voluntary kind of practice
which is not voluntary.
Mr. Osborne. Well, I don't know too much about those, Mr.
Towns, because what we did was he had summer conditioning, for
instance, and that was strictly voluntary. We had a lot of
players who did not participate. The biggest motivation, I
think for players to be there, was that they knew that if they
weren't there that somebody in their position was there. But
you have some type of conditioning program. You can't just go
out and start playing in August and expect those guys to be
ready to play. You have to weight training. You have to
running. You have to have conditioning. Of course, many of the
deaths that occur every fall occur from players who have not
done proper conditioning and all of a sudden they're out there
in full pads and it's 110 degrees and the humidity is 90
percent and they just can't handle it. So I'm sure there are
places where involuntary is not involuntary. And I just don't
know much about that, but there is great pressure internally
within a football team to be competitive. If you're battling
for a starting job and you know that your competition is going
to be there working hard, it's kind of hard for you not to show
up too. But we did not demand that players be there, but they
generally were.
Mr. Towns. Let me ask it this way then. Shouldn't they have
health coverage, if they show up either way?
Mr. Osborne. As far as I know all of our injuries, anything
that was done was covered. If a player got hurt in the off-
season, we certainly paid for his surgery and we did everything
that we possibly to make sure he was rehabilitated. So we
didn't treat an off-season injury any different than we did an
in-season injury.
Mr. Towns. Let me ask you this, gambling is going to take
place. Wouldn't it make more sense if the NCAA would spend some
money in enforcement and to be able to deal with it that way?
It's going to take place.
Mr. Osborne. Well, I think the NCAA does send some folks
out and the greatest enforcer that they're counting on is the
coaches and every coach that I know of is scared to death of a
gambling irregularity, somebody getting to one of his players.
Northwestern is an example of a team that has great academic
standards, normally impeccable credentials and yet you have one
or two guys who got involved in a spread and it was a horrible
thing for their football program. And so we talked about
gambling at Nebraska probably 8, 9, 10 times a year. I brought
Art Schleester in one time. Art was a guy who had gambling
problems, was in jail, in prison and he was sent out to speak
to college teams. And he made some impression on our players
about what was going on and how difficult it was about a year
later after he was at our campus he was back in jail again. He
relapsed. So a gambling addiction is every bit as bad as an
addiction to alcohol or drugs. In some ways, people just really
have a hard time letting go of it.
Mr. Towns. According to my understanding that the NCAA
spends $263,000 on enforcement out of a $345 million which is
peanuts. It doesn't seem to be a serious commitment there.
So Congresswoman Berkley, we talked about it earlier and
let me just say your testimony, I think you're very passionate.
There's no question about that, but we just heard Coach
Osborne, Congressman Osborne just indicate the fact that there
is coverage for people that volunteer to practice. Is that just
something that happens maybe at Nebraska and no where else?
Ms. Berkley. Well, with all due respect to the Congressman,
the reality according to NCAA rules is that it can't provide
health insurance or any other benefit to a student athlete, to
a player, unless it is provided to all of the other students on
that college campus. So even though the players' needs might be
dramatically different than the other 20,000 students on the
college campus, by the NCAA antiquated rules, they can't
provide anything to the player that they don't provide to
everybody else.
Mr. Towns. Right, so if a player is going to participate
regardless of whether it's voluntary or whether or not it's a
called practice, they should be covered.
Ms. Berkley. I believe that is absolutely correct.
Mr. Towns. Let me ask you a question about the gambling.
Gambling is going to take place regardless, so what do you
think the NCAA should do in terms of enforcement?
Ms. Berkley. Well, when we know that they spend \1/100\th
of 1 percent on anti-gambling programs throughout the United
States on each and every one of their member institutions, I
think that demonstrates to me in a very profound way that they
really are not taking this issue very seriously and again, they
would rather scapegoat other--State of Nevada, legal gambling
and so forth and so on, rather than taking care of their own
problem. And I believe in institutional control. If these
players know when they're getting recruited and when they come
on the college campus, that gambling will not be tolerated and
if they are caught gambling, they're going to (a) lose their
scholarship, lose their place on the team and be booted out of
school. I will submit to you that this gambling problem will be
eliminated quite rapidly. The stakes are extremely high and the
NCAA and the member institutions have been looking the other
way for years in order to avoid a controversy and a problem.
But if I could--I just wanted to clarify something that the
Congressman said earlier regarding the scandals in basketball
in years gone by and point out, because he pointed out the
Arizona State scandal. The only way that the Arizona State
scandal was uncovered is when the--it was uncovered by the Las
Vegas sports books when they noticed that there was a
discrepancy in the betting and the Las Vegas books reported it
to the FBI and that's how that scandal was uncovered. And the
FBI will tell you and they have testified that it's the Las
Vegas books that point out the scandals and that's how the FBI
is able to uncover them.
Mr. Towns. Thank you. My time has expired.
Mr. Stearns. I thank the gentleman. The gentleman from
Tennessee, Mr. Bryant?
Mr. Bryant. Thank you, Mr. Chairman, and I too add my
appreciation to both witnesses who are very qualified to
testify on the relative positions today.
I do think, and I'm going to ask Coach Osborne in a minute
if he could comment a little outside the gambling realm on
sports agents and perhaps his concept of somehow athletes and
college being paid, but I do want to get back to the gambling
and make a couple of comments. I am concerned about the NCAA
and their quite a bit of bark about being opposed to gambling
in any form, but yet as has been pointed out by several members
today and also Ms. Berkley from Las Vegas, there's very little
real bite of the NCAA, if you look at their budget and how much
they commit to actual enforcement or ferreting out or
prevention of whatever you might want to do if you're really
opposed to gambling at that level. And I would encourage and I
would hope as we're in and out today going to other Panels, I
may not be here for Panel 2, but I would hope that the NCAA
witness will testify about that and perhaps give us an
explanation which would somehow explain why they only spend
less than 1/100th of their budget in this area.
On the other side of the coin in terms of gambling in
Nevada, I kind of agree with Coach Osborne on this as that
being the odd, the one State being allowed to do this. I
suspect that the percentage of the sports wagering in Nevada is
very small. I've heard as low as 2 percent. I don't think
that's probably significant from an overall percentage. I don't
think that people are not going to go to Las Vegas because they
don't have college gambling. I think a lot of that money will
probably migrate to other sports, professional sports probably.
But I would ask Congresswoman Berkley if she had any studies or
any evidence of financial impact on any part of the tourism or
gambling industry, if you would just file that as an exhibit to
the testimony. And I think there's been a great deal of
discussion there, but my concern is over this idea that I am
really more concerned about high schools now and all the abuses
that have occurred in college, not only in gambling, but down
the line is moving down from colleges, to high schools. Both
deal with amateur athletes and I know we can make a lot of
jokes about the college players, but unfortunately, you're
almost able to make those kinds of jokes today about the high
school players. My favorite is that when someone leaves college
to go to the pros they take a pay cut and that didn't produce a
laugh here, but it usually does in other places. Maybe that
just went over everybody's head.
I do have concern and I still equate college sports more to
high school sports than I do to professional sports because one
is amateur and the other is professional. So that's where I'm
kind of drawing this line on whether we ought to have gambling
legalized or whatever on a sport. But again, that's still a lot
to be debated there.
Coach Osborne, as a Member of Congress, you sort of wear
two hats today and I would like to ask if you could comment on
those subjects of the potential of problems with agents as well
as the potential to pay, compensate these athletes over and
above the scholarship amounts. I know some of them, I was
surprised to hear this, actually received Pell Grants too on
top of the scholarships and I thought there was some kind of
economic test there and I didn't know that, but it was recently
disclosed in a case we had in Tennessee where we had a young
man pay off something with a Pell Grant and I'm just wondering
if you could have some comments on that for the record.
Mr. Osborne. Well, I think first of all as far as agents
are concerned, it's a real problem in that most of the
unscrupulous agents who will call your players at all times of
the year, they'll contact them as sophomores and juniors and
all you can tell them is look, if you get involved you're going
to lose your eligibility. Sometimes they approach parents.
One difficult thing right now is that they often will tell
them well, we're going to get you a special program. We're
going to have you go to California. We're going to give you a
nutritionist, so once you leave that campus, you don't need a
degree. We're going to get you drafted higher. Well, an agent
can't get you drafted higher, so it's been a real problem and
it's something that everyone fights.
Let me also say this. There's a lot of cynicism regarding
Congress. I run into it all the time. Everybody thinks Congress
is bought and everybody here knows that isn't true, maybe a few
or irregular, whatever, and the same thing is true in
intercollegiate athletics. There have been tremendous strides
taken. I know your legislation regarding the publication of
grades, maybe you don't feel it's been done the way it should
be done, but everybody that I knew publicized graduation
grades. And I think that's been a step forward. We have drug
testing. There is much less drug use in college athletics than
there is in the student body at the present time. We have
tremendous scrutiny regarding the rules. Recently, we had a
major institution got hit with violations, but compared to what
it was in the 1960's and the 1970's and the 1980's, we have
probably 2, 3, 4 percent of the major violations.
I have not in the last 10, 15 years, seen a guy get a car
or clothes or cash. Now I'm sure somebody somewhere has and
we've seen it, so don't for 1 minute think that there has not
been progress. When you talk about several hundred thousand
dollars spent on enforcement, the NCAA is us. That's what I
told everybody. Who is the NCAA? It's that entity out there,
it's those bad guys. But the NCAA is the member institutions,
it's the membership that is involved. So you've got this tug of
war. You've got the 30, 40 schools that are big. And you've got
80 or 90 or 200 or 300 that are small. And so you're always
fighting for who's going to get their share of the pie.
As far as scholarships are concerned, the one thing that I
would recommend is that we have the scholarship go not to the
cost of education, but cost of attendance because cost of
attendance is roughly $3,000 more than room, board, books,
tuition and fees because you have some transportation, you have
some clothing, you have some minimal entertainment. And I would
say most college athletes, the majority live well below the
poverty level. The cynical view again is that these guys are
getting paid off and believe me, if they're getting paid off, I
don't know about it.
So anyway, the agents are a problem. I think that we should
do something about scholarship. I agree with that very
wholeheartedly and have for a long time.
Mr. Stearns. The gentleman's time has expired. The
gentleman from Tennessee, Mr. Gordon.
Mr. Gordon. Thank you. As I mentioned in my opening
statement, the situation in many States now is that an
unethical sports agent can approach, solicit kids to leave to
give them some type of gift and then wind up with the student
losing their eligibility. Oftentimes, the schools are penalized
and yet there's no penalty for the sports agent. As a matter of
fact, there's probably an incentive to once you lure them out,
you get them in trouble, then they can't go back. So my
legislation would correct that.
I guess a couple of questions, Mr. Osborne. One is how much
of a problem do you think that is, and second, do you have
concerns or what are the pros and cons about having a Federal
uniform legislation, rather than State by State? I'll yield to
you.
Mr. Osborne. Well, I have not seen the particular language.
Maybe at some point I did, but I don't remember what you have,
but it has been thrown back on the States. We tried many times
in the State of Nebraska to get some type of legislation passed
and we always had some folks who were saying well, these guys
are being exploited and if they can get a little extra money
from an agent, they ought to be able to take it and of course
that's absolutely ludicrous. And so I philosophically am much
in favor of what you're talking about. I think we ought to have
a uniform standard. Some of the--a lot of the people who are
agents are honorable, but we have an awful lot of dishonorable
people and many of them have no professional qualifications.
They have no expertise as a financial manager. They have no
experience in contracts. They're not attorneys and I don't
think you always have to be an attorney in that line of work,
but there ought to some minimal standards that an agent should
meet and right now there aren't any in most States. And
certainly there should be some ethical considerations where if
a player is coerced into an illegal contract, there should be a
period where he can opts out, where he can get his eligibility
back. The agent would be punished. I agree totally.
So I don't think you're going to have any argument with me
in what you're proposing.
Mr. Gordon. Even if a State has a law protecting against
these types of unethical sports agents, what happens if the
athlete goes back to his home State and they don't have that or
if you have a road trip and you're going to another State that
doesn't have it, then they can talk to them at that time. So I
think clearly there are problems here. There's been an attempt
to have a uniform legislation, yet we see no more States
covered now than we saw earlier.
Mr. Osborne. I agree and I remember one time we were down
at the Orange Bowl in Miami and the starting quarterback, I was
looking for him and we were just getting on the bus to go to
the game and here he was sitting on a couch in the lobby and on
each side of him was an agent and this guy has got to go out
there and play in 2 hours and he's got an agent in one ear and
an agent in the other ear. I was not real happy, obviously, at
that point and the guy didn't court these guys. They just came
up and they were waiting for him when he came out of the
elevator. And these guys, if we had a law in Nebraska, might be
exempt, I don't know, depending on how it was written because
this was in Miami, Florida. So I do believe that there would be
some, and I guess this would be in violation of the NCAA
wishes, but I would like to see a national standard.
I think we've got to be careful that we don't try to
legislate too much. I think there's that tendency in Congress
to want to legislate everything, but I would certainly like to
see some kind of national standard on agents.
Mr. Gordon. The only halfway credible argument that I could
think that the opponents would have and the only opponent of
course is the NCAA is that this is a camel's nose on the tent,
if you do this, then what else is the Federal Government going
to do? Are they going to say that it takes 11 yards rather than
10 yards to get a first down? Do you have concerns about that
camel doing anything here?
Mr. Osborne. Well, I guess that's always a concern. I'm not
a libertarian, so I trust Congress to do the right thing most
of the time, but I do see some problems in the present system.
We have relied on the States. The States haven't come through
uniformly and I think it would be very helpful if we did have a
uniform standard nationwide, so I would like to see your
language and I'm quite certain I would be very favorable to
what you're talking about.
Mr. Gordon. Thank you.
Mr. Stearns. I thank the gentleman. Mr. Terry?
Mr. Terry. This is a question to you, Coach, first. There
was a statement made that coaches aren't allowed to speak on
NCAA matters. Did you ever feel as a coach that you weren't
allowed to speak on behalf of students? I know that you
couldn't, in Denver, criticize the referees. I did that, but
how about just various policies to help students? I remember
you being somewhat vocal on matters of students' rights. Did
you feel that the NCAA muzzled you when you were coach?
Mr. Osborne. No, I don't think so. I felt very free to
speak on any issue. I think the idea being that some folks have
not come forth on the gambling issue who may be favorable
toward gambling, but whatever, they want to avoid the stigma.
They're afraid of retribution from the NCAA. And that may be.
Maybe we can find some folks out there, I don't know. I haven't
run into them, but I'm sure that Congresswoman Berkley may know
of some. But I would say the overwhelming number of coaches and
players would say that gambling has really not been very
helpful and has probably been very harmful to intercollegiate
athletics and sometimes in high school because some of the most
pressurized situations that you'll find down in the Gulf Coast
of Texas where everybody, they're betting their paycheck, you
know? And when your week's paycheck is up for grabs on the high
school football game on Friday night, Raymond Barry's dad was a
high school coach down there. He said I coached NFL and he said
I've never experienced pressure like my Dad did. So gambling
affects all of us and certainly the high school athletes as
well.
Mr. Terry. That kind of leads or dovetails into my next
question for you to expand on one of the comments that you made
and there's at least one member of the audience that was very
emphatic in their facial expressions, disagreeing with the
comment about laying off or hedging with legal bets in Las
Vegas and the State of Nevada and that there is a connection to
the black market, underground bookies and a connection to those
people in Las Vegas. And when I was at the University of
Nebraska in the early 1980's, there always seemed to be the
frat house bookie. I was never in a frat, but they were pretty
common on campus and when I talked to one of them about how
they transact business because I was very curious, he told me
exactly what you said they do and that they get to a certain
level, then they lay off and then they lay off and it's the big
dollars somehow get to Las Vegas. Would you explain how you
learned that process or why you feel that it is connected to
legal gambling and then Shelley, if you would like to follow up
and say your experience, why you think the two aren't related.
But I'll let Coach go first, since he's a Nebraskan.
Mr. Osborne. We had a guy who was a former player and this
was several years after he got out and I always liked the guy
and I thought he had a lot of promise and he got started by
going to Las Vegas and laying down bets. It wasn't always on
intercollegiate sports, but he would fly out there, he would
get money from various people and he'd go out there and bet
legally, I guess, for those people and I'm sure at one point he
must have gotten into college sports betting as well, maybe
that was his main activity. So I know for a fact because he
told me that that's what he did. And he later spent some time
in jail. It was a tragic case because here was a guy that was
very talented and that was, among other things, what he started
doing.
So I do know that there are cases where if somebody is a
small time operator and he can't cover all the action that that
is a possibility to go where it is legal, but no matter what
parameters we talk about, I do not understand the logic of
saying we're going to do this for this group of people, we're
going to let some school do more than room, board, books,
tuition and fees and all the rest of them have to do room,
board, books, tuition and fees. Why would we do that? We don't
do that in anything else, so why would we do that here? It does
not pass, it doesn't bear scrutiny, I don't believe.
And so--and I think if we're going to make it legal in Las
Vegas and we want to be consistent, we believing gambling is
good, then let's do it in every state. Let's do it one way or
the other. Let's not do 49 and 1. Let's do 50 and 0, one way or
the other. And I think that is within the purview of Congress
to do that and I think that should be done because we don't do
that in very many areas that I know of.
Mr. Terry. Shelley?
Ms. Berkley. Let me make it emphatically clear and I know
that the next Panel will probably be able to address this
better than I, but laying off bets is absolutely illegal in the
State of Nevada and if you are caught, you will go to jail.
Now, no one is in favor of illegal betting on collegiate
sports. As I said, before you came in, $380 billion is spent
illegally every single year in this country; $2 billion is bet
through the Nevada sports books where you have to be 21 in
order to place a bet and it's a very well regulated industry in
the State of Nevada.
If you take this to the final conclusion, if you outlaw, if
the line is the problem, well, if it's not legal in the State
of Nevada, the FBI is not going to be able to discover with the
accuracy that they do now any illegal betting activity that's
taking place and any scandals that are taking place throughout
the United States on our college campuses and the FBI can
testify to that because they testified last year that they were
able to use the Nevada books in order to detect any illegal
activity.
If the line isn't published in Las Vegas and it is
published in the Caribbean where Coach Osborne said it was,
then if the line is the problem, then not only would you have
to ban the line being posted in the newspapers, then you might
as well tell the radios not to broadcast the games and you
might as well close down the television stations so that they
don't broadcast the games and then the NCAA won't get the $6
billion that they got from CBS in order to broadcast the games
and you won't have all of these schools competing for those
dollars that the NCAA gives them for winning the championship
and being in the Final Four.
So I don't think we want to get into that and I certainly
don't think that Congress wants to start regulating the way
people behave in their recreational activities in the United
States of America. And in the State of Nevada, collegiate
sports betting is an amenity and a recreational activity that
people partake in when they're coming to Las Vegas to enjoy a
wholesome family vacation.
Mr. Stearns. The gentleman's time has expired. Mr. John?
Mr. Towns. Would the gentleman just yield 1 minute?
Mr. John. Sure, I'll be glad to yield to the ranking
member.
Mr. Towns. I keep hearing this one state. Isn't it five
States that have the exemption? I think Montana, New Jersey,
Oregon and also Delaware and Nevada makes five.
So it's not just one. I just want the record to reflect
that.
Ms. Berkley. The difference is nobody else does it, but
Nevada.
Mr. Towns. Right. But five States have the exemption.
Right, thank you.
Mr. John. I want to thank the chairman and the ranking
member for putting this hearing together. I believe that Coach
Osborne and Ms. Berkley will agree with me that collegiate
athletics and sporting events have changed over the last 10
years and some have been for the good and some have been for
the bad, but I believe and this is more of a commentary than a
question I'd like you guys to comment on it. I believe that the
problems that have emerged, good problems or bad problems, have
really been about commercialization. Let me give you an
example. This is a great example to show you about the money
that's involved in collegiate sports. Now it may be not
pleasant for my two colleagues from Tennessee to hear this
example, but it's a good example.
LSU this year happened to have a pretty good year. They
were in the SEC championship game against Tennessee. The
difference between them losing that game and going to the
Cotton Bowl and winning that game and going to the Sugar Bowl
was $10 million. Ten million dollars was the difference, split
up between the SEC schools and the remainder going to the
University. When you factor in the TV contracts, the equipment
contracts, I don't know of a jersey that I don't see with the
Nike swoosh and good for them. And then you've got stadium
advertising. I think one of the only unnamed stadiums that I'm
aware of as far as professional sports in the country is the
Louisiana Superdome and that's about to fall because they've
advertised it. But it's all about the money and I think that it
is something that we need to look at. Everything trickles from
there.
The winning at all costs attitude is what the Knight
Commission Report talks about. And what does that mean? That
means we must win because if we win, we'll get those big
contracts. And I think that really is where the fertile ground
is for the unethical treatment of or conduct of some of the
athletes, some of the schools that get on probation. And that's
really, I believe, the root of some of the problems.
I don't think commercialization is necessarily all bad.
There are some good things that come out of the
commercialization of college sports. We get to see more games
with pay per view, you know. It's entertainment. I happen to be
a very big football fan, so it's very good in some ways. But I
also believe that it is on the backside that we need to take a
look at. We've got amateur status. What does that mean? I think
that the definition may have stayed the same, literally, but I
think it's taken on a whole different idea of what an amateur
status means and how far you can go.
I think there's a whole realm of issues here to deal with.
This is the year 2002 and times have changed and maybe we need
to change some things about the way we deal with all of this.
One question that I have as a result, involves gambling. Do
we know the scope and the magnitude of illegal betting in this
country as a percentage of the total bets we're coming off the
heels of a Super Bowl and that happens to be from what I am
told, one of the biggest gambling sports days of the year
because most folks that may not legal or illegal put a bet on a
ball game, will do it on the Super Bowl because of all the pomp
and circumstances that happen.
Do we know the scope of that? I'm curious, dollar amounts.
I mean I don't know the answer to that. Maybe it's a question
for the next panel.
Mr. Osborne. I don't know that anybody knows. If it's
illegal, it's not made public and I'm sure there are estimates
and I'm sure folks on the other panel and maybe Congresswoman
Berkley can give you some figures. I could not do that.
Mr. John. And I apologize, I understand that maybe this
question was answered earlier. Go ahead, Shelley, I'm sorry.
Ms. Berkley. Okay, I actually did mention it, but I'm glad
you brought it up again. According to the FBI, approximately
$380 billion is bet illegally in this Nation every year and $2
billion is bet legally in the State of Nevada, but if I could
direct your attention to H.R. 641, one of the provisions of 641
is that we actually conduct a study to see the depth of the
problem and what we can do in order to fix it before we pass
any legislation that outlaws legal sports betting in the State
of Nevada where it's only legal and practiced in one state. So
I would submit that if we pass and perhaps with the NCAA
support, H.R. 641, that we can conduct studies, do an
investigation and find out the depth of the problem, what we're
talking about before we try to fix something that we don't know
what it is we're trying to fix.
Mr. John. That's my follow-up question. This is nothing
new. I mean sports betting has been around for quite a while. I
guess the bottom line answer is there's some legislation out
there. Should we make all sports on collegiate betting sporting
events illegal? Okay, let's look at that from a standpoint of
if we do that, does it solve our problem and I'd like for
either one of you to answer that. I mean if we make it illegal,
does it stop the, as my friend from Nebraska says, the frat
bookies? Because they were there in 1980 when I was at LSU.
Mr. Osborne. No, it isn't going to stop that. We understand
that. And we're not going to stop counterfeiting. At one time
we couldn't stop bootlegging, but the question is what is the
national stance? What are we going to do? What is the standard?
This is the body that's supposed to set the standards and are
we going to say okay, we give you a pass and we don't give you
guys a pass. That's the thing that I can't understand.
One other thing I might mention is that until, I believe,
this last year, it was illegal in the State of Nevada to bet on
teams from the State of Nevada in Nevada. Now somebody might
have recognized the fact that there was the potential for great
harm here. Now once this began to come to light and this
legislation was brought forward, then that loophole or that was
plugged and they began to say we can bet on our own teams, but
for a period of time, they could not bet on Nevada teams in Las
Vegas or in Nevada and I think because people recognize that
there are some inherent harms. And the reason I am here today
is that there were four major scandals on college campuses in
the 1990's and that was more than we had had since 1940
combined. And so it is a huge problem and if Congress is going
to sit here and look the other way to some degree and I grant
you that there's a lot that's going on on college campuses and
we're not going to put it out, but do we let that go in one
State and send a signal that it's okay? And the last thing I
would mention is this. The mention has been made that the FBI
says well, this is a valuable took that we have Las Vegas that
we can go to because that's the tip.
I would like those who follow to give us some data as to
how many cases actually were uncovered by the FBI because my
understanding, it's usually because somebody talked. And it may
be a case where the FBI picked up on some unusual odds, but I
believe in the great majority of cases that has not been the
case, but that is my conjecture and I may be wrong.
Mr. John. Coach, real quick, and I know I'm pretty much out
of time, but if the chairman----
Mr. Stearns. Go ahead, Mr. John.
Mr. John. [continuing] will give me a little latitude here.
The four incidents that you referred to in the 1990's, is there
any way to connect them to commercialization or the money in
sports or gambling? Or were you specifically talking about
gambling situations?
Mr. Osborne. These were gambling situations.
Mr. John. They were all gambling situations?
Mr. Osborne. Yes.
Mr. John. They didn't have to deal with students getting
cars and jobs and other things?
Mr. Osborne. They were point shaving and that type of
thing. As I said----
Mr. John. Are there still incidents to your knowledge in
schools where violations and probation arise out of
commercialization and the money that's involved in college
athletics?
Mr. Osborne. As I mentioned earlier, my experience is that
the number of outright violations of cars, the clothes and the
cash, that type of thing,k has decreased dramatically. I would
say by 90 percent. After SMU got the ``sudden death'' penalty
in 1985, I didn't see--we recruited nationwide. Most schools
recruit in two or three States. We recruited everywhere. And so
we had a pretty good feel as to what was going on around the
country. We didn't know everything, but I can honestly say we
went about 10 years there and I didn't think that I had a
player bought away from us.
Mr. John. That's because of the enforcement or the
recognition that it was happening?
Mr. Osborne. Well, I think the ``sudden death'' penalty
sent quite a signal. SMU was shut down for 2 years. They didn't
play a game. And when that happened, I think people realized
that this was serious business. Most coaches now have written
into their contract, that if they knowingly violate the rules,
they're gone. And they get no compensation. That's very
appropriate.
Mr. Stearns. The gentleman's time has expired.
Mr. John. I thank the chairman.
Mr. Stearns. Mr. Pitts.
Mr. Pitts. Thank you, Mr. Chairman. Thank you,
Representative Berkley and Representative Osborne for your
testimony.
Representative Berkley, you mentioned that $380 billion is
wagered illegally in sports betting according to the FBI. Do
you know how much of that is wager illegally for collegiate
sports?
Ms. Berkley. That is the collegiate sports amount.
Mr. Pitts. $380 billion. Do you know how much is wagered on
professional sports illegally?
Ms. Berkley. I do not know. I could--$380 billion is bet
illegally in this country every year. About a third of that is
bet on collegiate sports.
Mr. Pitts. One third on collegiate. Do you know what
percentage of legal sports wagering is for collegiate sports?
Ms. Berkley. Say that again?
Mr. Pitts. What percentage of legal sports betting is
wagered on collegiate sports?
Ms. Berkley. I believe $2 billion is bet legally on
collegiate sports in Nevada's books.
Mr. Pitts. That's collegiate.
Ms. Berkley. Yes.
Mr. Pitts. Thank you. And can you tell us where the
majority of this sports betting is conducted? Is it in local
communities? Is it internationally? Is it off-shore? Do you
have--does the FBI know that?
Ms. Berkley. I believe we can provide you the information,
but it's my understanding that that's--most of that illegal
sports betting on collegiate sports is bet on the college
campuses.
Mr. Pitts. I guess I have a couple questions on just the
general welfare of student athletes, either of you can respond.
Are the current rules and regulations regarding amateur
athletes being adhered to and being enforced. Coach Osborne,
you might want to respond. And are collegiate athletes more
susceptible to outside influence than professional athletes?
Mr. Osborne. Well, yes, I guess my feeling is as far as
NCAA rules there is greater adherence now than there was 20 to
30 years ago. It's not perfect, but it's a lot better than what
most people think. For instance, an athlete is only allowed 20
hours a week at practice. We have to document that. I mean we
could not have 4 hour practices. We never practiced more than 2
hours. And that included the weight room. That included
anything that you did. And at one time, there were kids
spending 60 hours a week on their sport and they had to go to
school. And I think that that's fairly well enforced. I'm sure
there's people that fudge on it and some people require some
Sunday deal and they don't count it and they shouldn't do that.
As far as medical care, somebody mentioned earlier that if you
provide it for athletes, you've to pay for all the other
students on campus, but I guarantee you, we didn't give a knee
operation to everybody in the University of Nebraska that hurt
their knee in intramural sports. We took care of our players.
And that was perfectly legitimate. And I don't care what it
was, if it was football-related, they got taken care of and
they got the best that was available. We sent them to
specialists. The drug testing, I think that you'll find that
the number of drug cases in NCAA sports is probably 2 percent
or less. And you won't find that anyplace else, in high
schools, junior high schools or colleges. It is regulated and
we got rid of them if they couldn't handle it.
The graduation rates aren't what they should be, but the
problem is we got those guys sometimes within 3 hours of
graduation and the agent grabbed them when they were done with
their eligibility, so we tried very hard to get them graduated
before their eligibility was done. And if it's a 4-year player,
you only had 3\1/2\ years. And after that, the agents had at
them and NFL and all that type of thing and that really is very
difficult.
The other thing is the way it's computed in graduation
rates. As you probably know, if a player comes to your school,
decides to transfer to another school and then graduates, he
counts as a zero for your school. You bring in 25 guys in
football and you have 5 of them transfer and they all graduate,
you're already down to 80 percent because you've lost those 5
as far as your graduation rates. So sometimes those graduation
rates are a little misleading. We did graduate at roughly 70
percent of our players which I thought was pretty good under
the circumstances, but still, anyway, I think that things are
relatively good, but the commercialization is huge and going
from 9 games to 12 in football which is standard now and it's
strictly to make money because football makes money. In some
cases, basketball makes money and you're having to pay for
Title IX and all of the other sports. And so we've had a
tremendous exponentially large increase in sports. We've gone
from 15 sports to 21, 22, 23, sometimes 30 sports. And it's
very difficult to pay for that and football and basketball are
basically doing it.
Mr. Pitts. And do you want to comment on the susceptibility
of college athletes to outside influences in comparison to
professional athletes, Coach? Are they more susceptible?
Mr. Osborne. Well, sometimes. I mentioned that most college
athletes probably 50 percent live below the poverty line. We've
had guys, we make them eat on the training table because if you
gave them the money they would spend it the first 3 weeks and
sometimes the last week they were--they didn't have enough to
each on, so they had to eat on the training table. And so that
makes you susceptible and that's one reason I say that it
shouldn't be room, board, books, tuition and fees. It should be
room, board, books, tuition, fees, plus cost of attendance
which is extra money for travel and clothing and most clothes
that figure is available and runs around $3,000 extra. The Pell
Grant, somebody mentioned that earlier, the Pell Grant is not
over and above the scholarship. It can be figured in. You can
cut down on the scholarship if a walk on comes and doesn't have
scholarship, he can use a Pell Grant, but you get up to the
room, board, books, tuition and fees.
Mr. Pitts. Thank you, my time is up.
Mr. Stearns. I thank you. The gentleman's time has expired.
All questions, I think, have been expired, so we want to thank
my colleague, Ms. Berkley and my colleague, Mr. Osborne, very
much for your indulgence and your helping us out in this
hearing and we'll see you later.
And now our second Panel will come forward. Bill Saum,
Director of Agent, Gambling and Amateurism Activities, the
National Collegiate Athletic Association; Mr. Frank Fahrenkopf,
Jr., President and CEO, American Gambling Association; our
former colleague, Tom McMillen from Knight Foundation, the
Knight Commission on Intercollegiate Athletics; and Mr. Ramogi
D. Huma, Chairman, Collegiate Athletes Coalition; and Mr.
Michael Aguirre, Division I Student-Athlete Advisory Committee
of the National Collegiate Athletic Association and Mr. Lennon
is available to answer questions, if you have them.
So we'll just start from my left and go to my right.
Mr. Saum, we welcome you and look forward to your
statement.
STATEMENTS OF WILLIAM S. SAUM, DIRECTOR OF AGENT, GAMBLING AND
AMATEURISM ACTIVITIES, NATIONAL COLLEGIATE ATHLETIC
ASSOCIATION; FRANK J. FAHRENKOPF, JR., AMERICAN GAMING
ASSOCIATION; TOM McMILLEN, THE KNIGHT COMMISSION ON
INTERCOLLEGIATE ATHLETICS; RAMOGI D. HUMA, CHAIRMAN, COLLEGIATE
ATHLETES COALITION; AND MICHAEL AGUIRRE, NCAA DIVISION 1,
STUDENT-ATHLETE ADVISORY COMMITTEE
Mr. Saum. Thank you, Mr. Chairman. On behalf of the
National Collegiate Athletic Association, I am pleased to have
this opportunity to provide the committee with the NCAA's
perspectives on the impact of sports wagering on college
athletics. The NCAA membership has adopted specific legislation
prohibiting athletics department staff members, conference
office staff members and student athletes from engaging in
sports wagering activities as they relate to intercollegiate or
professional sporting events.
As a sports organization, the NCAA is well aware of the
direct threat of sports wagering that it poses on the integrity
of intercollegiate contests. We are all aware of the recent
point shaving scandals on the campuses of Arizona State
University and Northwestern University. According to Federal
law enforcement officials, more money was wagered in the
Arizona State case than on any other point shaving scam in the
history of college athletics. It is important to note that over
$1 million was wagered legally in Nevada casinos in the Arizona
State case.
A blanket prohibition on collegiate sports wagering will
significantly reduce the outlets available for placing wagers.
The NCAA also supports legislation to clarify the ban on
internet gambling. The proliferation of internet gambling is
fueling the growth of illegal sports gambling on college
campuses across the country. Federal legislation would make it
clear that internet technology cannot be used to circumvent
existing laws which prohibit sports gambling.
The profile of the typical college student who gambles is
someone who believes he or she can control his or her own
destiny, is willing to take risks and believes that he or she
possesses the skill to be successful in their endeavor. In
other contexts, these are considered positive characteristics.
These are traits that we recruit our athletes, but this profile
is representative of many college athletes and may, in part,
explain why some student athletes are drawn to sports wagering.
NCAA investigations have revealed that there is a high
incidence of wagering among college students. It is believed
that student bookies are present at every institution. The
advent of internet wagering, which now enables college students
to place wages over the internet from their dorm rooms raises
even greater concern. There is certainly no dispute that the
impact of sports wagering is being felt on college campuses
across the country.
On June 18, 1999, the federally appointed National Gambling
Impact Study Commission convened by Congress to examine the
effects of sports wagering on the American society issued its
final report after a 2-year comprehensive study. The
Commission's report included a recommendation urging all
currently legal sports wagering be banned. In making this
recommendation the Commission said ``sports wagering threatens
the integrity of sport. It puts student athletes in a
vulnerable position. It can serve as a gateway behavior for
adolescent gamblers. And it can devastate individuals and
careers.''
Placing legal wagers on games played by young people should
not be permitted. The existence of any type of gambling,
illegal or legal, on sporting events is a direct threat to the
integrity of the contest. The legally and illegally wagered
dollars on college sporting events are thought to be in the
billions. Complicating the matter is the money is laundered of
illegal sports books through legal sports books. Steve
DuCharme, former chair of the Nevada Gaming Control Board, is
quoted in a February 1999 Sports Business Journal article as
saying the following: ``We've taken steps to crack down on the
amount of illegal money being 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 wire taps, it is millions of dollars.''
The NCAA has taken significant steps to address the very
real problems associated with wagering on college sports. The
NCAA has established policies that prohibit sports wagering by
college athletics personnel, student athletes, and we, NCAA,
employees. The NCAA has instituted background checks on men's
and women's basketball officials. This was done to ensure that
the game officials have not been involved in sports wagering
issues. In addition, the NCAA sponsors the following:
educational programs that provide assistance to campus
administrators to conduct sports wagering workshops, broadcast
of anti-sports wagering public service announcements during
games on CBS and ESPN, the production of a booklet in
partnership with the National Endowment of Financial Education
entitled ``Don't Bet on It'' and also working with our student
athletes on financial management strategies.
Legalized amateur sports wagering in Nevada continues to
blunt efforts of the NCAA and higher education to combat
college sports wagering. The insidious effect of legalized
wagering on college sports has crept far beyond the Nevada
State line. By clearly making gambling on college sports
illegal everywhere, all the time, we will strengthen our
efforts to maintain the integrity of college sports. This
Nation's college and university system is one of our greatest
assets. Betting on the outcome of college sporting events
tarnishes the integrity of the sport and diminishes the esteem
in which we and the rest of the world hold the United States'
colleges and universities. While we recognize that a ban of
college sports wagering will not eliminate all gambling on
college sports, it is a significant start.
Our goal is to protect the student athletes and remove the
unseemly influences of sports wagering on our amateur athletics
and the games they play. We look forward to working with you to
close the gap that does not allow legal betting on college
sports to continue, but also fuels illegal betting on college
games.
Thank you.
[The prepared statement of William S. Saum follows:]
Prepared Statement of William S. Saum, Director of Agent, Gambling and
Amateurism Activities, National Collegiate Athletic Association
On behalf of the National Collegiate Athletic Association (NCAA), I
am pleased to have this opportunity to provide the committee with the
NCAA's perspectives on the impact of sports wagering on college
athletics, students and student-athletes.
The NCAA is a tax-exempt, unincorporated association of
approximately 1,260 colleges, universities, athletics conferences and
related organizations devoted to the regulation and promotion of
intercollegiate athletics for male and female student-athletes. Like
many other sports organizations, the NCAA has a clear, direct policy
regarding sports wagering. The NCAA prohibits participation in any form
of legal or illegal sports wagering because of its potential to
undermine the integrity of sports contests and jeopardize the welfare
of the student-athlete and the intercollegiate athletics community. The
NCAA membership has adopted specific legislation prohibiting athletics
department staff members, conference office staff and student-athletes
from engaging in sports wagering activities as they relate to
intercollegiate or professional sporting events. These same rules apply
to NCAA national office staff.
Impact on the Integrity of the Sports Contest
As a sports organization, the NCAA is well aware of the direct
threat sports wagering poses to the integrity of each intercollegiate
contest. In the early 1950s, the academic community and the public were
shocked to learn that the City College of New York men's basketball
team was involved in a point-shaving scandal. We are all aware of
recent point-shaving scandals on the campuses of Arizona State
University and Northwestern University. The magnitude of these and
similar incidents should not be underestimated. According to federal
law enforcement officials, more money was wagered in the Arizona State
case than on any point-shaving scam in the history of intercollegiate
athletics. It is important to note that over $1 million was wagered
legally in Nevada casinos in the Arizona State case. Likewise, in the
Northwestern case, wagers were placed legally in Nevada casinos.
Both legal and illegal sports wagering have been at the heart of
nearly every major collegiate sports wagering scandal. However, the
presence of any type of sports wagering, whether it be legal or
illegal, is a potential threat to the integrity of our contests. We
believe that eliminating sports wagering will provide important
positive benefits for intercollegiate athletics. Nevada casinos have
been helpful in monitoring unusual shifts in wagering on college games,
but this alone does not ensure protection from point-shaving scandals.
In fact, some point-shaving scandals have used Las Vegas sports books
without being detected. A blanket prohibition on collegiate sports
wagering will significantly reduce the outlets available for placing
wagers and, in doing so, will undoubtedly have an impact on the number
of individuals betting on the games. The NCAA also supports legislation
to clarify the ban on Internet gambling. The proliferation of Internet
gambling is fueling the growth of illegal sports gambling on college
campuses across the country. In 1992, Congress enacted the Professional
and Amateur Sports Protection Act to prohibit the spread of state-
sponsored sports gambling. The intent of Congress in enacting this
statute is being undermined by the growth of Internet gambling. Federal
legislation would make it clear that Internet technology cannot be used
to circumvent existing laws, which prohibit sports gambling.
The influence of sports wagering is far reaching, and sports
organizations continually live in fear that sports wagering will
infiltrate and undermine the contest itself.
Impact on Student-Athletes
As director of agent, gambling and amateurism activities, and a
former campus administrator and coach, I am acutely aware of the impact
sports wagering can have on the lives of college student-athletes. I
have witnessed students, their families and institutions publicly
humiliated. I have seen students expelled from college, lose athletics
scholarships worth thousands of dollars and jeopardize any hope of a
professional career in athletics. In most cases, the scenario is
strikingly familiar. Student-athletes who have begun wagering on sports
incur losses beyond their means to repay and, as a result, become
vulnerable to point-shaving schemes. Sometimes they participate in such
activities voluntarily in a desperate attempt to erase their
outstanding debt; other times, they are compelled by the threat of
personal injury. In the latter cases, organized crime is often
involved, and there are cases where student bookmaking operations can
be traced back to organized crime.
The profile of the typical college student who gambles is someone
who believes he/she can control his/her own destiny, is willing to take
risks and believes that he/she possesses the skill to be successful in
this endeavor. In other contexts, these are considered positive
character traits. This profile is representative of many college
athletes and may, in part, explain why some student-athletes are drawn
to sports wagering.
NCAA investigations have revealed that there is a high incidence of
wagering among college students. It is believed that student bookies
are present at every institution. The advent of Internet wagering,
which now enables college students to place wagers over the Internet
from their dorm rooms, raises even greater cause for concern. There is
certainly no dispute that the impact of sports wagering is being felt
on college campuses across the country.
National Gambling Impact Study Commission Recommends Ban on College
Sports
On June 18, 1999, the federally appointed National Gambling Impact
Study Commission convened by Congress to examine the effects of sports
wagering on American society, issued its final report after a two-year
comprehensive study of all forms of legal gambling activity.
The commission's report included a recommendation urging a ban on
all currently legal sports wagering on college and amateur sporting
events. In making this recommendation, the commission said, ``Sports
wagering threatens the integrity of sports, it puts student-athletes in
a vulnerable position, it can serve as a gateway behavior for
adolescent gamblers, and it can devastate individuals and careers.''
Placing legal wagers on games played by young people should not be
permitted. The existence of any type of gambling, illegal or legal, on
sporting events is a direct threat to the integrity of the contest.
Participants in college sporting events are even more susceptible (than
professional athletes) to outside influences who may attempt to exert
pressures on them to ``fix'' the outcome of a contest. The development
of new gambling technologies, such as programs designed to allow casino
bettors to wager on each individual play in a game, will undoubtedly
increase the likelihood that college student-athletes will be pressured
and enticed into schemes where they participate in influencing the
outcome of a given college sporting contest. We must remember that
these are young people; betting on their performance is unseemly and
inappropriate.
Legal College Sports Wagering Operations Provide Avenue for Illegal
Sports Wagering Money Laundering.
The legally and illegally wagered dollars on college sporting
events are thought to be in the billions. Complicating the matter is
the money laundering of illegal sports book dollars through legal
sports books. Steve DuCharme, former chair 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 being 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 Wagering Would not Result in a
Serious Threat to the Nevada Economy.
Fears that federal legislation prohibiting sports wagering in
Nevada will be a ``serious threat'' to the Nevada economy are not
supported by the facts. In 2000, approximately $2.3 billion was wagered
in Nevada sports books. Casinos retained $124 million, approximately
5.33 percent of the total amount wagered on sports. According to Mr.
DuCharme, the amount kept by casinos on sports wagering is ``very
small'' compared to other casino games. Furthermore, the amount wagered
on college sports is only a little more than one-third of the total. In
an industry driven by billions of dollars (2000 total casino revenues
were $9.6 billion), the elimination of collegiate sports wagering will
have little impact on state revenues or on the casinos' bottom line.
The amount bet on college sports is reportedly only four-tenths of one
percent of overall casino revenues.
The existence of legal sports wagering in Nevada is actually
limiting the growth of the Nevada economy in some regards. Most amateur
and professional sports leagues have policies against franchise
location and events staged in Nevada because of the presence of sports
wagering.
College Sports Wagering Serves as a Gateway for Youth to Addictive
Gambling Behavior--Youth Gambling Problem is a Concern.
We are concerned that legal collegiate sports wagering fuels a much
larger illegal collegiate sports wagering trade, impacting America's
youth at an alarming rate. Sports wagering is a serious problem among
teenagers under the age of 18. A 1999 Gallup Poll reports that
teenagers 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 90s'' by the American Academy of Pediatrics, its research indicates
that there are over one million United States teens who are addicted to
gambling. A recent Harvard School of Medicine report estimates that six
percent of teenagers under 18 have serious gambling problems. In a June
report of the 1999 Gallup Poll, 18 percent of teenage respondents said
they had bet on college sports, contrasted with nine 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 wagering everywhere
in the United States 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 wagering.
NCAA Takes Concrete Steps to Address College Sports Wagering--Adopts
No-Nonsense Policies and Education Outreach Programs.
The NCAA has taken significant steps to address the very real
problems associated with wagering on college sports. The NCAA has
established policies that prohibit all sports wagering 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, directors of athletics
and NCAA employees. The NCAA has 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 the following: educational programs that
provide assistance to campus administrators to conduct sports wagering
workshops, broadcasts of anti-sports wagering public service
announcements during the championship games aired by CBS and ESPN,
production of a booklet in partnership with the National Endowment for
Financial Education entitled ``Don't Bet On It,'' which educates
students about the dangers of sports wagering and acquaints them with
good financial management strategies. We also are currently working to
develop research in the area of youth gambling and campus gambling.
The NCAA and its Membership are Committed to Improving the Student-
Athlete Experience
Opponents of an effort 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 previously
mentioned, the NCAA supports a number of programs that address the
sports wagering 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 84
championship events for men and women at the Divisions I, II and III
levels 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 an opportunity to
play college sports. The NCAA and its member institutions continue to
examine ways to provide student-athletes with more support and
enrichment opportunities, including gambling-related education,
research and outreach activities.
Conclusion
Legalized amateur sports wagering in Nevada continues to blunt
efforts of the NCAA and higher education to combat college sports
wagering. The insidious effect of legalized wagering on college sports
has crept far beyond the Nevada state line. Even though sports wagering
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 all the time, we will
strengthen our efforts to maintain the integrity of college sports.
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 United States colleges and universities. While we
recognize that a ban on collegiate sports wagering will not eliminate
all gambling on college sports, it is a significant start. Our goal is
to protect student-athletes and remove the unseemly influences of
sports wagering 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.
Mr. Stearns. I thank the gentleman.
Mr. Fahrenkopf.
STATEMENT OF FRANK J. FAHRENKOPF, JR.
Mr. Fahrenkopf. Thank you, Mr. Chairman, members of the
committee. Mr. Chairman, I've wandered the halls of this
Congress for almost 20 years now and prior to that time the
halls of my State legislature in Nevada and I've always thought
that the basic test for any proposed piece of legislation is
that there should be a demonstrable cause and effect
relationship between the purported problem to be addressed by
the legislation and the proposed legislative action. I think in
many ways Congressman John asked questions relating to that. We
submit to you that the proposal by the NCAA in dealing with
this issue fails, not only the so-called nexus test, but more
importantly I think they fail the students who they should be
serving. And I'm not only talking about student athletes. I'm
talking about the general student body on campuses.
We accept as valid the allegations of the NCAA, in fact,
they've testified not only on the Hill here, but testified
twice before the National Gambling Impact Study Commission that
every college campus in America has an illegal student bookie
on that campus taking illegal bets from students on NCAA
sanctioned events. We don't argue with that. And with the
numbers that many of your questions have already brought out
from earlier witnesses, it's not surprising. $380 billion is a
lot of money and I see Congressman Pitts has left, about one
third of that amount is bet on college sports. And in Nevada,
on the 1 percent that's bet in Nevada legally, it's also about
the same ratio, one third of the amount that's bet. And I want
to make clear that in Nevada, not only is it regulated and
policed and taxed as Congresswoman Berkley indicated, and you
not only have to be 21, but you have to be physically present
within the State of Nevada. You can't pick up the telephone
from DC or your home State and call Nevada and place a bet.
Physically present within the boundaries of the State of
Nevada. That's very, very important and I'll come back to that
in a moment.
Now I've always considered Tom Osborne a god. Great coach
and a god to me. In fact, in my old political days I had him
testify twice before the platform committee of the Republican
Conventions that I presided over and I hate to disagree with
him, but I do have to disagree with him on two things. No. 1,
there was some testimony he gave about four incidents in the
1990's which exceed all the--you have a packet from us. And in
that packet, there's a chart. It shows that between 1945 and
1974, there were 42 incidences of point shaving. There were no
Nevada sports books then. Since then, since 1975, there have
only been 4 instances. And the citations are here where you can
find a listing of those. So I disagree with the coach and I
think he got bad research from somebody.
I also disagree with him on the use of the word
``loophole.'' He used that word with regard to Nevada. If you
go back and look at the legislative history in both Houses of
this Congress, in 1992, when PASPA was passed, Nevada and four
other States were granted exemptions. Nevada, the legislative
history says because of their strong history of tight
regulation, control and policing and because of its
contribution to the economy of the State of Nevada. Three other
States had State lotteries that were using wagers on athletic
events. They were grandfathered. And the State of New Jersey
was given 1 year from the passage of PASBA to decide whether or
not they wanted to put in place legal sports books. So it was
not a loophole in any sense of the word.
Now I don't disagree with anything else except one other
thing that Coach Osborne said. When he talked about stress and
pressure on athletes and coaches, that's not coming from
Nevada. The stress and pressure on those athletes and coaches
are coming from the illegal bookies that are on those campuses
and surround those campuses, that are out in the parking lot
before those games. It's not Nevada. And there's no evidence
whatsoever. This is the fourth or fifth hearing on the Hill
that I've attended. Some I've testified in in the last 3 or 4
years. Not one single witness has said and Coach Osborne
himself said, that doing away with the legal sports wagering in
Nevada is not going to solve the problem that is being faced.
The only allegation of any impact whatsoever is that
somehow bets are being laid off. And let me tell you, maybe it
was possible 10 or 20 years ago. Anybody who bets $2500 or more
on a sports wager in Nevada where it's legal has to not only
show identification, but has to fill out forms showing Social
Security Number and other information much similar to what we
get with our securities reporting requirements that banks and
other financial institutions have to do, historically, that's
been out there for money laundering and that you've all been
with concerned with with the Patriot Act and some of those
things with the Bank Secrecy Act. So they can't do that . The
average bet in a sports book in Nevada is $50. And if the total
amount being wagered on sports is $380 billion and we know that
1 percent is being wagered in Nevada, there's certainly not
much being laid off. If you get law enforcement people in front
of you, they'll tell you it is not being laid off in Nevada.
That small time bookies lay it off in big cities with other
illegal bookies. That's where it's being laid off, not in
Nevada. And clearly, the question of what should be symbolic
about whether you like sports wagering or not, isn't enough and
the Congresswoman touched on it for a moment. If you in your
State have a State lottery that you control, that you regulate
or you have horse racing or you have dog racing, it all takes
place within the borders of your State under the tenth
amendment to the Constitution. And we feel very strongly that
what is going on with sports wagering in Nevada takes place
only within the State, only affects people who are physically
present and there are severe tenth amendment problems.
So what is the right approach? Where can we get the nexus?
And I, Mr. Chairman, would submit that the NCAA actually came
up with solutions. You have in your packets a letter, written
by Cedric Dempsey, the President of the NCAA, to the National
Gambling Impact Study Commission. This was at hearings very
much like this where they laid out the problem. The Commission
said what do you recommend NCAA? What should we do to solve the
difficulties that you're talking about? And here it is. Nowhere
in this document does it say anything about doing away with
legal betting in Nevada. Mr. Saum testified on two separate
occasions before that Commission and said they had no effort
and they were not making any effort to do away with Nevada, but
they did make some suggestions. The NCAA talks about the
Commission saying that they supported doing away with the ban
and that's true. In one of the only decisions made by that
Commission that was not unanimous, it was a 5 to 4 vote to take
that position. And it was based on the assumption, by those who
supported it, if you look at the history, Mr. Chairman, based
on the assumption that if you did away with the legal sports
books in Nevada, that you would do away with the point spreads
and the point spreads would no longer be published in
newspapers of the United States. You also have in your packet
from testimony before the Judiciary Committee of this House, a
letter from the American Association--and I'll finish up real
quick--of Newspapers saying look, it's constitutional first
amendment right for us to publish them and they don't come from
Nevada. As Coach admitted, Danny Sheridan who is the leading
analyst in the country and does this points spread for USA
Today lives in Mobile, Alabama, not in Nevada. So the problem
is not in Nevada. We believe and we've got that chart. I'm not
going to go through it now, my time is up, maybe it's a
question, that Nevada's part of the solution, not the problem.
Mr. Stearns. Your time is up.
Mr. Fahrenkopf. Thank you, Mr. Chairman.
[The prepared statement of Frank K. Fahrenkopf, Jr.
follows:]
Prepared Statement of Hon. Frank J. Fahrenkopf, Jr., President and CEO,
American Gaming Association
In recent years, increasing attention has been focused on illegal
gambling, particularly among youth. One of the most common forms of
gambling engaged in by youth is sports betting. According to studies by
the University of Michigan, University of Cincinnati and the University
of Memphis, illegal gambling is flourishing on college campuses
nationwide. The National Collegiate Athletic Association (NCAA) itself
concedes that there are illegal bookies on nearly every college campus
in America.
While we agree that there is a problem, we disagree with the NCAA's
simplistic ``solution.'' The gaming industry is among those supporting
comprehensive legislation that would increase enforcement and
penalties, evaluate the extent and causes of illegal gambling, and
require schools to put in place education programs for their students.
By contrast, the NCAA is advocating a constitutionally questionable
federal ban on legal college sports wagering in Nevada. Despite the
NCAA's unsubstantiated claims, its proposal would do nothing to
eliminate the widespread illegal gambling occurring on college campuses
and elsewhere in this country.
background
In 1992, the U.S. Congress passed the Professional and Amateur
Sports Protection Act (PASPA), which banned sports wagering in all
states except those that already had authorized it. PASPA's primary
goal is to prevent state lotteries from basing games on sporting
contests. As part of a carefully crafted legislative compromise, PASPA
expressly permits Nevada to continue offering state-regulated sports
wagering. According to the Senate Judiciary Committee report on PASPA,
Sen. Rpt. 102-248: ``[The committee] has no wish to apply this new
prohibition retroactively . . . Neither has the committee any desire to
threaten the economy of Nevada, which over many decades has come to
depend on legalized private gambling, including sports gambling, as an
essential industry . . .''
Despite the fact that it is illegal in every state except Nevada,
sports wagering has flourished nationwide. The National Gambling Impact
Study Commission's final report in 1999 estimated that between $80
billion and $380 billion is wagered illegally on sports every year in
this country. According to Danny Sheridan, a sports analyst for USA
Today, up to $10 billion is wagered illegally during March Madness
alone.
The amount of illegal sports betting dwarfs the relatively small
amount bet legally in Nevada, which represents only a tiny fraction--1
percent to 3 percent--of all sports betting. In Nevada's sports books,
only adults over age 21 who are physically present in the state can
wager on sporting events. The typical wager is less than $50.
The genesis of the recent congressional debate over illegal sports
betting stems from the final report of the National Gambling Impact
Study Commission (NGISC), which from 1997 to 1999 studied the effects
of legalized gambling in the United States. The NCAA testified twice on
this subject before the commission--stating under oath that it had ``no
interest'' in seeing a federal ban extended to Nevada. In response to a
request from the NGISC, the organization also outlined its
recommendations to address illegal gambling. In a January 1999 letter
to the commission, NCAA President Cedric Dempsey described a
comprehensive solution, including research and study of college
gambling, education and outreach, legislation prohibiting Internet
gambling, and stricter penalties and enforcement of existing laws. In
contrast to these recommendations, the NCAA now focuses only on a
misguided legislative agenda that implements none of its original
recommendations.
As part of its final report, the NGISC made two unanimous
recommendations to the federal government relating to sports betting.
The commission recommended that 1) the National Institute of Justice or
another appropriate federal agency investigate the extent of adolescent
participation in illegal gambling and all forms of legal gambling; and
2) the NCAA and other educational institutions take steps to reduce
illegal gambling, particularly among young people. Unlike nearly all of
the other recommendations included in the NGISC's final report, the
commission voted by a bare majority to recommend to the states that all
sports betting be made illegal. The commission did so based largely on
the erroneous assumption that ending legal wagering in Nevada would
stop point spreads from being published in newspapers nationwide.
the issue
The NCAA itself has confirmed that there is a serious problem with
illegal betting on college campuses. Instead of focusing attention on
its own college campuses, however, the NCAA has pointed the finger at
Nevada's legal sports books, claiming that the problem of illegal
gambling by minors on campus ``cannot be adequately addressed'' until
sports betting by adults is illegal in Nevada.
That argument is faulty for a number of reasons:
There is no connection between what occurs legally in the state of
Nevada--where sports wagering by adults is regulated, policed and
taxed--and what occurs on college campuses. Students can easily place
bets from their own dorm rooms, using their personal computers to
access the Internet and its thousands of offshore Web sites offering
sports betting. They also have access to illegal student bookies, whom
the NCAA says are on nearly every college campus in America. By
contrast, betting in Nevada sports books is limited to those over age
21 and physically present in the state.
Just because gambling is legal for adults and regulated in Nevada
doesn't mean illegal underage activity elsewhere can't be effectively
addressed. Gambling is one of many activities that are legal only for
adults over age 21. As with the campaign to stop underage drinking, the
gaming industry, educators, the government and others all must work
together to prevent underage gambling. Nobody is seriously suggesting,
for example, that alcohol needs to be banned everywhere in order to
address underage drinking. We tried that simplistic approach with
Prohibition and it did not work.
The isolated point-shaving incidents that did occur in the mid-
1990s originated outside of Nevada with illegal student bookies. For
business and ethical reasons,--Nevada's sports books share the NCAA's
commitment to the integrity of college sports. However, Nevada's sports
books cannot prevent every point-shaving incident from occurring
because they originate outside of the state; it is the responsibility
of the educational institutions, in conjunction with law enforcement,
to address an issue that starts on their campuses among their students.
What the sports books can do--and have done for years--is share betting
information through a direct computer link with the NCAA. The NCAA
publicly acknowledged the value of this and other assistance from legal
sports books during testimony before the NGISC and more recently before
the Nevada legislature. The FBI has publicly credited Nevada's sports
books with spotting the point shaving taking place at Arizona State
University in the mid-1990s.
There are other reasons why a ban on legal college sports betting
in Nevada is not part of the solution to the problem of illegal sports
betting.
A ban on college sports wagering would not end the publication of
point spreads. The NCAA and college coaches argue that a ban on legal
college sports wagering in Nevada would pressure newspapers to stop
publishing point spreads. This is simply not true. Nevada's sports
books are not the initial or the only source of betting lines. In fact,
one of the most popular sources of this information, Danny Sheridan, is
based in Mobile, Ala. Individuals outside of Nevada, including
students, would continue to have access to betting lines from off-shore
Internet Web sites, independent sports analysts, toll-free phone
numbers and newspapers. The Newspaper Association of America told the
House Judiciary Committee that its members would continue to publish
betting lines because it is a First Amendment right of free speech and
because it is a feature enjoyed by readers who, surveys confirm, simply
want to see who is favored in a game, not because they-- intend to
wager on it.
Point-shaving incidents are rare and do not occur because of the
existence of legal sports betting. While one incident is one too many,
only a handful of point-shaving cases occurred out of the more than
90,000 sporting events wagered on during the 1990s. Even the NCAA
acknowledges that these incidents are rare. More players and more teams
were involved in point-shaving incidents in the 1940s and 1950s--well
before modern sports books existed in Nevada. This illustrates the fact
that sports bribery and illegal gambling are societal problems
unrelated to the existence of legal sports books that need to be
addressed through education and enforcement, not prohibition.
Sports betting is a legal recreational activity enjoyed by millions
of Americans who visit Nevada. Honest, hard-working and loyal sports
fans are among the millions of visitors who come to Nevada every year.
Many of them visit during the Super Bowl or March Madness to place
typical bets of $50 or less, adding to the fun and excitement of a
major sporting event. These visitors generate millions of dollars in
nongaming revenue, supporting hundreds of thousands of jobs in the
state. Nothing has changed to alter the judgment of the Congress in
1992 that it would be unwise and inappropriate for the federal
government to ban sports wagering in Nevada and hurt the state's
economy.
A federal ban on Nevada's legal sports books raises serious
constitutional issues. If Congress approves this legislation, it will
establish a dangerous precedent for the federal government to intervene
in state gaming policy decisions. The 10th Amendment to the U.S.
Constitution states that activities that are not specifically spelled
out as responsibilities of the federal government fall within the
purview of the states; gambling is one of those activities that has
always been decided by the states. In fact, recent U.S. Supreme Court
decisions have overturned other federal statutes for encroaching on
states' rights. If Congress were to ban legal sports wagering in Nevada
and the law were-- challenged, the U.S. Supreme Court could overturn
the existing federal sports betting ban passed in 1992, thus opening
the door for other states to approve sports wagering.
aga position
The gaming industry supports practical, comprehensive legislation
that will address the real problem of illegal gambling. The National
Collegiate and Amateur Athletic Protection Act of 2001, introduced Feb.
14, 2001, by U.S. Sens. John Ensign (R-Nev.) and Harry Reid (D-Nev.)
and U.S. Reps. Jim Gibbons (R-Nev.) and Shelley Berkley (D-Nev.), would
create a federal prosecutorial task force, increase criminal penalties,
implement National Institute of Justice and law enforcement studies
into underage betting, and initiate programs to reduce illegal gambling
on college campuses. To date, over 50 members of Congress from both
parties have agreed to co-sponsor this legislation. Nearly every
provision included in S. 338 and H.R. 641 came directly from
recommendations made by the NCAA itself or the National Gambling Impact
Study Commission.
The legislation already has won strong bipartisan support in both
the House and Senate and is the realistic solution to addressing the
problem of illegal gambling. Congressional supporters include U.S. Sen.
Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee; U.S.
Rep. John Conyers, ranking minority member of the House Judiciary
Committee; U.S. Rep. Roy Blunt, chief deputy majority whip; and U.S.
Rep. Martin Frost (D-Texas), chairman of the House Democratic Caucus.
Mr. Stearns. Mr. McMillen, you're a welcome former member.
It's always a delight to have you and we look forward to your
opening statement.
STATEMENT OF TOM McMILLEN
Mr. McMillen. Thank you, Mr. Chairman, and thank you
members of the subcommittee and I thank you for the opportunity
to testify.
On behalf of the Knight Commission on the challenges facing
amateur athletics, I've been working on these issues a long
time and let me say I had dark hair when I started on these
issues, but over the last 10 years I worked as a member with
Congressman Towns and Bill Bradley to help pass the Student
Right to Know bill which has been a very positive effect on
graduation rates disclosure.
I sponsored legislation that was very comprehensive to
restructure the NCAA and deal with some of the anti-trust
issues. I wrote a book when I was in Congress called Out of
Bounds, talked about these problems, provided some
prescriptions for reform. Under President Clinton, I co-chaired
the President's Council on Physical Fitness and Sports and we
worked on the problems of obesity in our children today, a
growing problem, directly related to the fact that we as a
Nation are doing a lot for elite sports in this country, but
we're doing very little for the grass roots in America.
And finally, as a member of the Knight Commission for the
last 10 years we have been grappling with these issues. There's
a copy of our latest report that was issued in June of 2001. It
speaks eloquently to these problems and some of the solutions.
And so what I'm going to do is just briefly summarize a few
points and look forward to your questions.
First of all, progress has been made over the last 10
years. The NCAA has done some good things, particularly in the
area of academic integrity. A lot of it has to do with the
Student Right to Know Bill and some of the measures in that
regard, but there has been progress made. But the fact is that
there are some very serious alarming trends and they have to do
primarily with the commercialization and the influence of money
in our college sports. This has resulted in and the reasons
behind are more television money, coaches making millions of
dollars in salaries.
It's no wonder that players are demanding health care and
basic stipends when coaches are making all this money. You have
bigger stadiums being built. You have schedules that are being
dictated by television, I mean today, it's not uncommon for
players to have to play on Sunday night. That never happened
when I played.
All this as a result of money and what Ced Dempsey said,
the President of the NCAA is that we have an arms war and what
we effectively are doing is having mutually assured
destruction. We are destroying the fabric of our institutions
of higher learning. And the fact is as was pointed out, I
think, by Congressman Bryant, this is now going into our high
schools. We have a major problem in our high schools and as we
embark on a new century we have to think of what we are doing
in this country. We are the only Nation in the world that built
a system where we put school and sports together. And as a
result of that we have a super highway right down our
classrooms in this country. If you want to go to the pros, you
got to go to high school, you got to go to college. And it has
basically distorted our institutions of learning in this
country.
In Germany and other countries of the world, they've kept
their sports and clubs away from their schools because they
understood the tremendous problems and distortions that could
occur and it's exactly what has happened in this country.
We are suffering tremendous damage to our institutions and
it really is a situation where the athletic tail is wagging the
academic dog across the United States. And the problems, as I
said, are being outlined I think very cogently in this report,
but you have to understand in the 1980's, it was remarked by
Congressman Osborne that there wasn't a lot of sanctioning, but
over half of our major institutions in America were either
sanctioned, either censored or put on probation in the 1980's.
The result of that is a loss of philanthropy, bad press,
all the things that happened to our schools when they do not
abide by this complex rule book that the NCAA promulgates. So
we have some very, very serious problems. I would like you to
read the report. I think you'll find it interesting, but I
think the most important part of the report is at the end where
it says, if it becomes impossible for us to maintain a balance
between academics and athletics in this country, colleges and
universities should get out of the business. And I think that's
the most important part of what the Knight Commission reported.
I will say this, personally, I am not an optimist. I think
we have a very serious problem. I think these problems are
going to continue to accelerate. I do not believe that self-
reform can work. I do not believe the NCAA can solve the issues
of coaches' salaries and players demands and the proper revenue
distribution models that are needed to promote the things that
are important for academics, Title IX, all the things involving
academic values. I do not believe that the NCAA alone can do so
and I think it's going to require the Congress to step in.
Thank you, Mr. Chairman.
[The Knight Foundation report is available at www.knight
fdn.org]
Mr. Stearns. Thank you.
Mr. Huma. We welcome your opening statement.
STATEMENT OF RAMOGI D. HUMA
Mr. Huma. Thank you. Chairman Stearns, Ranking Member Towns
and members of this committee, I would like to thank you for
inviting me to speak with you today. My name is Ramogi Huma and
I'm the founder of the Collegiate Athletes Coalition, a group
started by UCLA football players that seek to establish an
effective means for student athletes to voice their concerns
and influence NCAA legislation.
I started this group while playing football for the UCLA
Bruins and today Division I football and basketball players
from 10 different universities are members of this group.
I'm here today to provide you with the student athletes'
perspective about the relationship between commercialization
and student athletes in NCAA sports. In order to be made
possible by commercialization, Division I football and
basketball players generate billions of dollars each year in
NCAA sports. However, not enough resources are directed to
ensure student athletes have basic protections. These student
athletes are very grateful for their scholarships and for their
opportunity to earn a degree, however, it should be stated that
this opportunity is earned and nothing is free for these young
men and women. As a condition of their scholarships, these
students put themselves through school with their own sweat and
blood. They partake in year-round strength and conditioning
workouts, countless hours per week of mandatory and voluntary
participation in the sport. Many sustain injuries and surgeries
throughout their careers and all risk permanent physical
disability and death.
Hard work and high risk are necessary to successfully
compete in games. These games draw huge crowds that in turn
draw high levels of commercialization. In NCAA, Division I
football and basketball players generate an estimated $3.5
billion each year.
Commercialization is deeply rooted in Division I sports
today and the degree to which affiliated organizations and
employees benefit is seemingly without limits. Somewhere in
this mix are the student athletes whose talents capture this
revenue.
I would like to make it clear that student athletes are not
necessarily opposed to others benefiting from their talents,
however, the NCAA makes it possible for all to capitalize off
the talents of student athletes while imposing restrictions on
student athletes that leave them and their families at
financial and physical risk.
Given the atmosphere of commercialization in NCAA sports in
which everyone benefits off the talents of student athletes to
the absolute fullest, student athletes across the Nation feel
that a little more of the resources generated should be
directed to secure basic protections for student athletes.
There are a number of NCAA rules that leave student
athletes financially and physically vulnerable. One example is
the NCAA's capital in the amount of aid a university may give a
student athlete. The NCAA formulated full grant and aid
scholarship set at a dollar amount that is below the cost of
attendance of each university. Being full-time students and
full-time athletes year round leaves little time and energy to
hold a job. However, many student athletes feel like they have
no choice but to work in order to make up the difference
between their scholarships and actual cost of attendance. These
student athletes soon find that the NCAA actively restricts
them from seeking many opportunities for employment, while
capping the amount they can earn through part-time work in
academic off-season at $2,000.
I urge this committee to consider the financial and time
management difficulties that this situation fosters when
investigating the graduation rates of student athletes.
The absence of protections for student athletes peaks in
the summer during so-called voluntary workouts. These workouts
are designed and facilitated by athletic programs and take
place on university facilities. Although they are labeled
voluntary, the truth is that there is tremendous pressure on
student athletes to attend these summer workouts. These
workouts are effectively mandatory. NCAA rules prohibit schools
from paying for the medical expenses of student athletes who
are injured during these workouts. Also, if a student athlete
dies during or as a result of a summer workout, the NCAA may
not extend its $10,000 death benefit to the grieving families.
In addition, the NCAA does not enforce critical safety
guidelines to help prevent workout related deaths. During the
2001 off-season, three college football players died as a
result of their workouts. Devaughn Darling from Florida State
University, Eraste Austin from the University of Florida and
Rashidi Wheeler from Northwestern University, all died in their
pursuit of higher education an din the name of NCAA sports. Two
of the three grieving families did not receive the NCAA's death
benefit because they happen to die during summer workouts. In
addition, a disturbing question surfaced or whether or not each
of these deaths could have been prevented. After investigating
these tragedies we found that the NCAA does not play a role in
making sure institutions provide safe environments for their
student athletes to work out.
The NCAA has recently canceled a meeting with the
Collegiate Athletes Coalition claiming that it did not know
about our affiliation with the United Steelworkers of America.
It is our position that there is no legitimate excuse for the
NCAA to ignore these important issues. At our request, this
meeting was to focus solely on preventing workout related
deaths and extended eligibility for health covered for work-
related injuries and the NCAA's death benefit.
If this committee can initiate the process of securing
basic protections for student athletes who participate in NCAA
sports, today's student athletes and generations of student
athletes to come will be forever grateful.
Once such protections are secured, student athletes will
have a more equitable place in the highly commercialized
atmosphere of Division I sports. And if I could just actually
make a connection, there is a student athlete perspective here
in terms of gambling and sports agents. We feel that student
athletes would have less of a propensity to be sucked into
gambling and sports agents if they were given enough to make
ends meet.
[The prepared statement of Ramogi D. Huma follows:]
Prepared Statement of Ramogi D. Huma, Chairman of the Collegiate
Athletes Coalition \1\
---------------------------------------------------------------------------
\1\ The Collegiate Athletes Coalition (CAC) is a student group
started by UCLA football players. Its purpose is to establish an
effective means to voice the concerns of student-athletes and influence
NCAA legislation. To date, football and basketball players from UCLA,
the University of Southern California, Stanford University, the
University of Washington, Arizona University, Arizona State University,
the University of Oregon, Boise State University, the University of
Hawaii, and Saint Louis University have joined the CAC. These student-
athletes have come together to pursue basic protections for student-
athletes from all sports.
---------------------------------------------------------------------------
introduction
Largely made possible by commercialization, Division I football and
basketball players generate approximately $3.5 billion dollars each
year in NCAA sports. However, not enough of these resources are
directed to provide student-athletes basic protections.
In looking back to 1905, extremely violent techniques in football
like the flying wedge critically injured and killed a number of college
football players. At the request of President Theodore Roosevelt, the
NCAA was commissioned in 1906 to reform college football to reduce the
number of injuries and deaths. In short, the NCAA was founded for the
sole purpose of addressing the very heart of student-athlete welfare.
In more recent years, the NCAA has proven to be a powerful force in
enforcing regulations on its member institutions. It goes to great
lengths to ensure that schools and student-athletes comply with
numerous rules regarding issues such as recruiting and money. It is now
time for the NCAA to make the same commitment to protecting its
student-athletes.
If this committee can initiate the process of securing basic
protections for student-athletes who participate in NCAA sports,
today's student-athletes and generations of student-athletes to come
will be forever grateful. Once such protections are secured, student-
athletes will have a more equitable place in the highly commercialized
atmosphere of Division I sports.
should student-athletes complain?
Many of today's student-athletes who receive financial aid have a
great opportunity to earn a degree from an institution of higher
education while competing in a sport that they enjoy. Many refer to
this arrangement as a ``free ride'' through college. These athletes are
very grateful for their scholarships and for their opportunity to earn
a degree. However, it should be stated that this opportunity is
earned--nothing is free for these young men and women. As a condition
of their scholarships, these students put themselves through school
with their own sweat and blood. They partake in year-round strength and
conditioning workouts, countless hours per week of mandatory and
voluntary participation in a sport, many sustain injuries and surgeries
throughout their careers, and all risk permanent physical disability
and death. Division I football and basketball players generate a ton a
money for the NCAA and their institutions all the while. The
opportunities afforded to these student-athletes are definitely earned.
Nothing is free. Hard work and high risks are necessary to successfully
compete in games.
commercialization and beneficiaries
It is the games student-athletes participate in that draw huge
crowds that, in turn, draw high levels of commercialization. In NCAA
sports, Division I football and basketball players generate an
estimated $3.5 billion each year. This revenue is generated primarily
from commercialization. Many are familiar with the $6 billion that CBS
is going to give the NCAA for the rights to broadcast the Division I
basketball play-offs and championship games alone. In turn, CBS will
turn a healthy profit by selling commercial slots to companies who want
to show their product to the millions of people who watch these
student-athletes play. These companies will reap great rewards because
of the exposure that their products receive during these games.
Commercialization is deeply rooted in Division I sports today; and the
degree to which organizations and employees associated with this
commercialization benefit is seemingly without limits.
commercialization, the ncaa, and student-athletes
Somewhere in the midst of these billions of dollars are the
student-athletes whose talents capture this revenue and NCAA rules that
leave them without many basic protections. It should be made clear that
student-athletes do not necessarily oppose others benefiting from their
talents. However, while making it possible for all to capitalize off
the talents of student-athletes, the NCAA imposes restrictions on
student-athletes that leave student-athletes and their families at
financial and physical risk.
student-athletes below the poverty line
Below the poverty line is where you will find many student-athletes
living across the nation. Take a look at how a full scholarship athlete
at UCLA functions financially:
A student-athlete living off-campus is given a monthly stipend during
the school year that is supposed to cover housing and food. This
athlete receives $873 monthly stipend from October to June.
Total: $7857
Poverty line: $8,590
(U.S. Department of Health and Human Services figure for a single
person household in the year 2000 http://aspe.hhs.gov/poverty/
01poverty.htm)
Each institution sets a budget for its students otherwise known as
the cost of attendance. The cost of attendance is a dollar amount that
each school deems necessary for any student to survive.
The NCAA full grant in aid is set at a dollar amount that is below
the cost of attendance. A full grant in aid scholarship as determined
by the NCAA is set at an amount equal to fees and tuition, books, and
room and board at each university. Universities, however, recognize
other expenses and factor them into the budget.
Total Athletic Scholarship at UCLA: $12,156 ; UCLA Cost of
Attendance: $16,020
At UCLA, transportation and personal expenses are included in the
total cost of attendance. At UCLA, the NCAA's formula leaves student-
athletes about $3864 short of what it actually costs to live as an
undergraduate student at UCLA.
This situation is not unique to student-athletes at UCLA. Student-
athletes across the nation face similar circumstances.
On-campus . . .
NCAA rules prohibit many institutions from giving student-athletes
any cash while they are living in the residence halls. At UCLA, this
means that players must find a way to deal with almost $3900 per year
in additional living expenses having absolutely no cash to begin with.
Employment restrictions enforced by the NCAA make this difference
impossible to make up through part-time work.
UCLA's student-athletes do not face these financial hardships
alone. Athletes across the nation face similar predicaments.
ncaa caps earnings and restricts employment opportunities
Being full-time students and full-time athletes year-round leaves
little time and energy to hold a job. However, many student-athletes
feel like they have no choice but to work in order to make up the
difference between their scholarships and the actual cost of
attendance. These student-athletes soon find that the NCAA actively
restricts them from seeking many opportunities for employment while
capping the amount they can earn through part-time work in the academic
off-season at $2000. At UCLA, this cap prevents student-athletes from
making up this difference. These student-athletes are faced with either
trying to live on almost $2000 less than what it actually costs to live
or breaking NCAA rules and putting their scholarships in jeopardy. In
addition, the NCAA restricts student-athletes from securing many types
of employment. In general, student-athletes may not hold jobs that are
related to their athletic talent.
This committee should consider the financial and time management
difficulties that these restrictions foster when investigating the
graduation rates of student-athletes.
safety, injuries, death, and so-called ``voluntary workouts''
The absence of protections for student-athletes peaks in the summer
during so-called ``voluntary'' workouts. These workouts are designed
and facilitated by athletic programs. The workouts are usually
conducted by coaches and take place on university facilities. Although
they are labeled ``voluntary'', the truth is that there is tremendous
pressure on student-athletes to attend these summer workouts. These
workouts are effectively mandatory.
NCAA rules prohibit schools from paying for the medical expenses of
student-athletes who are injured during these workouts. Also, if a
student-athlete dies during or as a result of a summer workout, the
NCAA may not extend its $10,000 death benefit to the grieving families.
In addition, the NCAA does not enforce critical safety guidelines to
help prevent workout-related deaths. During the 2001 off-season, three
college football players died as a result of their workouts. Devaughn
Darling from Florida State University, Eraste Autin from the University
of Florida, and Rashidi Wheeler from Northwestern University all died
in their pursuit of higher education and in the name of NCAA sports.
Two of the three grieving families did not receive the NCAA's death
benefit because they happened to die during summer workouts. In
addition, disturbing questions surfaced over whether or not each of
these deaths could have been prevented. After investigating these
tragedies, the CAC found that the NCAA does not play a role in making
sure institutions provide safe environments for their student-athletes
to workout.
reform
The CAC is urging the NCAA to provide basic protections for its
student-athletes by taking the following actions:
Increase full grant in aid scholarships to an amount that is
equal to the cost of attendance at each school
Eliminate employment restrictions
Allow institutions to pay for medical expenses associated with
sports-related injuries for so-called ``voluntary'' workouts
Allow families access to the NCAA death benefit if their child
is either a current or prospective student-athlete who dies as
a result of a university-facilitated workout
Identify and enforce critical safety guidelines to prevent
workout-related deaths
the ncaa has demonstrated little willingness to make changes
The NCAA has recently cancelled a meeting with the CAC. At the
CAC's request, this meeting was to focus solely on preventing workout-
related deaths and extended eligibility for health coverage for
workout-related injuries and the NCAA's death benefit.
Hundreds of thousands of student-athletes will benefit if
improvements are made in these areas. Unfortunately, it is too late to
help Devaughn Darling, Eraste Autin, and Rashidi Wheeler. But much can
be done to help the student-athletes that remain vulnerable.
summary: a role for this subcommittee in reforming the ncaa
Although student-athletes have generated tremendous amounts of
revenues in NCAA sports for some time, the NCAA continues to leave
these young men and women without basic protections. The NCAA is quick
to admit many of these shortcomings and frequently states that
necessary changes are coming. However, generations of student-athletes
have come and gone with the NCAA remaining static. Promises of change
are no longer enough. The NCAA has been in existence for almost a
century and hardworking student-athletes still lack fundamental
protections. Student-athletes feel that NCAA reform should begin
immediately. If this subcommittee can help initiate this process, it
has the full support of student-athletes across the nation.
Mr. Stearns. I thank the gentleman.
Mr. Aguirre, I'm sorry, I didn't see your name tag.
STATEMENT OF MICHAEL AGUIRRE
Mr. Aguirre. Thank you, Mr. Chairman, members of the
subcommittee. On behalf of the National Collegiate Athletic
Association's Division 1, Student Athlete Advisory Committee,
I'm pleased to have the opportunity to provide the subcommittee
with information about the group I represent and how the voice
of the student athlete is heard in the governance of
intercollegiate athletics.
I also hope to provide you with some sense of the issues
that are important to student athletes today.
I'm one of 31 members of the committee, each of us
representing athletic conferences within the NCAA membership. I
represent the Pac-10 Conference. The structure of the National
Division 1 Student Athletic Advisory Committee mirrors the
governance structure of the NCAA Division 1 itself. Each
athletics conference appoints representatives to serve on the
various entities within the governance structure. As co-chair
of the Division 1 SAAC, I'm one of two student athletes who sit
on the Division 1 Management Council which debates and votes on
NCAA by-laws. Student athletes also serve and vote on many
committees and cabinets within the Division 1 governance where
most by-law proposals originate.
It is my honor and privilege to represent more than 120,000
men and women participating in college sports at the Division 1
collegiate level. My colleagues in Division II and III--nearly
80 of us all together--represent more than 360,000 student
athletes who compete annually in 22 sports.
As you can imagine, I take my role as their voice very
seriously.
The first NCAA Student Advisory Committee was created in
1989. It represented all three divisions of student athletes.
Today, NCAA by-laws mandate a student athlete advisory
committee on each campus and in each athletics conference. Many
are extraordinarily effective in debating NCAA by-law proposals
at the local level and providing feedback to us on the national
SAC. It is a point of pride for me to know that when I speak on
behalf of student athletes in the PAC-10 Conference, I
represent the majority opinion.
There's an old saying in politics that there are two things
you never want to watch being made, sausage and laws. The
process of governing and regulating is often one of tedium and
compromise. ``We're doing the right thing'' can be overwhelmed
by self-interest, and ``we're doing no harm'' sometimes take
precedent over doing good.
So it is with the governance of inter-collegiate athletics.
Those have been important lessons for the 80 or so student
athletes on the three SACs. We've had to learn patience with
the process that tries to be fair to all sports, those that
generate revenue and those that don't, on campuses large and
small, public and private, urban and rural, religious and
secular. We've learned the art of compromise and the importance
of small victories over no victories.
For more than a decade now, the NCAA student athletic
advisory committees have played an important and necessary role
in the governance of college sports. We have helped mandate the
creation of campus and conference SACs, assured the student
athletes on full scholarship can work during the school year,
help define recruiting practices that are less intrusive on
prospects, engage in discussion on financial aid by-laws, stop
legislation that would have increased time demands on student
athletes, help define the difference between voluntary and
mandatory practices and help write by-law proposals that permit
Division 1 student athletes to accept Olympic prize money.
My predecessors and current colleagues on the committee
have done all this within a system that works hard at balancing
the myriad of factors that make up intercollegiate athletics.
I'm extraordinarily proud of the work we've done.
There are a number of issues important to student athletes
that I hear from in the Pac-10 and across the country. We are
concerned about time demands on students. Our coaches place
increasing demands on our physical ability and we put
additional demands on ourselves to be the best we can be. We
have a 20-hour rule that is supposed to protect us from
demanding coaches and from ourselves. The problem and solution
will probably have to come at the campus level. We are
concerned about insurance coverage. In April, we're going to
get our first report on a feasibility study that the NCAA
national office is doing to provide 24 hour, 7 days a week
coverage for all student athletes. I'm anxious to see that
report and help shepherd a significant new insurance coverage
policy through the governance structure.
We are concerned about the increased instances of death
during off-season workouts. A committee of medical and sports
science experts has turned its attention to this issue and the
possible effects of dietary supplements increasingly used by
athletes in a regimen that otherwise has changed little over
the last several years. We are concerned about stories of
student athletes who can't make ends meet financially. At the
same time, I recognize that student athletes and especially
football and basketball student athletes on full grants and aid
are considerably better off than many students on campus. I am
pleased that some within the NCAA Board of Directors are
pushing for an increase in the grant and aid from full cost of
education to full cost of attendance. The Division I governance
structure is also exploring ways to permit other forms of
financial aid without impacting team limits on allowable aid.
The good news is that the NCAA student athletic advisory
committees are in a position to do something about these and
other issues. We're part of the structure that sets national
policy as fairly and equitably as possible. We deal with the
facts as they are and the outcomes as we would like them to be.
Our voices are loud and clear, even if our work is performed
without much fanfare. Over the last 6 years, I've been a
student, a student athlete and a student athlete voice. These
are experiences I would not trade for anything. They've helped
me live my dream. They've helped me understand that I can make
a difference.
Thank you again for your time this morning.
[The prepared statement of Michael Aguirre follows:]
Prepared Statement of Michael Aguirre, Co-Chair, NCAA Division I
Student-Athlete Advisory Committee
On behalf of the National Collegiate Athletic Association's (NCAA)
Division I Student-Athlete Advisory Committee (SAAC), I am pleased to
have the opportunity to provide the subcommittee with information about
the group I represent and how the voice of the student-athlete is heard
in the governance of intercollegiate athletics. I hope also to provide
you with some sense of the issues that are important to student-
athletes today.
committee structure
I am now a former football student-athlete at Arizona State
University, and because I continue there as a graduate student, I
continue to serve on the Division I SAAC. I am one of 31 members of the
committee, each of us representing athletics conferences within the
NCAA membership. I represent the Pacific-10 Conference, a conference
which includes the University of Southern California, Stanford
University, and The University of Washington, among others. In addition
to the national Division I SAAC, there is a SAAC structure at the
campus and conference levels as well. I have served on the campus SAAC
at Arizona State and helped create the Pacific-10 Conference committee.
The structure of the national Division I Student-Athlete Advisory
Committee mirrors the governance structure of NCAA Division I itself.
Each athletics conference within Division I appoints representatives to
serve on the various entities within the governance structure. As co-
chair of the Division I SAAC, I am one of two student-athletes who sit
on the Division I Management Council, which is the body of faculty and
athletics administrators who debate and vote on NCAA bylaws before
passing them on to the presidential-led Board of Directors. Student-
athletes also serve and vote on many committees and cabinets within the
Division I governance where most bylaw proposals originate.
If this sounds complicated, I assure you it is no more so than the
governance structure of the United States; and just as the Congress,
the Senate and the presidency legislate for the nation, the process for
regulating intercollegiate athletics is a democratic one. It is my
honor and privilege to represent more than 120,000 men and women
participating in college sports at the Division I collegiate level. My
colleagues in Divisions II and III--nearly 80 of us all together--
represent more than 360,000 student-athletes who compete annually in 22
sports. As you can imagine, I take my role as their voice seriously.
committee history
The first NCAA Student-Athlete Advisory Committee was created in
1989. It represented all three divisions of student-athletes; met twice
annually; attended the annual NCAA Convention where national policy was
debated and voted; and like most fledgling groups, it was more
experiment than effective representation. It wasn't long, however,
until the student-athletes made their voices heard. In 1997, three
committees were created at the national level to better serve the
thousands of student-athletes who compete in each division.
Today, NCAA bylaws mandate a student-athlete advisory committee on
each campus and in each athletics conference. Like any other quasi-
governance group of individuals, the effectiveness of these committees
varies from campus to campus and conference to conference. Most are
extraordinarily effective in debating NCAA bylaw proposals at the local
level and providing feedback to us on the national SAAC. In fact, as
with you and your constituents, we hear often and with great passion on
issues important to our constituents -- student-athletes. It is a point
of pride for me to know that when I speak on behalf of student-athletes
in the Pac-10 conference, I represent the majority opinion.
committee effectiveness
There is an old saying in politics that there are two things you
never want to watch being made: sausage and laws. The process of
governing and regulating is often one of tedium and compromise where
doing the right thing can be overwhelmed by self-interest and where
doing no harm sometimes take precedent over doing good. So it is with
the governance of intercollegiate athletics. The NCAA is a private,
not-for-profit association of 977 institutions of higher education and
more than 100 athletics conferences. The diversity of the members, and
therefore the need for common policy, is both the reason the
Association exists and its greatest challenge.
Those have been important lessons for the 80 or so student-athletes
on the three SAACs. We have had to learn patience with a process that
tries to be fair to all sports, those that generate revenue and those
than don't, on campuses large and small, public and private, urban and
rural, religious and secular. We have learned that the student-athletes
who participate on those campuses are just as diverse and deserve the
same balance of fairness NCAA governance tries to bring to programs. We
have learned the art of compromise and the importance of small
victories over no victories.
For more than a decade now, the NCAA Student-Athlete Advisory
Committees have played an important and necessary role in the
governance of college sports. Much is often made of the fact that we
don't have a vote at the Management Council level. The reason is
political. Our votes would create an imbalance in a voting structure
that is representative of conference affiliation. It would be good to
have a vote. Who in a democracy would not want one? But, frankly, I
sometimes fear that in getting a vote, we might lose the power our
voice has today. With a vote, ours would be only one of many. Today,
our voice is powerful precisely because we don't have a vote. And I am
convinced that our effectiveness has been diminished not one whit by
not being able to say ``yea'' or ``nay.'''
Over the last decade, the Division I Student-Athlete Advisory
Committee has helped mandate the creation of campus and conference
SAACs, assured that student-athletes on full scholarship could work
during the school year, helped define recruiting practices that are
less intrusive on prospects, engaged in discussion on financial aid
bylaws, stopped legislation that would have increased demands on
student-athlete time, helped define the difference between voluntary
and mandatory practices, and helped write bylaw proposals that permit
Division I student-athletes to accept Olympic prize money. My
predecessors and current colleagues on the committee have done all this
within a system that works hard at balancing the myriad of factors that
make up intercollegiate athletics. I am extraordinarily proud of the
work we have done.
student-athlete issues
There are a number of issues important to the student-athletes I
hear from in the Pac-10 and across the country. We are concerned about
the time demands on student-athletes. At Division I, the expectations
for practice, weights, conditioning, and competition are high. We are
competing against the best, and we have to be among the best. Our
coaches place increasing demands on our physical ability and we put
additional demands on ourselves to be the best we can be. We have a 20-
hour rule that is supposed to protect us from demanding coaches and
from ourselves. The problem--and solution--probably will have to come
at the campus level.
We are concerned about insurance coverage. In April, we're going to
get our first report on a feasibility study the NCAA national office is
doing to provide 24-hour, seven-days-a-week coverage for all student-
athletes. I'm anxious to see that report and help shepherd a
significant new insurance coverage policy through the governance
structure.
We are concerned about the increased instances of death during off-
season workouts. A committee of medical and sports science experts has
turned its attention to this issue and the possible effect of dietary
supplements increasingly used by athletics in a regimen that otherwise
has changed little over the last several years.
We are concerned about stories of student-athletes who can't make
ends meet financially. At the same time, I recognize that student-
athletes--and especially football and basketball student-athletes on
full grants-in-aid--are considerably better off than most students on
campus who do not get tuition and fees, room and board, and course-
related books paid for. There is no question that intercollegiate
athletics has made colleges and universities available to hundreds of
men and women who otherwise would not be able to attend. I am pleased
that some within the NCAA Board of Directors are pushing for an
increase in the grant-in-aid from full cost of education to full cost
of attendance. The Division I governance structure is also exploring
ways to permit other forms of financial aid without impacting team
limits on allowable aid.
The good news is that the NCAA Student-Athlete Advisory Committees
are in a position to do something about these and other issues. We're
part of the structure that receives a wealth of research data;
considers issues that affect local, regional and national practices;
hears the input from student-athletes across sports ranging from
football and basketball to field hockey and rowing; and finally sets
national policy as fairly and equitably as possible. We deal with the
facts as they are and outcomes as we would like them to be. We are
idealistic with our hopes and pragmatic with our solutions. Our voices
are loud and clear even if our work is performed without much fanfare.
Over the last six years, I've been a student, a student-athlete and
a student-athlete voice. These are experiences I wouldn't trade for
anything. They have helped me live my dream. They have helped me
understand that I can make a difference.
Mr. Stearns. I thank the gentleman.
Here we are on Wednesday a little after noon and just
listening to all of you sort of highlights the whole idea of
our hearing about the challenges facing amateur athletics. And
it's a little overwhelming. Mr. McMillen has poignantly
indicated a destroying of the fabric of our education by what's
happening here and I think we could probably have many more
hearings on this and obviously there would be a lot of
proactive Members of Congress who'd like to offer legislation.
But the seriousness of what some of the points have been made
have not gone unheeded here and I think whether it's from
gambling or whether it's from dealing with athletes that are
not graduating and given the promise and families kiss them
goodbye at the door as they leave high school and they go off
to these colleges and then they not only don't graduate, but
they don't get the service or attention and in some of them are
put in precarious situations in training practice and things
like this. So there are a host of challenges facing amateur
athletics. And we had the difficult decision when we had this
hearing as to how to bring about the more things that Mr. Huma
talked about and Mr. Aguirre has talked about versus Mr.
Fahrenkopf and Mr. Saum because of the gambling and what impact
that has. Coach Osborne pointed out that he felt it had
extremely strong effect and Mr. Fahrenkopf does not agree.
NCAA, under Shelley Berkley, the Congress Lady from Las Vegas,
has a very strong opinion against the NCAA. And I was not quite
aware of the strong feelings that you various groups have on
these issues and I can see that it would take a great deal of
hard consensus to come together with something legislative
where we're going to solve that. But not withstanding that
challenge, I appreciate all of you bringing this to our
attention and I appreciate Mr. Towns who has made a great
effort to have this hearing to follow up on his legislation
with Mr. McMillen.
Mr. Saum, the question I have for you, Mr. Towns indicated
that Las Vegas is not the only one. If I understand from the
legislation of past Congress, Nevada is the only State that's
been grandfathered in that has this legalized gambling. The
other States, be that as it may, do not do it. Is that correct?
Can you just verify that for us, because we want to know if
Nevada is the only State in the Union that has legalized
gambling?
Mr. Saum. That is correct, yes sir.
Mr. Stearns. Do other States, could they do it if they
wanted?
Mr. Saum. The other States have chosen not to.
Mr. Stearns. Okay, so that still goes back to Congressman
Osborne's point is why have one State have it and not the
others.
Listening to this objectively, it appears to me that there
does not necessarily seem that because one State has it, it's
been that detrimental. Coach Osborne's point is well taken. Why
give somebody a grandfather, when not everybody else has it.
Why are 49 States not doing it and Nevada doing it? Mr.
Fahrenkopf has made an eloquent point that actually instead of
hurting, it's helped in bringing the problems to the forefront.
But do you agree with him? What would you disagree in what
he said in terms of your role with the NCAA?
Mr. Saum. Mr. Chairman and members of the committee, we----
Mr. Stearns. Because you're agreeing with Coach Osborne,
aren't you?
Mr. Saum. Certainly, certainly.
Mr. Stearns. You agree completely.
Mr. Saum. We are opposed to legal sports wagering. We
believe----
Mr. Stearns. Period.
Mr. Saum. Period, yes. Our message is fairly simple and
fairly clear. The reason is for a number of reasons. We believe
it's inappropriate to bet on young people. We believe it is
inappropriate to wager on college athletics. We want
individuals, fans, we want people to go to the games to enjoy
the spontaneous action and reaction of the game, the behavior
of the officials, the behavior of the athletes, the coaching
strategies and not worry about whether you win by 10, 11 or 12.
Mr. Stearns. But Ms. Berkley made the comment that you're
not policing as well as you should. How do you react to what
she said?
Mr. Saum. Well, I'd like to first make sure that the facts
are correct. I run a staff of 7 people, not 1. I run--my staff
has a budget of $450,000. We then educate the institutions
across the United States so we have Ambassadors, we have a
grass roots effort. We teach all of our compliance folks about
gambling.
I was just at a meeting yesterday with 30 Assistant
Commissioners from every conference in America and we talked
about sports wagering. My assistant is at Florida State
University today where they have the--the president of the
institution created a committee of high administrators.
Mr. Stearns. Congress Lady, the gentle lady from Las Vegas
made a lot of charges against you in her opening statement and
she was quite strong about her feelings and so to get this
proper, you'd have to take this hearing when it's all over and
sit in a room and read that hearing and take each of your
testimony and think about it and reflect and Mr. Towns and I
and work with our colleagues to do something.
Mr. McMillen, I mean you--if you were a Member of Congress
again, you served with distinction and if you were me, what
kind of bill would you drop to help solve the challenges facing
amateur athletics? You have the unique perspective being a
former Member of Congress and also serving in the professional
sports. I mean you've probably, just like Mr. Osborne, have the
unique perspective. So you've heard also the testimony earlier
about gambling. What kind of legislation would you do?
Mr. McMillen. Well, I'm going to speak personally and not
as a representative of the Knight Commission. I introduced
legislation in 1991 in response to what ``Whizzer'' White, the
Supreme Court Justice ``Whizzer'' White reacted in his minority
dissent in 1984 when the Supreme Court overturned really the
monopolization of the NCAA's television monies and we've seen a
fractionization of television so you've got the SEC conference
and all this. Even with all the money that the NCAA, it isn't
in control of it. There are so many other conferences, schools,
Notre Dame can go sign their own contract. So what ``Whizzer''
White said was there'd be an arms war and that's exactly what
we've seen. And so what I did, in my bill, I proposed over
giving an antitrust exemption, putting an all powerful NCAA
back in place, putting it tightly in control by the presidents
and then having a revenue distribution formula that spreads the
money around for gender equity, for academic values, for the
diversity and breadth of your programs on campuses, not for
winning and losing.
And in that same legislation you can bring about a
reduction in coaches' salaries to be in line with prevailing
norms on college campuses and you end up putting this whole
thing back into the model of academics. The money will not be
less, in fact, it will probably be more. The kids will play
just as hard. The entertainment value won't go away. And you'll
end up in a model that will be more in line with the values of
higher education. I never thought it had a chance at all to
pass. I still believe that this institution is going to have to
step in some day and deal with these intractable issues.
Realize that if you win a game in the NCAA post tournament, you
get another three quarters of a million dollars. Those are the
wrong values. The values should be about college values, not
commercial values. And so that was my answer. I proposed it 11
years ago. I still think that some day it will be brought out
of the dust shed and you'll look at it and say you know,
``Whizzer'' White was probably right in 1984 when he said this
was going to happen and he predicted it back then.
Mr. Stearns. My time has expired. I obviously will give
everybody an opportunity to comment on either some of my
questions or others.
Mr. Towns?
Mr. Towns. Thank you very much, Mr. Chairman. Let me begin
with you, Mr. Aguirre. First of all, how did you get your
position? Were you elected or were you appointed or by a
committee or did you appoint yourself?
Mr. Aguirre. Basically, I became involved with the student
advisory committee on the campus at Arizona State University
and was selected by the administrators at Arizona State
University and by our student athletic committee to represent
ASU at the Pacific Tank Conference, a body of that same
organization. Once I was at that level, there is also the
structure of the NCAA, Division 1 SAC which has one
representative from each conference and when that position was
open for the Pac-10 representative, my name was forwarded by
the Pac-10 with a number of other people and I was selected at
that time.
Mr. Towns. The name was forwarded by?
Mr. Aguirre. I was forwarded by officials from the PAC-10
to the body that selects committee members for the NCAA and my
name was chosen and forwarded at that time.
It's a selection process through your involvement in the
student athlete advisory committees at the various levels that
have been instituted.
Mr. Towns. So then the NCAA made the final selection?
Mr. Aguirre. I believe so.
Mr. Towns. The reason I raise the question is that see if
you were selected by the NCAA, you know I'm not sure as to how
big an advocate you can be, because after all, they put you
there.
Mr. Aguirre. They did put me there and with all due respect
I believe that student athletes will represent student athletes
to the best of their ability. I have been in the same shoes as
every student athlete, not literally, but I have had those same
experiences, shared the same sweat and blood on the field as
all student athletes and when I put on my hat as student
athlete representative from the Pac-10 conference, I'm going
into that with the full knowledge that I'm representing all
student athletes and I'm looking out for their best interests.
So although while I was put into this process by the NCAA, I
don't ever forget that I'm a student athlete first and
representing their view and welfare on that committee.
Mr. Towns. Thank you very much. Let me just move to you,
Tom, good to see you.
Mr. McMillen. Good to see you.
Mr. Towns. I'm happy to know there's life after this place.
You indicated that you do not believe that the NCAA can reform
itself. Why do you believe that?
Mr. McMillen. Because there are intractable issues. It's
about the have and have not. If you have a lot of money, I mean
as Coach, Congressman Osborne said, there's 40 schools that
have big time programs. There's a whole slew that don't. It's a
game to keep up with the Joneses. And it's failing. Schools are
losing money. So I don't think you can come to a revenue
distribution formula that promotes academic values. Point No.
1.
Point No. 2 is that the players have a right to demand
recompense when the coaches are making, there's 30 or 40
coaches making millions of dollars of salary. I mean it's just
logical. So how do you stop all these trends? You've got to put
it back, you've got to put the genie back into the educational
bottle and that's why I don't think the NCAA--and they've done
a lot of good things. I'm not here to bash on the NCAA. They've
done a lot of good things. I just think that in the long run,
it's going to be difficult for them to self-reform these big
issues. Just impossible to do.
Mr. Towns. Now I hear from time to time that people say
that well, Congress should stay out of it. They should not get
involved in it at all. They have no business being involved in
athletics. This is NCAA's business and what do they have to do
with it?
Mr. McMillen. Because Congress is very involved in our
secondary education and our higher education in this country.
Look at the amount of money we are spending as a Nation and yet
in many respects have a tail wagging the dog. I think it's a
very important issue because we are compromising our
institutions of learning in this country. I am all for sports.
I'm all for college sports. I think the Maryland and Dukes of
the world will play just as hard regardless of whether they're
getting more money for winning than they do right now. The
systems, the incentives are skewed wrong and I don't think the
product of college sports would suffer if it was materially
changed.
Mr. Towns. Thank you very much. Let me raise this question
with you, Mr. Huma. Has there been any kind of interference by
the NCAA or anybody in reference to your organization moving
forward?
Mr. Huma. Well, not to my knowledge. I don't think the NCAA
has actively tried to oppose what we're doing. I think that
sometimes administrators on the campus level, from what I've
heard, some of them get in the ears of some of the players who
are members of our organization, so I have heard a few
comments, but not from the NCAA. I haven't heard anything from
the NCAA, about the NCAA trying to block this.
Mr. Towns. So it's actually the administrative staff of
some universities that have actually interfered with you being
able to move forward.
Mr. Huma. Right, just a few. By and large, we haven't faced
any interference.
Mr. Towns. Mr. Saum, why do you feel that we should not be
involved, Congress? As was pointed out, we invest a tremendous
amount of money in these colleges and universities. Why should
we not have some kind of say, especially when we know the
situation is broken and it should be fixed?
Mr. Saum. Mr. Towns, if I can defer that question to my
colleague, Mr. Lennon. He's our Vice President of Membership
Services and my area of expertise is gambling and agents.
Mr. Towns. Fine, thank you.
Mr. Lennon. Thank you, Bill. First of all, I appreciate the
recognition from Mr. McMillen that he shared with his
colleagues on the Knight Commission that there has been
significant progress over the last 10 years and we're very
proud of that progress. Having said that, the challenges that
we've clearly highlighted today exist. There's no denying that
and as the Chairman Stearns indicated, we've got to figure out
those solutions.
I would suggest to you, and Mr. McMillen again pointed out
that his was a personal opinion, that those who served on the
Knight Commission are leaders within higher education. Bill
Friday, Father Hesburgh, the Board of Directors of the NCAA
which are comprised of our university presidents, presidents of
those campuses who are your constituents who serve in your
Districts are absolutely in the best position to solve these
problems.
We have a new group, a task force of the Board of Directors
that is spearheading significant academic reform, taking on the
challenges of the cost issues that we have talked about today
and it's our believe that again, higher education and the
leaders in higher education are absolutely in the best position
to solve these problems. The track record has been building.
There has been success over the last decade and I would
encourage you to continue to hold us accountable because we
want to be held accountable. There's no doubt about that. But
how we go about making that change ought to be done within the
higher education community.
Mr. Towns. Let me say that, and I know my time has expired,
but let me just make this comment, Mr. Chairman. You know, when
we were doing the legislation on the Student Athletes Right to
Know, I remember the same kind of comments being made, you
know, by presidents and some of them I was really shocked that
I received phone calls from to say that you should not
interfere with this and we are only asking for information to
be given out. And finally, of course, we move forward and it's
now law and of course, I'm convinced that a lot of youngsters
and family members have benefited from this law, but at the
same time there was great opposition from the NCAA and from the
administrators across this country. They basically made the
same statement that you just made, but now today, I'm listening
to comments here and they're saying that hey, it makes sense.
So maybe we need to do some other things that make sense and by
moving forward, after we have hearings, collect information and
then bring legislation. I'm not interested in legislating with
dollars, having hearings and getting facts and talking to a lot
of people before moving forward. But I do believe that there
are some things that need to be fixed. When I hear the stories
coming from athletes as I listen to the story given to us by
Congressman Gordon in reference to the student from Tennessee
where the student had talked to an agent and then decided after
talking to the agent and of course, spending $1300 on a plane
ticket and getting dinner and decided to give the money back to
the agent that the agent spent on him because he now wanted to
return to school and then for the school, the NCAA to say that
he can't come back. To me, that's just crazy stuff, if we're
concerned about education. So I think we've seen enough of that
to say that something needs to be done. As to exactly what I
think we need to talk to some more people, but I don't think
that as Members of Congress that we can sit back and allow this
kind of thing to continue to happen without us taking some kind
of action.
Mr. Chairman, I know my time has expired.
Mr. Stearns. I thank the gentleman. Mr. Terry, you are
recognized.
Mr. Terry. Thank you, Mr. Chairman. Just as a statement
before I ask my specific questions. As a college football fan
or as my wife says, fanatic, that I'm just obsessed with that,
that is my one hobby. I love college sports. I love amateur
sports. And as a fan, share frustration with the NCAA that they
do stifle the student athletes that they don't recognize the
realities on campus per se, but in their defense, I always say
that I think some of the rules, as tough as they may be, and do
stifle the athlete, the intention of why they implemented a
rule or regulation is probably, was necessary to keep the
purity of the sport which attracts me as a fan. So how do you
balance that?
And I do share sympathy or have sympathy for the student
athlete. I've met several student athletes and certainly
sympathize with you, although certainly as a guy who paid for
my own college and worked 20 or 30 hours a week, I see people
that get scholarships and don't think that certainly it's not--
you're getting some advantage out of the system that a lot of
us students didn't have the opportunity to get. I didn't score
high enough on SATs to be able to get scholarship money, so I
worked for it. But you worked for it too and I'm kind of--what
I'm trying to work through here is the students' voice. So I'm
going to ask you, Mr. Huma, why is it necessary that there be a
separate student organization, the CAC that you've developed?
Why should there be a separate student voice than the one Mr.
Aguirre sits on? And there has been some concerns about your
organization and you mentioned it in your speech with the tie
in to the U.S. Steelworkers. I'm not sure what that really is
or what that has to do with anything, so if you'd explain what
you're doing. And some of the accusations or thoughts are that
your organization is trying to quote unquote unionize players
and as a fan I'll tell you that scares the heck out of me
because that's all I want to do is have a great ticket to the
Nebraska-Notre Dame game and then the players go on strike the
day before because you didn't get your living allowance. So you
know, explain why it's necessary there's a separate student
entity, explain the connection to the Steelworkers and the
unionization issues.
And then I'm going to ask you is your student organization
connected to the NCAA an effective student voice?
Mr. Huma. Thank you. The Collegiate Athletes Coalition is a
student group. We started at UCLA as an official student group
and we do plan on forming a players association through a
network of student groups, somewhat similar to a fraternity. We
are not unionizing----
Mr. Terry. Or union.
Mr. Huma. It's similar to a union, but we can't unionize
because we're not considered employees. There's no way we can
do it, so an accurate description of our group is an advocacy
group. And we're getting players together to try to form a
strong power base to voice our concerns and influence the
rules. And I know that the Student Athletic Advisory Committee
system exists and I think that it is necessary for student
athletes to have an independent voice.
In my written testimony, Supplemental Sheet A, goes down
the list of why the student athletic advisory system is really
limited in its potential. And it's not for lack of effort by
the athletes on these student athletic advisory committees, but
the NCAA has designed the system and it's designed the system
in a way to where it can't be effective. Me, as a student
athlete, I didn't even know about the student athlete advisory
committees until I was done playing football. I mean these
student athletes, by and large across the campuses, they don't
know about the student athlete advisory committees. Even the
representatives on the committees, there's no mandate to orient
them to how NCAA rules are passed, the whole process. So as
representatives, as our representatives, the student athlete
advisory committees, again, there's many more potential student
athletes. There's no system, no comprehensive system to collect
the opinions of student athletes so that the representatives on
these committees can effectively voice our concerns. So I think
that these are symptoms of a bigger problem. Some of the things
we talked about in student athlete welfare issues and I think
part of it is that student athletes don't have any power at all
in NCAA sports and as you can see, the student athlete advisory
committees, they were established in 1989, and here it is 2002,
and we're still fighting for fundamental protections.
Mr. Terry. Is there an association with the U.S.
Steelworkers?
Mr. Huma. Oh yes, we're affiliated with the United
Steelworkers of America. When we first started organizing, we
realized that it was similar to a unionizing effort and that we
didn't have the expertise to organize the Nation of student
athletes, so----
Mr. Terry. Mr. Aguirre, is your voice not independent?
Mr. Aguirre. Make no mistake about it, my participation on
the Student Athlete Advisory Committee comes as a student
athlete first. While it has been created by the NCAA with the
purpose of engaging student athletes in discussions, my
allegiance lies to my teammates, my fellow Sun Devils, the
120,000 other student athletes that participate in Division 1
across the country.
When we go into discussions about what is in the best
interest of student athletes, we do that with or without the
support of what the NCAA or our athletic directors or our--we
do it with what we think is in the best interest of student
athletes and that's independent. If you ask if our voice is
independent, our voice is our voice and we represent student
athletes. We feel that there is an appropriate and important
role for the student athlete advisory committees to play on
campuses, in conferences and at the national level. We have the
ear of the administrators on the management council who
ultimately make the decisions. We sit in those meetings. We
give our voice and we give our opinion, when necessary. And
they do listen. We have numerous instances when we have changed
the minds of administrators and have influenced legislation so
that has either been defeated or passed.
We would like to participate in an opportunity or have the
opportunity engage more student athletes in those discussions,
whether that be through an outside--not through an outside
community, but through a panel or subcommittee of student
athletes participating on a certain sport to engage their
expert opinion on what is in the best interest of 1A football
players. However that looks, we are in the business of getting
student athletes involved in that experience and the difficult
part of that is that on many levels, particularly on the
campus, it is up to the administrators and the student athletes
on that particular campus to mobilize and to create
opportunities for themselves for student voice. Because if the
student athletes don't take ownership in their experience, it's
difficult for anybody as a student athlete to complain if
they're not trying to make the change at their own level.
Mr. Terry. Thank you.
Mr. Stearns. The gentleman's time has expired. The
gentleman from Tennessee is recognized.
Mr. Gordon. Thank you, Mr. Chairman, I want to add my
welcome to the Panel, potentates and nonpotentates.
Mr. Saum, I was shocked to hear your testimony in apparent
favor of Federal legislation, uniform Federal legislation in
banning gambling. Did I hear that correct?
Mr. Saum. You did hear that correct, yes sir.
Mr. Gordon. Are you afraid that old camel is going to get
his nose under there and do some harm?
Mr. Saum. No, Mr. Gordon, I was looking forward to our
exchange. I think there's been some misunderstanding, on
possibly both of our parts. The NCAA is incredibly interested
in legislation to encourage sports agents to honor the welfare
of our student athletes. We presently work with the Uniform
State Law Commission to attempt to pass this at the State
level. We passed it in 12 States last year. We think we'll have
about 10 more this year. We're not against Federal legislation
by any means regarding sports agents.
Mr. Gordon. But you told me or your organization told me a
number of times, I've talked with the staff. I talked with some
fellow over in Maryland who I think was the president at the
time.
Mr. Saum. What our interest is is not just the legislation.
It's the enforcement of the legislation and it's been my
experience and we talk a lot about the problems with illegal
sports wagering, we aren't the cops. We need help from law
enforcement. We need help from law enforcement.
Mr. Gordon. Right, that's why my legislation would get you
that help.
Mr. Saum. If you can convince us that the FBI will help us,
that's great, but I want to tell you the agent issue and this
illegal sports wagering issue, especially in all due respect in
the recent months has fallen even further down the ``to do''
list. And that's the challenge. So we think at the State level,
and let's just take Ohio, for example----
Mr. Gordon. If I could, so I don't use my time up, what has
happened, yes, there is a uniform statute, yet, basically
you're having the same States that already had statutes past
that. So there aren't any more, I don't think, any more States.
There's only 26 States.
Mr. Saum. I think we've passed the--I think there are laws
in approximately 32 States at this time.
Mr. Gordon. Well, there are still a lot that don't have
them.
Mr. Saum. I agree.
Mr. Gordon. And even those that do are uniform, so I guess,
did I understand you to say that you don't think that this
agent problem, with all the other problems you have, this is
not important enough yet for you to discuss?
Mr. Saum. Oh no. It's a terribly significant problem. It's
actually in my title.
Mr. Gordon. I thought you said there were some other things
more important and you didn't even want to think about this one
now.
Mr. Saum. No, no. What I'm saying is we need help from law
enforcement and we think we can get more help from State law
enforcement officials than Federal, because we think the agent
issue falls down the ``to do'' list when it comes to enforcing
problems.
Mr. Gordon. Well, part of the legislation would empower the
States to do something there too.
Mr. Saum. I think frankly we're allies. You may not feel
that way at this time, but I think we're allies and I think the
more that we meet on this, the more we can move the ball.
Mr. Gordon. You are the sole, you in terms of NCAA, is the
sole reason this legislation has not passed, even though I have
a number of letters from coaches all across the country. It was
always your opposition and the reason that I was always given
was the nose of the camel is going to lead to further
legislation which is somewhat ironic in that, as I understand
the way the NCAA was created, was back when football was so
rough that Teddy Roosevelt, who was certainly no shrinking
violet, said if you don't get something together, we're going
to have some Federal legislation. So that's the way it was
created in the first place. It was really by the force of the
government that created you. If we had waited for you to do
something about integration, would we still be waiting? In
Title IX, I'm sure is something that people can disagree with,
whether they should have it or not, but certainly no one can
disagree that the calibre of women's sports and looking at the
Olympics right now has been dramatically increased. As the
father of a little daughter, you know, I was talking to the
University of Tennessee athletic director some time ago and she
said that as they were trying to get women involved or families
involved in their women's athletics that it was really young
families bringing their daughters, not really sportsmen, but
they were bringing their daughters to see those kind of role
models. Now if we had waited for the NCAA to do something, we'd
still be waiting. So I respect your comment that you want to
talk about this some, but again I want to remind you, you are
the reason that nothing has been done. And so we're going to
move forward and with the permission of the chairman, I'm going
to submit some questions that I would like for you to respond
to or your organization to respond to. They'll be made a part
of the record and hopefully we can find a way to find some
accommodations here.
Mr. Saum. I look forward to that discussion.
Mr. Shimkus [presiding]. The gentleman's time has expired.
Thank you, Mr. Gordon. And I will recognize myself for 5
minutes. And first of all, it's an honor to have Mr. McMillen
here. I'm on the afternoon basketball court and your name is
always thrown around as the people that help break noses and
throw bodies around, so you're welcome to come down this
afternoon.
Mr. McMillen. Thank you.
Mr. Shimkus. Although we may have trouble today with all
the votes we got scheduled.
I want to go to a couple issues, first of all, Mr.
Fahrenkopf. You state that only 1 to 3 percent of all sports
betting is done in Nevada and the rest is illegal. Is that
correct?
Mr. Fahrenkopf. That's correct, Mr. Chairman.
Mr. Shimkus. Can you tell us where the majority of sports
betting is conducted today, small communities, internationally,
of course, in our Telecommunications Subcommittee we've always
been concerned about the off-shore betting and how you get a
handle around that.
Mr. Fahrenkopf. I think the recent Super Bowl maybe gives
us some instruction. There was legally bet in Nevada, we don't
have the final numbers, but the guestimation was about $70
million, somewhere between $65 and $70 million legally bet on
the Super Bowl. The estimates, if you talk to law enforcement
and other experts, will tell you that somewhere between $5 and
$6 billion was illegally bet on the Super Bowl game. Of that
amount, a much larger proportion in the recent past has been
bet on the internet. There are by most estimates of experts,
somewhere between 1,500 and 2,000 websites, all off-shore.
There's no domestic websites, where not only college students,
but anybody who wants to place a bet, I mean you're taking a
chance that you're going to collect if you win, where you can,
in fact, place a bet, how much of it, it's debatable. Some
experts will say maybe 25 to 30 percent is now bet on the
internet, the rest is with illegal bookies, student and
otherwise.
Mr. Shimkus. Thank you. And for the record, I'm not one of
those who placed an illegal bet on the Super Bowl. Do you
believe that gambling is an addictive behavior?
Mr. Fahrenkopf. Absolutely. For 1 percent of the
population, the Commission spent a great deal of time and
effort in looking at gambling and what the impact is on people
who can't control themselves. Harvard's Medical School, School
of Addiction, the National Research Council, the National
Academy of Sciences, everyone now, even the opponents of
gambling, say that about 1 percent of the adult population are
pathological gamblers, otherwise can't control their behavior.
Mr. Shimkus. And I think States are trying to get a handle
on this as gambling has come to Missouri. I'm from Illinois and
in Illinois the State legislatures have tried to address how do
you help those people----
Mr. Fahrenkopf. That's exactly right, Congressman. In fact,
in many States, a portion of either the tax that's paid by the
industry or as you know in some riverboat States, Illinois
being one, you have to pay to go on a boat, a certain portion
of that is earmarked to go to counseling organizations and for
treatment facilities.
Mr. Shimkus. Let me go to a different line of questioning
and for you, Mr. McMillen, some observers say that we know that
the National Football League has salary cap. Some people say
that's where baseball has to go to have a salary cap, just so
they can stop themselves from spending and getting involved in
the student athlete debate that I sat in for a few minutes.
Isn't this the same kind of problem that the colleges and
universities have in that aspect or could have?
Mr. McMillen. As I said before, a major issue is revenue
distribution, how you circulate the money around. I'm not sure
that the NCAA and they are trying, will come with a formula
that really fits in line with educational values and that was
the point I made all along when I expressed this earlier, but
as I said, earlier people said what's the Federal role in these
issues? Well, there's been a Federal role in sports forever. I
mean the Amateur Sports Act established the United States
Olympic Committee. I mean these are big issues and for people
to say that the Federal Government shouldn't be involved in
this, I think our educational institutions, our athletic sports
programs need to be reviewed appropriately.
Mr. Shimkus. And I think you'd have a lot of agreement. My
colleague, Mr. Gordon, just brought up a lot of the historical
aspects. It's always good to remember. And with the Winter
Olympics going on right now and understanding the change from
these--from allowing professional athletes now and it's almost
into the student debate, and the revenues generated by big time
collegiate athletics and the compensation in vogue. And I'm
getting short on time, so I can't go into that as much as I
would like, but let me ask for Mr. Huma and Mr. Aguirre, do
student athletes believe their scholarships and aid are worth
the commitment to represent their school in a sport they
presumably enjoy?
I'll let Mr. Huma go first and then----
Mr. Huma. I think the evidence that they're there doing it
right now, they're agreeing to the system, I think that that's
evidence that yes, they do think it's worth it, but I think
that there are gains that they wish to make to leave them less
vulnerable to physical and financial hardships.
Mr. Aguirre. I most definitely think it's worth it. I think
if you look at strictly the dollar amount from their monthly
stipend that it may be misleading in terms of what exactly they
are putting or getting out of their athletics participation.
When you consider that in some instances they may be receiving
a $25,000 education for their services on their field or on the
court or in the pool, that's a pretty good investment in your
future, not unlike what you do when you do a medical
internship, to make an investment toward your future. You also
take into account that student athletes will receive doctor's
visits for free, you know, you get a cold, you go to the
doctor, you get that. I think there are different things that
don't come into that, don't fit into that set dollar amount
that's tied up into their stipend that really adds to what the
student athlete is getting out of it. I think there needs to be
additional strides taken to make sure student athletes can
receive a little bit more, have the opportunity to, but it's
definitely worth it, based on what they receive now.
Mr. Shimkus. And I'll let you finish and then I'll go to my
colleague from Chicago. But I would--I'll let Mr. Huma, you
mentioned a comment. I know that anyone who played high school
athletics at any level wished they had been able to be
competitive enough to get some type of help to play the sport
they love and continue their education. Of course, that pyramid
keeps narrowing down. Not everybody who is high speed,
collegiate athletes are able to make it to the next level which
is the professional sports level.
Mr. Huma, you want to comment?
Mr. Huma. Yes, thanks. The idea that our scholarships are
the payoff for going to school, for us, as student athletes,
we're told that the payoff is the degree and right now between
football and basketball players, less than half graduate, so I
think--if you ask many of the people who don't graduate, was it
worth it, they might say no, I didn't get my degree.
Mr. Shimkus. And that addresses a whole different debate
that we should ask questions about that.
My time is expired. I'd like to recognize my friend and
colleague from Chicago, Mr. Rush, for 5 minutes.
Mr. Rush. Thank you, Mr. Chairman. Mr. Chairman, you know
how our schedule is and it took a lot for me to get here, but I
certainly wanted to be here and I wanted to commend you and the
overall Chairman of the subcommittee for this hearing. It's a
very, very important hearing in my estimation. I've followed
student athletes over a number of years and have been very,
very cognizant of some of the issues that they are confronted
with.
I want to begin by asking Mr. Saum a question. Mr. Huma
noted that some of the fatalities that resulted during this
summer's training programs, this last summer's training program
and he noted that only $10,000 in death benefits were provided
and no health insurance was provided to athletes. And are you
doing anything to compensate for that? Are you doing anything
to provide better, more comprehensive health benefits and death
benefits in the event of a tragedy for these athletes?
Mr. Saum. If I may, I'd like to defer that question to my
colleague, Mr. Lennon, at the end of the table.
Mr. Lennon. Thank you and I do appreciate the opportunity
to clarify for the record what I think have been some
mischaracterizations of the insurance coverage in general.
First and foremost, the key thing is to make sure we protect
our student athletes and prevent injuries and we have a
Competitive Safeguards Committee that is very diligent, made up
of medical experts, sports scientists, etcetera to do all we
can to make sure that we prevent accidents from happening,
injuries from happening and that's, I think, important to keep
in mind.
When an injury does occur, as a result of participation in
athletics, whether it's in your season or out of your season,
regular football season or spring football, yes, the
institution is allowed to provide you with the insurance
coverage necessary.
I want to clarify as well that during the summer when
you're----
Mr. Rush. Wait now, insurance coverage that's necessary.
Can you specify--are you speaking in terms of health insurance,
comprehensive health insurance and what about death benefits?
Mr. Lennon. Yes, we'll get to the death benefits. We'll
make sure that we can do all we can to make sure the student is
able to get back to class and get back to being able to
participate.
We also have catastrophic insurance in those instances
where there is a significant disability that would run to about
$20 million. Again, that's from the NCAA coverage. In the event
of a tragic death of a student, in this instance we're talking
about a student athlete. Yes, there is a death benefit that is
provided by the NCAA. That is intended to be a supplemental
benefit. Institutions on their own often have a death benefit--
--
Mr. Rush. Supplemental to what?
Mr. Lennon. To an institution's policy which may provide
some expenses, to the family's coverage which very much may
provide expenses and in instances where that safety net fails,
yes, the NCAA's in a position to provide a death benefit.
I do want to note right now and this is important, the NCAA
is examining the gaps and I think that's what I'm hearing from
the testimony today, our concerns about the gaps in coverage.
We are gathering all that information from our institutions to
find out where those gaps are and to try to meet those
particular needs once we gather that information.
Mr. Rush. I'm glad you're answering these questions. Let me
ask you this. A family from the west side of Chicago and
Northwestern student, a university where there was a death
occurred over this last year. The family wasn't from the west
side of Chicago, let's just take a family from the west side of
Chicago, an impoverished community, may or may not have life
insurance, but they have some students who are superb athletes
and one of your schools recruit, say one of these students. And
unfortunately, one of these students suffers a death while
practicing or playing. You're saying that your insurance policy
is to complement the insurance policies of that family, but you
limited it to $20,000? Is that what you're telling me?
Mr. Lennon. Actually, the first source if the family is
unable to provide would be the institution's own policy of
which they may or may not have a policy. In the event, again,
that there's a safety net that does not exist, the institution
does not, the family does not, our current benefits, I believe,
are at $10,000. I want to clarify, that's what we're looking
into. That's why we're getting the data right now from our
schools to find out what type of needs aren't being met through
our current policies. And once we get a handle on the number of
institutions that have policies, and get a sense again of
family commitment, that's when the NCAA's in a position to best
address those particular needs.
Mr. Rush. Mr. Saum, would you have a national playoff
system instead of a bowl game system to--what's your thoughts
about it in terms of reducing gambling in college games, rather
than have a bowl system, having a playoff system?
Mr. Saum. The style of the tournament, whether it's a bowl
game organized event or whether it's a tournament event would
not necessarily in our view impact the level of sports
wagering. The level of sports wagering is impacted by the
ability to place bets and the interest in the game.
Mr. Rush. Mr. Huma or Mr. Aguirre, both of you mentioned
the fact that you thought there was additional compensation
that student athletes should be provided. Have you got any idea
what kind of additional compensation or additional benefits are
you looking at, are you considering, either one of you?
Mr. Huma. Sure. What we're looking at doing is getting
stipends, our scholarship stipends increased to the actual cost
to attendance. Each university puts out a figure called the
cost of attendance and this is the amount of money needed for
any student to survive at that school. Right now, our
scholarships are below that and on average it's about $2,000 to
$3,000 a year. So we'd like a pretty moderate increase just so
student athletes can get by and make ends meet.
Mr. Aguirre. If I may, we, the Student Athletic Advisory
Committee also completely agree. We liked to see that
scholarship amount increased. We'd also like to see some limits
on the types of scholarships that student athletes can receive
lifted, the restrictions on those and some of the work-related
restrictions, the Student Athletic Advisory Committee is
looking into making recommendations on how we can make that a
little bit better for student athletes. But one of the issues
is in a financial situation like we have in this country right
now, we realize that institutions and athletic departments have
a finite amount of money that they have in their budgets and
many of them are running deficits. So we really want to as a
Student Athletic Advisory Committee make sure that when we are
thinking of things from the student athlete welfare standpoint
we need to be aware of all of the issues that are implicated in
that and not just the issues that affect football and
basketball. Primarily speaking, football and basketball are
funded fully by their institutions. Well, when we start talking
about increasing money, that's got to come from somewhere in an
institution's budget and in many cases on some of the smaller
campuses, a lot of the Olympic sports scholarship programs
aren't funded fully. So are we talking about pulling money away
from some of those students who already don't have the right
funding for student athletes who currently do, so we just want
to make sure that before we really ask for any action for
student athletes, we're looking at all the implications that
come with putting more money in one place.
Mr. Rush. Mr. Chairman, if I could have an additional
minute and a half?
Mr. Stearns. Sure.
Mr. Rush. I have one other question. I'm also concerned
about the disparities between women athletics in colleges and
men athletics in colleges as it relates to scholarship
compensation and also health care benefits. Mr. Saum, are there
any research or there any policies or is there anything where
you're considering what some of the disparities are in terms of
women athletes at the college level?
Mr. Saum. Congressman, that is not my area. I don't know if
Kevin wants to help. I know that we certainly abide by Title IX
in our institutions. We have Title IX seminars. Kevin, I'm
sure, can assist me here.
Mr. Lennon. The data will clearly show that we have
increased opportunities for women, in part, as a result of the
actions----
Mr. Rush. I understand about opportunities. I know the
Title IX. I know the standards. But what I'm saying is okay,
women have different health needs requirements than men.
Mr. Lennon. I would not see any distinction that is being
drawn in our current legislation between the benefits, health
benefits that a woman or a man would receive. It's appropriate
for what their needs are. And again, as we talked about the
insurance coverage will relate to injuries and illness that may
be different for a man or a woman, but that would be covered
within the policies.
Mr. Rush. Thank you, Mr. Chairman.
Mr. Stearns. I thank the gentleman and the colleague for
his participation and I appreciate him coming down.
I think we'll go another quick round of questions and I'll
start out.
Mr. Saum, the handout that the American Gaming Association
hands out, shows this money pyramid of $6 billion, 11-year
television contract and you'd mentioned that you allocate about
$400,000 for sports agent and gambling activities and I guess
that includes education and enforcement. So my question is the
gaming commission says you only spend $229,000, you say
$400,000. Just an obvious question is, with that kind of
budget, $6 billion, why wouldn't you be spending more for
gambling activities, that's the gist of the question.
Mr. Saum. Mr. Chair, first of all, their number is correct
a year ago. My number is correct this year with our new budget
year.
Mr. Stearns. But you know, $400,000 is less than 1 percent
of your budget.
Mr. Saum. I think we can do a lot with numbers, as much as
we do with athletics every day with statistics. I'm not so sure
it's actually the amount of money that we spend. What we have
to evaluate is are we impacting our student athletics, both
educationally through our various medium and then from an
enforcement standpoint and we've increased our staff to 7. Now
certainly we all share responsibilities in the issue of----
Mr. Stearns. I'm here to help you increase your staff more
than 7 on a budget of $6 billion.
Mr. Saum. It's not a spin answer on our part. We truly
engage individuals on our campus.
Mr. Stearns. I know, but if money is where your heart is,
then this would show that your heart's not into this.
Mr. Saum. We could expand the discussion just for a moment.
We return, and again, Mr. Lennon might be able to assist me
more here, but 94 cents out of every dollar that the NCAA
receives from our television contract is returned to our
schools in various fashions.
Mr. Stearns. So $6 billion is not really yours?
Mr. Lennon. None of the $6 billion is ours. Our schools
tell us how to spend it.
Mr. Stearns. Okay. Mr. Fahrenkopf, what about the argument
that because sports betting is legal in Las Vegas and Nevada
that this has a proportional effect in communities to create
illegal gambling activities because it's much like if you have
a State that's going to legalize drugs, and the rest of the
States don't, it sort of moves the whole culture down and
everybody says well, if Nevada is legal, why are we going to be
so concerned. It's only going to go to local high schools and
colleagues and communities and this thing is going to permeate
down because it's legal in Nevada. So that's the argument.
Mr. Fahrenkopf. That's a very good question. Clearly, in
the four or five hearings that have held so far, no evidence
has been offered that that is the case, but assuming there was
a possibility that there was and that is why in the chart over
here, in the analysis of----
Mr. Stearns. That's a comparison of the two bills.
Mr. Fahrenkopf. Of the two bills. If you look at 641 and
what's up there, the NCAA has had a change of heart on their
whole attitude since the National Gambling Impact Study
Commission report----
Mr. Stearns. Just answer the question.
Mr. Fahrenkopf. What I'm suggesting is that one of the
things they suggested, we supported and the National Gambling
Impact Study Commission approved was there ought to be a study,
a study done by the Justice Department and law enforcement
people to see whether or not there is anything to that charge.
Mr. Stearns. Now if Mr. Lindsay added that to his bill
would you support it?
Mr. Fahrenkopf. If Mr. Lindsay added what?
Mr. Stearns. That study.
Mr. Fahrenkopf. Not if it's going to close it down first.
We're ready to roll the dice. I've said this before, no pun
intended. If law enforcement and the recommendation comes back
and said Nevada's part of the problem here, Nevada is causing
this difficulty. I'll tell you what, our industry and our State
has got to stand up and take it on the chin.
Mr. Stearns. What does that mean?
Mr. Fahrenkopf. I said that before.
Mr. Stearns. What does that mean ``take it on the chin?''
Mr. Fahrenkopf. We'd have to go along with what the
recommendation of this Congress might be.
Mr. Stearns. So if the recommendation came out that you
would actually support?
Mr. Fahrenkopf. If, in fact, law enforcement and the
studies that are laid out here say that Nevada is part of the
problem, is a contribution to the difficulty that's going on on
college campuses, you're right, we'd have to swallow real hard
and consider very seriously supporting legislation that would
solve that problem. But what we're saying is that there's no
evidence right now.
Mr. Stearns. But you want to see the study?
Mr. Fahrenkopf. That's exactly right.
Mr. Stearns. That's a good point. That's a good point. I
think that's a major statement on your part in this hearing.
I've never heard you quite say that that way.
Mr. Fahrenkopf. I said it before in Congress.
Mr. Stearns. Okay, Mr. Lennon, I appreciate you being here.
You see so much of Nike and other sporting companies now coming
down to high school and giving athletic equipment and this
whole idea of allowing companies to provide sports equipment to
high school team, doesn't that go to the possibility that these
high school students will be influenced and be moved by these
gifts of this high school equipment from these major
manufacturers of tennis shoes and clothes and basketballs and
things? Is that something we should worry about?
Mr. Lennon. Well, perhaps the thing to worry about is the
funding in secondary school education that requires them to
take those type of benefits to support their programs. That's
probably first and foremost. The issue of influence that it may
have on a young person is something that I think we have
continued to see. There are Nike high schools, there are
Addidas high schools that are affiliated----
Mr. Stearns. Just yes or no. Is there an influence we
should be concerned about?
Mr. Lennon. Yes, there is, whether it rises high on your
priority list would be your discussion.
Mr. Stearns. And is there any really scandalous situations
or anything you could point to that would further confirm what
you say?
Mr. Lennon. I probably wouldn't be the one to speak to
that.
Mr. Stearns. Okay. I think my time has expired. The ranking
member, Mr. Towns.
Mr. Towns. Thank you very much. Mr. Lennon, how do you
respond to the fact that the Student Right to Know Act is not
being complied with by many universities?
And what is NCAA doing to punishing those who are not
complying? Is there any action taken? I've not read anywhere
where any school that did not report that any action has been
taken and this is the law.
Mr. Lennon. It is the law and it's one that, as you know,
cooperatively the NCAA in 1990, as your bill was being
introduced, mandated that will publish graduation rates and
we've worked cooperatively for the last 11 years to do that.
This, Congressman, is the first time that I have really heard
of the systemic problem that you have noted regarding our
institutions not providing that information to prospects. Our
numbers quite candidly don't bear that out. We have not had
many self-reports or reports from parents and prospects that
they don't have the information. Every year, at the NCAA we
send out to every high school that look, we're going to put
this on our website. You can see the graduation rate by team of
all of our institutions. That's available and we tell the high
schools they can go get it. We require our schools in early in
the recruiting process to provide that information to prospects
and in no event can do they do that later than the letter of
intent signing date. So we have legislation that clearly
addresses your concern.
Are there some breakdowns locally? Perhaps with those
coaches that may exist. Our numbers, quite candidly, don't show
that it's nearly as systemic as you're talking about. In fact,
on a more regular basis, I do think we're having young people
who are making evaluations based on the success of those teams,
academically, as well as athletically. That's always going to
be the case. But I think we have people paying attention to the
graduation rates and if you have specific evidence that would
come forward that says I know of schools who have not provided
this to a prospect, I can tell you the NCAA would be very
interested in hearing that.
Mr. Towns. We will provide it. I read recently in the news
that the University of Alabama was given 5 years' probation and
scholarship losses for paying high school coach $115,000 for
his star defensive tackle to attend this school. What
infraction constitutes the ``death penalty'' for a program?
Because what people are saying the NCAA is unwilling to punish
the revenue-generating schools such as Alabama which generates
a tremendous amount of revenue. I think it's in the SEC
Conference, but is that true? Because this is the general
feeling that you get from people that if you have university
that generates a tremendous amount of money, the NCAA will be
reluctant to take action because after all, this school brings
in X amount of dollars.
Mr. Saum. Mr. Towns, I can help you with that answer.
Mr. Towns. Sure.
Mr. Saum. If an institution commits what is identified as a
major infraction, much like you just described, they go on what
we call a 5-year clock and if there is another major infraction
within that 5-year clock, 5-year period, that institution then
is at risk to have the ``death penalty''. I think it's
important to note for this committee, that the NCAA, the 340 of
us in Indianapolis have nothing to do with that penalty. We do
investigate those institutions, but we prepare our findings and
make a presentation to a committee on infractions and the
people that sit on the committee on infractions are those
individuals from our schools. They're athletic directors,
lawyers, faculty athletic reps. So it is that group that
decides when to issue the ``death penalty'' or not to issue the
``death penalty.''
Mr. Towns. All right. I think my real concern here is what
happens to that student who had nothing to do with the $115,000
or the $25,000, but he's a victim. What happens to that person?
Mr. Saum. Well, certainly, if that institution goes on
probation or has some sort of scholarship reduction or is
removed from the bowl game, the entire team is affected. Those
are the penalties that our schools have voted on, agree with
and want to be implemented.
Certainly, there is always the discussion of how the
student that is left behind that may be affected, but that is
part of the process. We've improved our rules and penalties. We
actually will follow the coach if the coach leaves. That used
to be a criticism. But the coach is now followed with penalties
if he or she goes to another school.
Mr. Towns. I'm concerned about that athlete who really had
nothing to do with that and all of a sudden he finds himself a
victim.
Mr. Saum. That athlete, if the eligibility remaining of
that athlete is less than or equal to the removal from the bowl
game or the tournament can leave that institution and be
immediately eligible at the next institution. So that athlete's
welfare I think is taken into consideration there, sir.
Mr. Towns. Thank you very much. Let me ask this question,
just 1 minute?
Mr. Stearns. Sure.
Mr. Towns. You know, we have on college campus all the time
where we name a building after someone who has contributed a
tremendous amount of money, it's generally not because they
provided great educational leadership, it's generally the
dollars that they've contributed would determine the name of
the building. You can just do research on that and you'll find
that that's generally what happens throughout the Nation. How
do you feel about corporations coming in and bidding on
athletic centers in terms of to be able to have it named after
them and I'm talking about corporations like Nike and whoever
would come in and say well, we will contribute X amount of
dollars to the university you will name your athletic center
after Nike. I'd like to get your views on that very quickly,
starting with you, Tom.
Mr. McMillen. That doesn't bother me as much as again, how
the money is used. I mean I'm all for universities with a good
taste, enhancing their revenue base, but how the money used is
really the issue. Is it used to promote educational values?
Mr. Towns. Any other comments of others? I'd like to get
yours, Mr. Lennon. I'm going to call your name, but anybody
else----
Mr. Aguirre. I would just like to say that I think as a
student athlete, we would be less concerned about--I mean we
would be concerned in some instances about where the money
comes from, but if someone in the community is willing to
donate money to enhance the experience, the services for
student athletes, then that's really a good thing for student
athletes, as long as that money is legitimate, I guess you
could say.
Mr. Towns. Okay.
Mr. Lennon. Your question notes that athletics is not
really any different than the rest of higher education, whether
it's an arts building that's being named or a stadium and I
think we need to keep that in mind. I just agree with what both
the other gentlemen have said. It's the influence of the money
that we need to be the guardians of. It's not the money itself.
Mr. Towns. Right. Any other comments on that? Thank you
very much. Thank you, Mr. Chairman.
Mr. Stearns. Thank you. I thank my colleague. I want to
thank all the panelists for your time and patience while we
voted. I think this committee having jurisdiction over sports,
in general, has incumbent responsibility to continue this
discussion. I think all of you have given us a lot to think
about and I know many of us will be comparing notes. So again,
I want to thank you very much and the subcommittee is
adjourned.
[Whereupon, at 1:08 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Prepared Statement of Kevin Lennon, Vice-President for Membership
Services, National Collegiate Athletic Association
On behalf of the National Collegiate Athletic Association (NCAA), I
am pleased to have the opportunity to provide the committee with
background on the methodology and distribution of graduation rates as
required under the Student Right to Know Act and the accompanying
requirements of the NCAA and its member institutions. I will also
provide an overview of our student-athlete benefits. The NCAA is a tax-
exempt, unincorporated association of approximately 1,260 colleges,
universities, athletics conferences and related organizations devoted
to providing athletics opportunities for and supporting the educational
goals of male and female student-athletes.
Graduation Rates
The NCAA membership passed legislation in January 1990, mandating
the collection and reporting of graduation rates data. In November of
the same year, the Congress passed the Student Right-to-Know Act and
the NCAA altered its own legislation to meet the strictures of the Act.
The NCAA began collecting and reporting institutional graduation rates
for students and student-athletes in 1991, and to date, has released 11
annual reports containing graduation-rate data.
For the first seven years of the data collection process, the NCAA
gathered information using its own collection form based on federal
law. Beginning in 1998, the U.S. Department of Education began
collecting the data as part of the annual Integrated Postsecondary
Education Data System (IPEDS) data collection process, and the NCAA
arranged for the IPEDS data to be transferred to the NCAA data base so
the Association could prepare and distribute the actual reports for our
member institutions. The NCAA has maintained that cooperative
relationship with the Department for the last four years.
Current NCAA and federal legislation mandates that institutional
reports be provided to prospective student-athletes, their parents,
coaches and guidance counselors. The NCAA assists its member
institutions in notifying the high school coaches and guidance
counselors by posting the data on our Website and notifying by mail all
high schools in the country that the data are available. This system of
notification has met with the approval of the U.S. Department of
Education. The transmission of the data to the prospects and their
parents remains the responsibility of each member institution.
NCAA Bylaw 13.3.1.2 proscribes that member institutions will
provide the information to the prospects and to the prospects' parents
at the earliest opportunity after the institution's first arranged in-
person encounter with the prospect or upon request. However, in no
event can an institution provide the information later than the day
prior to a prospect's signed acceptance of the National Letter of
Intent or signed acceptance of the institution's written offer of
admission and/or financial aid.
Historical perspective on the graduation rates
Data have been collected for entering freshman classes from 1984 to
1994. The overall graduation rate for student-athletes at Division I
institutions has been higher than the student body rate at those same
institutions in every year since the NCAA adopted higher initial-
eligibility standards for athletes in 1986. The most recent data show
that Division I student-athletes graduated at a 58 percent rate, while
the general student body graduated at a rate of 56 percent. In fact,
the graduation rate of student-athletes other than those participating
in football and men's basketball is above 60 percent.
Unfortunately, the rates for men's basketball and football are
lower than the overall student body rates. For the entering freshman
class of 1994, Division I-A football players graduated at a 51 percent
rate and Division I men's basketball players graduated at a 40 percent
rate. While these numbers are unacceptably low, it is important to note
that when they are disaggregated by ethnicity, both African-American
and white student-athletes in those sports perform better than the same
ethnic and gender groups within the overall student body (except for
white male basketball players).
For example, African-Americans in Division I-A football graduated
at a 45 percent rate while all African-American males at the same
schools showed a graduation rate of 37 percent. Likewise, white
football players at the Division I-A level graduated at 60 percent
compared to a 59 percent rate among white males in the student body. In
Division I basketball, African-American males who entered college in
1994 graduated at a 35 percent rate and their counterparts in the
student bodies at Division I institutions graduated at a 31 percent
rate. The exception to this trend is among white males in the sport of
basketball who graduated at a 52 percent rate while white males in the
student body graduated at a 57 percent rate.
Even with the comparative success of many of our student-athletes,
the NCAA Division I membership has determined that more efforts must be
made to improve academic performance of student-athletes. To that end,
the Division I Board of Directors is currently contemplating
significant increases in the progress-toward-graduation requirements
that dictate the level of academic performance that student-athletes
must achieve to maintain eligibility for athletics competition. In
addition, the Board will be reviewing suggestions regarding
institutional penalties for unacceptable academic performance among
athletics teams. The Board of Directors has set academics as a top
priority, and the NCAA governance structure is pursuing these rules
changes with great vigor. Guiding the Association's discussion of
appropriate standards is a remarkable data set from the last decade of
implementing current requirements, and we believe that we have a plan
that will lead to much better academic performance among student-
athletes.
Enforcement of Bylaw 13.3.1.2
The violations that were reported were isolated to only a few
prospective student-athletes, and resulted from an oversight on the
part of a coach or other athletics department staff member. Only a few
of the reported cases appeared to involve systemic deficiencies in
meeting the requirements of the Bylaw. Institutions that have violated
the bylaw typically have been required to review their procedures for
providing the required information, and have been required to implement
additional procedures or processes to ensure that the appropriate
information is provided to prospective student-athletes in a timely
manner. In addition, the involved staff members may be required to
undergo NCAA rules education sessions or reviews to ensure that those
involved understand the requirements of the Bylaw and the institution's
obligation to provide the information within the specified time period.
Finally, in some instances, the involved coaching or other staff
members have been reprimanded, admonished or cautioned regarding their
failure to abide by NCAA legislation.
Sources of Financial Aid/Benefits Available to Division I Student-
Athletes
The NCAA takes the highest interest in the overall welfare of
student-athletes and provides specific legislative guidance and special
programs to ensure the student-athlete's financial aid opportunities
meet the student-athlete's need. Although a student-athlete typically
is eligible to receive financial aid up to the value of a full grant-
in-aid, which is defined as tuition and fees, room and board, and
required course-related books; in many situations, NCAA regulations
permit student-athletes to receive funds from additional sources that,
in combination with institutional financial aid and other outside
sources of aid, exceed the value of a full grant.
These outside sources are numerous and include specified government
grants for educational purposes, other scholarships, and grants and
legitimate loans. Also included is outside employment during the school
term after a full academic year of residence and academic eligibility.
The student-athlete is then able to earn up to $2000 annually. (There
are no restrictions on the amount a student-athlete can earn during
vacation periods.)
The Division I membership is examining financial aid models that
would expand current opportunities for student-athletes with unmet need
to receive institutional financial assistance unrelated to athletics
ability up to the cost of attendance. We anticipate that proposals will
be developed for consideration by the Division I membership in the fall
of 2002. It should be noted that, under current legislation, NCAA
member institutions provide over $1 billion annually in financial aid
assistance to student-athletes.
Special benefits programs also currently exist to help the student-
athlete. One example is the Special Assistance Fund from which a
student-athlete with special needs (Pell qualified) may request
additional financial aid with no obligation to repay such aid. (For
example, a student-athlete can buy clothing, plane tickets home or pay
for other personal emergencies from this fund.)
A new Student-Athlete Opportunity Fund has been established to
enhance educational and developmental opportunities and to provide
direct benefits for student-athletes. The fund will start at $17
million for the 2002-03 academic year with 13 percent increases
thereafter during the term of the NCAA basketball television contract.
The funds are to be allocated to the conference offices (beginning
August 2003) through the broad based formula (based on grants-in-aid
offered and the number of sports the institution sponsors on the
varsity level). Maximum flexibility will be provided to use the funds
for educational and developmental opportunities for and direct benefits
to student-athletes. Some examples of permissible uses include; summer
matching grants for men's and women's basketball prospects to attend
summer school; incidental incentive funds for improving graduation
rates; degree-completion programs and payment of premiums for
disability insurance for potential professional prospects.
Additionally, an Academic Enhancement Fund of $50,000 per
institution is distributed through conference offices. Institutions are
encouraged to use these funds, within specific guidelines provided, to
enhance the student-athletes' academic experience. The fund is
scheduled to increase by 4.25 percent each year during the course of
the CBS contract beginning in the fiscal year 2002-03. In total, nearly
three-quarters of a billion dollars over the 11-year term of the new
CBS contract will be earmarked specifically for Division I student-
athletes.
Under current NCAA regulations, institutions are permitted to
provide student-athletes with athletics medical insurance to cover
expenses related to injuries or illnesses that are a direct result of
participation in intercollegiate athletics. The NCAA membership is
currently considering legislative proposals that expand medical
coverage related to student-athlete's injuries or illnesses to include
any illnesses or injuries during the academic year regardless of
whether such injury or illness is athletically related. The proposal
would also include coverage during the summer vacation period while
participating in voluntary physical activities (supervised or
unsupervised) that will prepare the student-athlete for competition.
The NCAA's basic purpose is to maintain intercollegiate athletics
as an integral part of the educational program. The benefits of
participation are designed to enhance the student-athlete's overall
educational experience and provide necessary support for the student-
athlete to successfully complete his or her educational career in a
timely manner. Numerous benefits incidental to a student-athlete's
participation in athletics are available to ensure the safety and
welfare of the student-athlete while participating in intercollegiate
athletics. Finally, available sources of financial aid allow student-
athletes (particularly student-athletes with unmet need) to receive
financial assistance over and above the student-athlete's full grant-
in-aid, and in many cases, above the student-athlete's total cost of
attendance.
______
Major League Baseball, National Basketball
Association,
National Football League, National Hockey League,
February 11, 2002
The Honorable Cliff Stearns
Chairman
House Subcommittee on Commerce, Trade and Consumer Protection
2125 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Edolphus Towns
United States House of Representatives
2232 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Stearns and Representative Towns: Your Committee
plans to hold a hearing that will address the issue of gambling on
college athletic contests. Legislation is currently pending in both
Houses that would end legalized gambling on amateur sports. Currently,
under the Professional and Amateur Sports Protection Act of 1992
(PASPA), gambling on both professional and amateur sporting events is
illegal in virtually every jurisdiction, with the exception of a sports
book in Nevada and a sports lottery on NFL games in Oregon. Pending
legislation would partially close one of these loopholes, by
eliminating the Nevada sports book on amateur games only.
Our leagues support any reasonable effort to control sports
betting. Nonetheless, we think that a college-only bill is flawed, and
should be amended to prohibit gambling on professional sports as well.
On at least three prior occasions, Congress has addressed the
subject of sports gambling, but has never before distinguished between
betting on amateur games and betting on professional games. In 1961,
Congress maintained parity between amateur and professional sports when
it made fixing athletic contests a federal crime and banned interstate
sports wagering over the telephone. The same approach was applied in
1974 when Congress amended the federal lottery laws to allow states to
conduct lotteries, but expressly prohibited sports lotteries.
In 1988, the professional sports leagues, in conjunction with the
NCAA, sought an extension of the sports lottery ban to all forms of
sports gambling. The legislative effort lasted for three years,
culminating in the 1992 PASPA law. PASPA made no distinction between
professional and amateur athletics, and, indeed, was supported by
definitive Congressional findings regarding the pernicious effects of
gambling on both professional and amateur sports.
Although the movement for PASPA came from the professional leagues,
and the Oregon lottery never included college games, the NCAA was an
active partner in the effort to enact the 1992 law. On sports gambling,
both then and subsequently, the professional leagues and the NCAA have
been united.
As we understand it, there are two primary rationales underlying
the pending legislation, both of which are grounded in the report of
the National Gambling Impact Study Commission. The first relates to
fixing athletic contests and the second to the attraction of sports
betting as a gambling gateway for college students.
With respect to the first issue, we understand and concur with the
view that student-athletes may be exposed to economic temptation, but
do not believe it is reasonable to conclude that these forces are only
at work in college athletics. Indeed, all of the professional leagues
take seriously the effect that gambling can have on the integrity of
our games. All have adopted--and vigorously enforce--strict anti-
gambling policies that are intended to insulate professional athletics
from the corrosive impact of sports betting.
As to the attraction of sports betting to students, there is no
reasonable basis to conclude that collegians are merely betting on
college teams. If Congress wants to address fully gateway sports
gambling, it cannot ignore the attraction to students of high-profile
professional games. Indeed, that attraction will only increase if an
amateur-only bill is passed and betting on professional sports contests
becomes the only lawful form of sports wagering in Nevada.
We do not agree that the legislation must be limited to college
games in order to implement a recommendation from the Gambling
Commission. Indeed, the mere introduction of the pending bill already
breaks with the Commission, which recommended that the Nevada
legislature, not Congress, end legalized gambling on amateur sports.
Further, the Commission made a specific finding that sports betting is
a gateway form of gambling for young people, a conclusion that merits
federal intervention. Amending such legislation to include professional
sports would be entirely consistent with--and would in no way
contravene--the report of the Gambling Commission.
We doubt that Congress intends to suggest that gambling on college
games is harmful and undesirable, but that gambling on professional
games is benign and tolerable. Nor do we believe that Congress seeks to
instigate more gambling on professional contests, a result that is
certain to occur if legislation extends only to gambling on amateur
games. A college-only bill, though well-intentioned, only imperfectly
solves problems at the college level, while creating new and
substantial problems for professional sports.
If Congress intends to re-open federal sports gambling law, we urge
that any such legislation maintain parity of treatment between amateur
and professional sports. Any departure from this approach to which
Congress has consistently adhered, will result in a highly regrettable
precedent that is needlessly damaging to professional sports.
We ask that this correspondence be made a part of the official
hearing record. Thank you for your consideration of our views. We look
forward to working with you on this legislation.
Respectfully submitted,
Thomas J. Ostertag
Senior Vice President and General Counsel
Office of the Commissioner of Baseball
Richard W. Buchanan
Senior Vice President and General Counsel
National Basketball Association
Jeffrey Pash
Executive Vice President
National Football League
William L. Daly
Executive Vice President and Chief Legal Officer
National Hockey League