US Sports Betting

Senators Hatch, Schumer Introduce Federal Sports Betting Bill

Outgoing US Senator Orrin Hatch (R – Utah) and Senate Minority Leader Chuck Schumer (D – N.Y.) introduced their highly anticipated bill on Wednesday that aims to create a federal regulatory structure for sports betting. It’s an interesting decision by Hatch, in particular, considering he is retiring and there wasn’t enough time in the legislative session to do anything about the bill. Not that it matters, anyway, as the government is currently shut down. Hatch, one of the original authors of the Professional and Amateur Sports Protection Act of 1992 (PASPA), the legislation that banned sports gambling in the U.S., is hoping this will set the table for lawmakers to continue next year.

Federal Oversight of State Gambling

Senator Orrin Hatch

The Sports Wagering Market Integrity Act of 2018 leaves the decision as to whether or not to legalize sports betting up to each individual state, but at the same time establishes a regulatory framework that each state must follow. States must have their regulations approved by the federal government before they can go live with a sports betting industry.

In a press release, Senator Hatch said, in part, “This bill is the first step toward ensuring that sports betting is done right in the states that choose to legalize it. Just as importantly, it provides protections for states that choose not to go down that path.”

“For the better part of this year, I have engaged with and learned from stakeholders on all sides of this issue – the gaming industry, professional and amateur sports leagues, consumer advocates, data providers, law enforcement, and many others,” Hatch added. “The result of those discussions is a comprehensive bill that tackles numerous, complex issues and includes provisions to protect the interests of each of those stakeholders.”

Senator Schumer also chimed in:

“….I believe the time is now to establish a strong national integrity standard for sports betting that will protect consumers and the games themselves from corruption. The bipartisan legislation that Senator Hatch and I have introduced, follows the principles laid out in the federal framework that I released in August and will serve as solid foundation upon which we build the appropriate guardrails around the burgeoning sports betting industry.”

Traditionally, gambling law has been left to the states; Hatch’s office acknowledges this. Hatch believes, though, that “the interstate nature of most sports wagering and the thriving, transnational illegal market demand the attention of the federal government to establish consistent standards for sports wagering regulators and to provide law enforcement with additional authorities to target the illegal sports wagering market and bad actors in the growing legal market.”

A load of bullet points are listed in the press release, summarizing the contents of the bill. Some of the more interesting include the following:

• Require that sports wagering operators use data provided or licensed by sports organizations to determine the outcome of sports wagers through 2024, and set requirements for data used thereafter;
• Establish a national self-exclusion list;
• Put in place a variety of consumer protections, including disclosure, advertising, and reserve requirements;
• Establish recordkeeping and suspicious transaction reporting requirements;
• Update existing casino anti-money laundering laws to include sports wagering operators;
• Provide a process whereby states may compact with each other to permits interstate sports wagering;
• Designate a non-profit National Sports Wagering Clearinghouse to, inter alia, receive and share anonymized sports wagering data and suspicious transaction reports among sports wagering operators, state regulators, sports organizations, and federal and state law enforcement;
• Dedicate revenue from the existing sports wagering excise tax to law enforcement and programs for the prevention and treatment of gambling disorder;

The Sports Wagering Market Integrity Act of 2018 would also update the controversial Wire Act to allow for “certain interstate sports wagers” and add new law enforcement options. Another Act, the Sports Bribery Act, would also be modified to cover blackmail and extortion, to ban “insider betting” (using information that isn’t public to make bets), and to bolster protections for whistleblowers.

Opponents Speak Out

The American Gaming Association isn’t too pleased with the Hatch bill. Sara Slane, the AGA’s senior vice president of public affairs did not mince words, saying, “This bill is the epitome of a solution in search of a problem, representing an unprecedented and inappropriate expansion of federal involvement in the gaming industry, which is currently one of the most strictly regulated in the country.”

She continued, “Additional areas this bill seeks to address – including the mandatory use of official league data and the creation of a national sports wagering clearinghouse – can, and should, be decided by marketplace negotiations between private businesses and cooperative agreements among jurisdictions. In the mere six months since the U.S. Supreme Court paved the way for legal, regulated sports betting, significant developments on both of these fronts have already occurred without any federal involvement.”

As mentioned, Hatch is done as a US senator. He has retired, the legislative session has ended, and the government is in a shut down. Chuck Schumer will return in 2019 as the Senate Minority Leader, but he won’t have a whole lot of power to push an updated version of the bill forward. Odds are, it won’t have a ton of support in the Senate, either, as it flies in the face of states’ rights.

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