SPORTS BETTING

Top U.S. Senators Seek Federal Regulation of Sports Betting

With sports betting threatening to become legal in state after state after state, some top federal legislators are getting nervous. Recently two of the most powerful Senators in the country, Sen. Orrin Hatch (R-Utah) and Sen. Chuck Schumer (D-NY) expressed their desire to regulate sports gambling on the federal level.

The backdrop to this is well known. In May, the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992 (PASPA) – which Hatch himself was integral in constructing – a law that made sports betting illegal in the country. Four states were grandfathered in: Nevada, Oregon, Montana, and Delaware. Nevada was the only one of the four that actually offered traditional, odds-based betting. By overturning PASPA, the Supreme Court opened it up for every state to individually legalize and regulate sports gambling.

New Jersey, Delaware, and Mississippi have already launched their sports betting industries, with Pennsylvania and West Virginia likely to get theirs going this year. Several other states legislatures have begun discussing it or will start talks after the November elections.

Senator Orrin Hatch

For whatever reason, lawmakers like Hatch and Schumer feel regulations are better set on the federal level, even though Nevada has done a perfectly fine job of it for years, and so far, so good in the other states. And though they never think to do the same for online poker, here we are with sports betting because you know, it’s a thing.

Hatch, who will be retiring after his current term, spoke on the Senate floor, saying he will be introducing legislation soon. He started off well enough, saying that though he is opposed to gambling, he is realistic, and because sports betting is popular and can now be legalized in every state, he wants to see regulations passed to ensure consumers are protected as is the old “integrity of the game.”

But then he said that he wants federal legislation passed because he doesn’t want to see state-by-state regulation be a “race to the bottom,” as if that has been happening. There is literally no evidence that states are trying to construct weak regulations.

This past week, Chuck Schumer issued a memo, first provided to ESPN, that offered up his thoughts on what should be included in federal legislation. Schumer seems to want the sports leagues to have more control over the sports betting industry, allowing them to determine what types of bets can be offered and requiring sports books to use official league data.

He also suggested a host of other regulations that everyone has always agreed on, like age restrictions, youth marketing bans, and other systems to monitor suspicious betting activity.

The idea of requiring sports books to use official league data is controversial and is generally disliked by said sports books and virtually anyone else who is not a sports-league executive or a lawmaker pandering to sports-league executives. It is seen as a way for the leagues to profit directly off of sports betting (sports books would almost certainly have to pay for the data) when they are already profiting through increased fan interest in the game. Additionally, it is easy enough for sports books to acquire the data they need – game results and stats – from other sources.

The leagues, of course, love Schumer’s ideas.

“As legalized sports betting spreads across the states, there is a need for consistent, nationwide integrity standards to safeguard the sports millions of fans love,” the NHL, MLB, and PGA Tour said in a joint statement. “We strongly support the legislative framework outlined by Senator Schumer and we encourage Congress to adopt it.”

Not coincidentally, those are the three leagues who have been proponents of an “integrity fee,” in which the sports books pay the leagues a percentage of bets placed. They don’t really ever explain why any fees are needed, though, aside from the generic “protecting the integrity of the game.”

The NFL and NCAA released their own joint statement, echoing the other leagues’ sentiments:

Protecting the integrity of our sports is of paramount importance to the NFL and NCAA. We applaud the leadership demonstrated by Senators (Orrin Hatch, R-Utah) and Schumer in supporting federal legislation to protect the integrity of our games following the Supreme Court decision. Core federal standards are critical to safeguarding the sports we love, the millions of athletes across the country who play these games at all levels and our fans.

The American Gaming Association had the opposite reaction. In a statement following the release of Schumer’s memo, Sara Slane, AGA Senior Vice President of Public Affairs, said:

The casino gaming industry shares Senator Schumer’s goal in preserving the integrity of sporting events and providing consumer protections. Federal oversight of sports betting was an abject failure for 26 years only contributing to a thriving illegal market with no consumer protections and safeguards. New federal mandates are a nonstarter.

The casino industry is working with stakeholders to ensure the proper protections for consumers, and the integrity of bets and sporting contests are included in state policy, universally implemented by all operators in those states, and overseen by effective state and tribal gaming regulators.

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