U.S. Rep. Frank Pallone Jr. of New Jersey announced on Friday that his congressional committee plans to review the federal sports betting laws and introduce new legislation to cover daily fantasy sports.
Rep. Pallone mentioned his plans in a statement to David Purdum of ESPN's Chalk blog, which covers gambling.
Frank Pallone Jr. described the federal gambling laws as "obsolete" and "in desperate need of updating". Pallone likely was referring to the 24-year old Professional and Amateur Sports Protection Act, which was passed in 1992 with the urging of the American pro sports leagues.
The PASPA bans sports betting in 46 states, stipulates sports lotteries in 3 other states, and only allows full sportsbooks in Nevada.
Gaming Laws Need a Wholesale Review
New Jersey's representative told Purdum, "The laws need a wholesale review to see how they can actually work together and create a fairer playing field for all types of gambling, both online and offline, including sports betting and daily fantasy sports."
Frank Pallone is the ranking Democrat in the House Energy and Commerce Committee, which oversees the commercial aspects of gambling.
Pallone went on to say of the 1992 PASPA law, "At the same time, we must ensure the laws are actually creating an environment of integrity and accountability, and include strong consumer protections. I plan to continue discussions with the key stakeholders and then will introduce comprehensive legislation to finally update these outdated laws."
May 2016 Hearing on DFS
The Commerce Committee held a hearing in May 2016 on the subject. U.S. Rep. Jan Schakowsky, a member of that committee, said at the hearing, "Daily fantasy, at its core, involves betting on sports." Many disagree with that statement, because they believe DFS is a game of skill."
Frank Pallone suggests that argument hardly matters. He believe all sports gaming should be legal, even that which involves staking money. Like other advocates of daily fantasy sports (and sports betting), Pallone thinks the time to change America's sports betting laws is imminent. First comes daily fantasy sports.
Changing Social Norms in America
Since the PASPA was enacted, American gambling has changed in many ways. As late as 1989, casinos existed only in Nevada and New Jersey. A 1986 US Supreme Court ruling involving Native American sovereignty rights allow tribal gaming to begin, but few tribal casinos existed in 1992.
In the year 2016, over 300 tribal casinos are located in dozens of US states. Private casinos followed the path of the Native American gaming interests, so many US states allow both forms of casino gambling. Even those which do not have full casinos often allow casino-style gambling in racetracks, creating many racinos.
The Changes Wrought by Lotteries
Meanwhile, state lotteries have proliferated and multistate lottery associations have grown to include 45 US states. The lotto tickets and scratch-offs are an everyday part of millions upon millions of American lives.
This means that Americans are used to gambling in their near-vicinity much more than they were in 1992. The American attitude to gambling has changed, so the idea of special laws to uphold the integrity of sports seems to have less weight.
Online and Mobile Sports Betting
Technological advances have changed attitudes towards sports betting, too. The advent of the Internet meant that every American home had home access to casino gambling, including sports betting. The invention of smartphones and tablet computers meant those same US gamblers could take their gaming habits outside the home, so long as they had a Wi-Fi plan. Once again, mobile bookmakers and in-play betting make sports betting seem like an everyday occurrence. A federal ban on sports betting seems impossible to enforce, as 97% of all sports betting in the United States is made through unregulated sportsbooks and bookies.
Then there is daily fantasy sports. State attorney generals and legislatures have rendered their opinions on DFS gaming, which some see as illegal gambling, others see as legal sports betting, and still others see as legal non-gambling games. Because a successful daily fantasy sports owner stakes money on the outcome of a game which has resource allocation on many moving parts -- up to 10 players in as many as 10 different sports contests -- advocates argue that DFS gaming is a game of skill.
Whatever the case, average US citizens find many ways to gamble or engage in gaming, either online, in a nearby casino, or at the convenience store. The idea the federal government is protecting people from sports betting seems quaint.
Daniel Wallach on Federal Gaming Laws
Daniel Wallach, a sports gaming lawyer from Miami, said that Frank Pallone's committee is a good place to start. Wallach said, "Every initiative has to start from the beginning, and there’s no better place than the ranking Democrat on the committee."
Wallach, like NBA commissioner Adam Silver and ex-commissioner David Stern, believes sports betting is going to be legal at the federal level in a matter of years. Wallach gave similar statistics to David Stern, who recently made predictions at the 2016 Global Gaming Expo. Wallach said, "Best-case scenario: one to three years. Outer limit: three to five years. In 10 years, there’s going to be legal sports gambling. You’ll be able to bet on games inside the arena using mobile phones. But without the stakeholders involved, nothing meaningful will happen."
