US Congress Hears Sports Betting Testimony
In the middle of May 2018, the United States Supreme Court decided to overturn the 1992 Professional and Amateur Sports Protection Act (PASPA) in the case of Murphy (New Jersey Governor Phil Murphy) versus the National Collegiate Athletic Association. It was a landmark case for gambling and sports in America, one that gave each individual state the authority to legalize and regulate sports betting per the wishes of their constituents and lawmakers.
The ruling was significant for many reasons. Not only was it a rare lopsided ruling of 7-2, it was the key to opening an industry that had long been dominated by Nevada, and it forced sports organizations to deal with the new age of gambling.
Congress, however, was a bit taken aback by the US Supreme Court decision. Several members immediately proposed action in the form of federal regulations to oversee a national framework for sports betting, though many states – starting with New Jersey – were already in the process of establishing their own laws to regulate the activity within their borders.
This created a classic situation in American politics. Should states be allowed to regulate sports betting per the wishes of their constituents? Or does the federal government have a duty or the mandate to set national standards for the industry?
LIVE HEARING @ 10:00AM We will be examining Sports Betting in America. We will hear from the @NFL @AmerGamingAssn and more. Watch it live and get the full witness list here: https://t.co/u3XtkKTqJC pic.twitter.com/yasI12iSnq
— House Judiciary GOP (@JudiciaryGOP) September 27, 2018
The initial concerns from Congress came from both sides of the political aisle.
Republican Senator Orrin Hatch went so far as to deliver a speech to the Senate that hinted at a bill that would include an oversight and enforcement framework. He discussed “grave concerns about gambling in general and sports betting in particular.” He continued, “I firmly believe that we need a set of fundamental federal standards that will protect the integrity of the games, that will protect consumers and the sports wagering market.”
Meanwhile, Senate Minority Leader Chuck Schumer also suggested that the federal government play a role in determining the way the industry should operate. One of his primary considerations seemed to be the involvement of sports leagues in determining the data and bets used. “With the Supreme Court’s ruling, it’s incumbent on the federal government to take a leadership role and provide the necessary guidance to prevent uncertainty and confusion for the leagues, state governments, consumers and fans alike,” he said, according to ESPN.
States Already in Action
Three states were ready to implement their pre-established sports betting structures as soon as the Supreme Court decision came in May. New Jersey, Delaware, and Mississippi were the first to launch their new revenue streams, and Pennsylvania and West Virginia were close behind with their preparations to begin sports betting as soon as possible.
Numerous other states have sports betting on their legislative agendas for later this year or early in 2019. States like Illinois, Iowa, Kansas, Kentucky, Ohio, and Indiana have a great deal of support among each set of lawmakers. It is only a matter of months before more states not only legalize sports betting but prepare to launch.
Enter the AGA
The American Gaming Association has been in front of the sports betting issue for years and most prominently since the Supreme Court decision. The lobbying group represents the US casino industry and many associated with it.
Thank you to the House Judiciary Committee for the opportunity yesterday to provide AGA’s perspective on why states and sovereign tribal nations – not the federal government – are best positioned to regulate and oversee legal #sportsbetting markets. https://t.co/2S4VobWFsc
— Sara Slane (@Sara_Slane) September 28, 2018
AGA Senior Vice President of Public Affairs Sara Slane was one of the first to respond to Schumer and denounce the plan for federal regulations. “The casino gaming industry shares Senator Schumer’s goal in preserving the integrity of sporting events and providing consumer protections,” she wrote. “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.”
And when the US House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations held a hearing on September 27, the AGA was present and provided testimony. Essentially, Slane advocated for commercial and tribal casino operators to dictate the framework for sports betting in America on a statewide level. She noted that the 50-plus years of legal sports betting in Nevada gives other states a template from which to devise their own systems that will work best for each.
“Just as Congress has refrained from regulating lotteries, slot machines, table games and other gambling products,” Slane testified, “it should leave sports betting oversight to the states and tribes that are closest to the market.” She noted that too much oversight will complicate a system that has already proven successful in Nevada.
Despite such testimony, though, many industry experts saw that the committee members still feel that the federal government should play a role in setting standards. Committee Chairman and US Representative Jim Sensenbrenner of Wisconsin summarized that “this means we have some work to do.” He added, “I’m looking forward to working with you to try to come up with something both short-term and something more permanent to deal with this issue because I’m afraid if we don’t, there are going to be some people who get hurt and get hurt very badly.”
Rep. Sensenbrenner ends #sportsbetting hearing noting that the "worst possible outcome" would be for Congress to do nothing. I mean, you tried that for 25 years so, why not just keep on doing nothing.
— michelleminton (@michelleminton) September 27, 2018
Online Gaming May Be Next
The connection to online poker and other forms of internet gaming is not lost. Should the federal government decide to regulate sports betting instead of leaving the majority of the action to the states, there could be a movement to do the same for online gaming.
Online poker is now live in three states – Delaware, Nevada, and New Jersey – and will launch in Pennsylvania early next year. Other states like Illinois and Michigan still have online poker and gaming bills under consideration this year, and others like New York have some momentum to pass their own proposals in 2019. If the federal government steps in, state regulators could be undermined, but the worst-case scenario is that Congress could pass a form of the Restoration of America’s Wire Act that could ban online gaming.
It is unknown how the sports betting conversation will ultimately affect online poker, but it behooves the industry to watch developments carefully.