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State of the Union: US Sports Betting Update – Federal Framework for Sports Betting Unveiled by Retiring Senator

Congress could seize control of the burgeoning US sports betting industry if a draft bill tabled by Utah Senator Orrin Hatch passes into law. Hatch is the longest serving Republican Senator in history and he is about to retire from office at the age of 84. But he is a long-term opponent of gambling and his leaving present could be a law that wrests control of the sports wagering industry away from individual states. Yet it is likely to be met with fierce opposition from trade bodies, state legislators and sportsbooks that are desperate to retain control of their own destinies.

Supreme Court

The bill comes six months after the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992, a federal ban on sports wagering. Since then Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania and Rhode Island have joined Nevada in rolling out regulated sportsbooks, while New Mexico now has a sportsbook on tribal land. States like Nevada and New Jersey will do their utmost to resist a federal legislative framework for sports betting, arguing that they are perfectly capable of catering to their residents’ betting needs.

Dina Titus, Congresswoman for Nevada, said: “This draft bill raises serious questions about the treatment of states like Nevada that already successfully regulate sports betting. The Supreme Court’s decision overturning PASPA was not an invitation for the federal government to repress states that have led the way. I’ll continue to fight for Nevada’s best interests in these discussions.” But the 37-page draft legislation put forward by Hatch shows that Congress is taking a keen interest in the industry. His vision includes a sweeping reform of sports betting in the US. The bill would require the US Attorney General’s office to approved sports wagering regulations in any state that wants to roll out a legal industry. It is unclear how it would affect the states already operating sportsbooks. The bill also seeks to force operators to use official league data to settle bets until at least 2023 and to create a framework for authorities to clamp down on unlicensed operators, both in America and overseas.

Hatch’s bill would amend the Wire Act of 1961, allowing sportsbooks to lay off bets to other states, while extending the Sports Bribery Act of 1964 to cover extortion and blackmail. Finally, it calls for a National Sports Wagering Clearinghouse to be created, and that body would scan betting data in real time in search of corruption and any unusual betting patterns. Hatch was a big supporter of PASPA when it was passed in 1992 and he has been outspoken about the need for federal legislation since it was overturned. “I’d like to say upfront that I am not a fan of sports betting,” he told the Senate in August. “I have grave concerns about gambling in general, and sports betting in particular.”

Proposed Bill Too Similar to PASPA

However, he will step down in December and industry insiders hope his bill will sink before it gains any traction on Capitol Hill. “Since the Supreme Court’s ruling in May, the American Gaming Association has consistently maintained that federal legislation regarding sports betting is not necessary,” said Chris Cylke, vice president of government relations for the American Gaming Association, in a statement. “That underlying position remains unchanged. At the same time, we remain committed to maintaining an open and constructive dialogue with policymakers considering sports betting legislation at any level of government.”

Baruch College professor Marc Edelman believes the bill might flop as it is too similar to PASPA, which was overturned when the Supreme Court decided it was unconstitutional. “The new proposed bill could give rise to the very same commandeering issues,” he said. “The new proposed law, at least as explained, is nearly identical, with the exception for scenarios in which the federal government specifically likes the new law. Indeed, the gravamen of the new proposed law is very much the same in terms of the federal government usurping the states’ independent authority.”

Congress

He added on Twitter that the bill is politically unsound and legally suspect, but the creature of a very powerful lobbying group that often gets what it wants. He also claims that mandated purchasing of data from the leagues would amount to paying them the dreaded “integrity fees” by stealth. Operators and states have resisted paying leagues a royalty fee, as they are not required to do any work, they take no risk and they would seriously erode profits in the low margin business of sports wagering. But Daniel Wallach, a Florida-based gaming law attorney, believes Hatch’s bill could circumvent any being treated like PASPA. “By setting forth federal standards for the state regulation of sports betting, the draft bill from Senator Hatch avoids the commandeering problem,” he said, citing a 2000 case called Reno v. Condon to back him up. “For example, states must adhere to federal standards when implementing food stamp programs. The USAG veto power over state sports betting legislation in the Hatch bill is not an unfettered right. The AG must approve the application unless the AG determines that the proposed State sports wagering program does not meet the standards set forth in section 103. Remember, [the Supreme Court] said that feds are free to regulate, but if they don’t, they can’t stop states from doing so. But, here, feds would regulate.”

Mitt Romney to Replace Hatch This Month

It is worth noting that passing any federal legislation is a long and arduous process, and that Hatch will not be around to see it through as Mitt Romney is replacing him this month. Hatch is a key anti-gambling lobbyist, but there is no obvious candidate to pick up his cause when he is gone. Senate minority leader Chuck Schumer called for federal sports betting regulations from Congress, but he has not yet announced a bill to that effect. He is a New York representative and the Empire State is pushing for a regulated sports betting industry of its own in 2019.

Empire State

If Hatch’s bill makes it to the Senate committee next year, it will face a new set of officials as the Democrats are taking over the Lower House of Congress and they have not given any indication that they will endorse a comprehensive overhaul of the flourishing sports betting trade. It will be fascinating to see how this issue develops, as the bill needs a lot of modification, but right now the odds on it passing into legislation look slim if the states and tribes oppose it vociferously.


Author: Kristian

Kristian heads up the content and SEO team at Digital Fuel having worked in digital marketing for ten years. He’s as passionate about creative content as he is about Brighton & Hove Albion FC and when he’s not following football he’s writing about Brighton’s bustling pub scene

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