New Federal Sports Betting Guidelines Proposal Faces Backlash

Washington DC Capitol dome detail with waving American flag

Opposition has emerged to a bill introduced into the US Senate that would make the federal government the chief regulator of sports betting across the country.

The bill is co-sponsored by Democrat Charles Schumer of New York and the outgoing Republican from Utah, Orrin Hatch. Introduced on December 19, it is titled the Sports Wagering Market Integrity Act of 2018.

The bill would give the Justice Department the authority to set minimum standards for states that legalize sports betting.

Background to this bill

Senator Hatch has long been an outspoken critic of sports betting. He was one of the original supporters of the federal ban that came into effect in 1992 but was struck down by the Supreme Court in May. He is retiring after the current session, and this will be the last bill that he sponsors. Schumer has also actively been rallying against sports betting since it became legal.

Eight states have legalized sports betting, and many more are likely to join them in the near future. Currently, it is up to each state to regulate sports betting within its own boundaries. This includes everything from licenses to tax rates and all of the other miscellaneous details.

A federal framework would change a lot of this and could very well stifle a sector that is starting to take off.

Details about this bill

Under this new bill, even the eight states that have legal sports betting would need to have their laws evaluated by the Justice Department. They would still be able to offer sports betting until a decision is made.

While integrity fees are not included, sportsbook operators would be required to utilize the data given to them from the major sports leagues. This would be unpopular with many operators because it will further erode their already slim margins.

The bill would prohibit bets on amateur events, except for college sports and the Olympics and would establish a minimum age of 21 for placing sports bets. Athletes, officials, and coaches would not be allowed to place bets.

A National Sports Wagering Clearinghouse would be created to monitor all sports bets to identify any suspicious patterns or activities. The bill would also update the Wire Act to allow for interstate sports bets.

Is there a chance of passage?

While it does have sponsors from both sides of the political spectrum, this does not appear to be a very popular bill. Most Republicans, who now control Congress, will not like having state rights inhibited in this way.

The American Gaming Association (AGA) is steadfastly against the bill. Sara Slane, the AGA’s senior vice-president of public affairs, said: “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 went on to note some key figures about the industry. She mentioned that 4,000 public sector workers are already working on gaming regulation. Slane also spoke of the $500m (£395m) that is being spent on ensuring integrity in the gambling sector and the $822m (£649m) spent on the regulation of tribal gaming.

She went on to talk about how the leagues and the operators are making good progress in their direct communications about the licensing of data. They do not need a third party to negotiate on their behalf, she said. Slade went on to say that she does accept that further moves need to be made to curtail the black market for illegal sports betting. In her eyes, this is the biggest problem the legal sports betting sector is facing.

Another opposition group is Consumer Action for a Strong Economy (CASE), which is an advocacy body for consumer rights. CASE believes that such a bill would be overkill and completely unnecessary.