Will Congress retake control of sports betting on a federal level?

Twenty seven years ago, Congress passed the PASPA Professional and Amateur Sport Protection Act. After more than 2 decades, in 2018, the U.S. Supreme Court ruled that the Act was unconstitutional.  By overturning PASPA, SCOTUS opened the door for each individual state to legislate Vegas casino online sports betting for its own jurisdiction.

Today, a little more than one year after the overturn of PASPA, the majority of U.S. states have either passed sports betting laws or have sports betting legislation pending. The laws vary widely – some states allow sports betting only via existing brick-and-mortar casinos that already do business in the state while others are giving new operators the chance to operate sportsbooks.  Online sports betting is legal in some states but not in others.  The tax rates on sports betting vary widely as well from one state to the next. 

Many members of Congress were unhappy to see PASPA overturned.  They believe that PASPA was a critical tool that allowed sports organizers  to maintain integrity for sporting events.  The leagues, which had lobbied strenuously against allowing sports betting in the United States, were also dismayed to see states given the freedom to legislate sports betting.

Now, many observers are watching Congress closely. There has been talk of returning some measure of federal control over sports betting in the United and last year Congress even held preliminary hearings.  The issue has faded from the public eye for the meantime but many observers believe that Congress will, in fact, try to regain a measure of control in the not-too-distant future.

Integrity

Most people believe that sports betting will become legal in most states within the next five years. Opponents of expanded sports betting often cite the issue of sports integrity as one of the major reasons that betting on sporting events shouldn't be allowed. They believe that athletes and support staff could be compromised by the public's easy access to wagering opportunities.

Athletes could throw games.  Referees and coaches could make internal information, such as information about a star athlete's injuries, available to those who pay for that type of data. League officials could also be persuaded to sell pertinent data, giving some bettors an unfair advantage. 

All of these reasons make it clear, according to a number of  Congressional representatives, professionals in the sporting world and  sports enthusiasts, that federal oversight is obligatory.  Others aren't so sure. 

Views

Naimia Stevenson, Associate general council for the NCAA, says that the NCAA believes, that federal legislation should require betting operators to work with the leagues. This is a position that many high-level league officials are taking since they would like to see the operators be required to give the leagues a percentage of their profits. 

This view has been expressed by the NBA's general council Clarence Nesbitt who said that he expects that any Congressional legislation would take into account  better protection of players' rights. He is also concerned with instituting more stringent controls that would prevent illegal operators and criminals from taking a piece of the pie.

The Congressional hearings that were held in 2018 on the subject reviewed these issues but, as of now, no conclusions or preliminary legislation was forthcoming from those early hearings. 

Sports Wagering Market Integrity Act

The likelihood that Congress and the federal government will indeed step in increased when Senators Orrin Hatch and Charles Schumer agreed to jointly sponsor the Sports Wagering Market Integrity Act. The Act was introduced in December of 2018. If passed, a good percentage of the control over sports betting which is now in the hands of the states will be put back under the auspices of the federal government. The bill includes:

  • Minimum standards for sports betting to be set by the Justice Department.  All states offering legalized sports betting would be obligated to meet those standards.
  • A requirement that sportsbook operators  use data provided or licensed by the leagues.
  • Options for states to give the sports leagues a cut of their gambling revenue.
  • Institutions of programs, made available through  funds generated by taxes on sports betting, that will provide treatment for those with gambling problems.

Feedback

State officials, sportsbook operators and pubic observers are in agreement with three of those standards but at least one of these provisions will almost certainly be resisted: the requirement for sportsbook operators to use the leagues' official data.

Analysts note that courts have already ruled that fantasy sports operators don't need to follow these requirements. In addition, some of the leagues including the MLB (Major League Baseball) and the NBA have already inked private agreements with certain casino operators regarding the use of their data, specifically for wagers made on games in progress.

However, according to Schumer, the bill is necessary if Congress is to fulfill its responsibilities “to ensure that the integrity of the games we love was never compromised.” Schumer also believes that “the time is now to establish a strong national integrity standard for sports betting that will protect consumers and the games themselves from corruption.”

Hatch also defends the bill as  “the culmination of eight months of high-level meetings, discussions and negotiations.” This is not a hastily drawn-up bill, Hatch said.  Rather it shows “bipartisan support for federal regulation." 

Sports Leagues 

The major sports leagues seem happy with the proposed bill. The NFL has expressed support for the bill. NFL executive Jocelyn Moore released a statement that read: “Without continued federal guidance and oversight, we are very concerned that sports leagues and state governments alone will not be able to fully protect the integrity of sporting contests.

The MLB also released a statement that pointed to their interests in maintaining the integrity of the games. “Legalized sports betting is rapidly spreading across the country, creating a clear need for a set of consistent, nationwide integrity standards to protect the sport that millions of Americans love.”

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