Senators Chuck Schumer and Orrin Hatch reportedly will introduce a bill to regulate sports betting with federal legislation.
An early draft obtained by Legal Sports Report indicated that the bill would mandate operators use of official league data, create a national sports wagering clearinghouse to monitor the market in real-time, and permit betting on Olympic and college sports (but no other amateur sports). The draft did not include an integrity fee or other royalties for the sports leagues. LSR indicated that the bill set to be introduced will not deviate too far from the original draft.
Nevada, New Jersey, Delaware, West Virginia, Mississippi, Pennsylvania, and Rhode Island have already legalized sports betting through state laws; one casino in New Mexico has also begun accepting sports bets through a tribal gaming provision.
Schumer is a Democrat from New York and Hatch is a Republican from Utah, so the bill’s bipartisan introduction certainly could improve its chance of passage, although Hatch is retiring and there has been some vocal opposition. The American Gaming Association sent Schumer a letter in September emphasizing the importance of “robust state regulation” and adding, “AGA firmly believes that additional federal engagement is not warranted at this time.”
In response to the proposed bill, Sara Slane, the AGA’s SVP of public affairs, called federal regulation a “non-starter for the gaming industry” and said in a statement:
“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. . . . Additional areas this bill seeks to address—including the mandatory use of official league data and the creation of a national sports wagering clearinghouse—can, and should, be decided by marketplace negotiations between private businesses and cooperative agreements among jurisdictions. In the mere six months since the U.S. Supreme Court paved the way for legal, regulated sports betting, significant developments on both of these fronts have already occurred without any federal involvement.”
The Supreme Court struck down the Professional and Amateur Sports Protection Act in May, opening the door for state-by-state legalization. As Hatch said in a statement on Wednesday, “I began working with stakeholders to ensure we were doing everything possible to protect the integrity of sports from corruption. The legislation we’ve introduced today is the culmination of eight months of high-level meetings, discussions, and negotiations, and will serve as a placeholder for the next Congress, should they decide to continue working to address these issues.”
SportTechie Takeaway
The NBA, the NFL, the NHL, and MLB all prefer a federal framework to sports betting and have said as much, although they also would have been vocal in seeking a share of the betting revenue (whether that is called an integrity fee, royalty, or anything else). The requirement for official data may placate the leagues, although what’s known about the MGM deals with the NBA, the NHL, and MLB is that those are not contingent on how money is actually wagered, limiting the earnings potential of those agreements.
The technology providers seeking to innovate new user experiences for U.S. customers also would prefer a national standard. Some of those companies have privately expressed that creating sports betting platforms is a challenge right now because each product would need up to 50 variations to abide by each state’s laws. The gaming industry’s strong opposition, however, will remain a major impediment to progress on this bill.