Sports Betting Stakeholders React to Federal Framework Push

Sports Betting Stakeholders React to Federal Framework Push

Congressional support for federal sports betting regulations has, not surprisingly, sparked disparate reactions from gambling stakeholders.

Represntatives from professional sports leagues as well as the nation's preeminent gambling advocacy group responded shortly after the most substantial push yet for a federal sports betting framework. The divergent responses, with the leagues in favor and gambling group opposed, underscored a central rift in the ongoing discussions about legalized sports betting.

Senate Minority Leader Chuck Schumer outlined several specific pitches as part of a federal regulatory process to have Congress shepherd the existing state-by-state legalization process that has seen no Congressional oversight. In a memo to ESPN, Schumer urged for federal standards on age restrictions, enforcement requirements and data sharing.

Most significantly, the top Senate Democratic said all sports betting providers should be required to use sanctioned league-provided data. This could be a financial boon for the leagues - and an additional expense for gambling providers.

As expected, this elicited vastly different responses.

American Sports Leagues Advocate for Federal Framework

The NBA, MLB and PGA released a statement supporting Schumer Aug. 30 that reiterated a push for a universal framework across all states taking wagers.

"As legalized sports betting spreads across the states, there is a need for consistent, nationwide integrity standards to safeguard the sports millions of fans love. We strongly support the legislative framework outlined by Senator Schumer and we encourage Congress to adopt it."

Those three organizations have spearheaded gambling legislative efforts since even before the Supreme Court struck down the federal ban on sports betting in May of this year. That was not the case even a few years ago.

All major U.S. sports leagues opposed legalized gambling for decades and supported the federal ban, which was known as the Professional and Amateur Sports Protection Act, fearing gambling interests could corrupt the verisimilitude of their competitions. With mobile gaming sparking widespread access to offshore betting, a shifting public attitude and the reality that billions of dollars were already wagered illegally each year, the leagues slowly shifted thier stances.

NBA Commissioner Adam Silver ushered in a watershed moment in 2014 in a New York Times editorial supporting legalized gambling. The NBA, followed by the PGA and MLB, also came out in favor of legalization – and laws that would be to their benefit.

Much of their initial efforts centered around universal hiring practices, enforcement standards and other non-contentious issues with widespread support. That also included what was, more subtly, a push for additional money.

The leagues lobbied state legislatures to include what they called “integrity fees” in their legalization bills. They argued for one percent of all wagers, which they said was necessary to protect the game from corrupt outside influences.

Their effort did work. After years opposing legal betting, lawmakers considered the leagues’ pitch as a disingenuous money grab in the aftermath of the Supreme Court decision. A slice of revenue for the leagues also met less money for gaming operators and, more importantly for legislators, state coffers.

New Jersey, Delaware, Mississippi, West Virginia, Rhode Island, Pennsylvania and New York passed some sort of sports betting legalization bill in the past 12 months. Along with Nevada, which had sports betting for decades and was exempt from the federal ban, these states have refused to allocate any funds for the leagues.

With little success at a state level, the leagues have now refocused their efforts on Capitol Hill. Congressional support for exclusive league-supplied sports betting data could provide a major new revue stream.

Not every gambling stakeholder is as excited about that development.

American Gaming Association Spearheads Opposition

The American Gaming Association issued a terse retort hours after Schumer released his statement.

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.

The largest national trade group representing gambling interests in the U.S., the AGA statement went on to say industry stakeholders and state-level officials were already sufficiently protecting the “integrity” of sporting events. After years advocating against federal involvement, the AGA again argued sports betting decisions should be left to the state governments and gaming regulators.

They’re view is not unique- even among some sport league officials. NBA owner Ted Leonsis said the “integrity” push was superfluous, as sporting events had been conducted for decades with minimal scandal. He, like even casual observers, realize fans have bet on sports for nearly as long as games have been played. More widespread, legalized betting won’t suddenly spur them to malfeasance.

Integrity fees may still be the chief concern for groups like the AGA, but it may not materialize at a federal level. Schumer didn’t mention anything of that nature in his memo, plus state legislators would not be inclined to support retroactively adding such fees into already existing legislation.

Still, ample questions remain about a federal legislative push – with or without integrity fees.

Framework Discussed – But Far From Finalized

Schumer’s federal framework pitch is the most substantial yet in Congress. Republican Senate President Pro Tempore Orrin Hatch said he would introduce a federal sports betting bill shortly after the Supreme Court ruling announcement and reaffirmed that plan on the Senate floor last week, but has offered little details.

The latest developments have garnered widespread attention as the most substantial yet. It's also an increasingly rate proposition with support from influential members of both parties. That doesn’t mean federal legislation is a sure bet.

Sports betting is still not a priority for many elected officials or their constituents. Many are hesitant to open up positions on another topic ahead of the November mid-term elections, when one-third of the Senate and the entirety of the House of Representatives will be up for re-election. No bill has been introduced in either chamber, and even an expository hearing scheduled for the House Judiciary Committee in June was postponed. No makeup date has been announced yet.

Despite the long odds of any sports betting bill, the rapid responses from both proponents and detractors highlights the significance any action from Congress can have on the gambling industry as a whole. With support from key lawmakers already, sports betting will undoubtedly remain a topic of discussion in Congress for the not-too-distant future.