CDC Gaming Reports Inc: Response to proposed federal sports betting oversight: ‘Legislation not necessary’

Dec 5, 2018
In The News

Reaction Tuesday to a proposed federal sports wagering bill – that would require states to seek Department of Justice approval before legalizing sports gaming – was met with a thud.

A 37-page discussion draft of the legislation was circulated for feedback and first uncovered by Legal Sports Report. Among the proposals included states having to submit an application to the U.S. Attorney General before legalizing sports wagering and a ban on betting on amateur events.

The Supreme Court ruled in May that the Professional and Amateur Sports Protection Act was unconstitutional, opening the U.S. to legal sports betting. Six states – Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania and Rhode Island – legalized sports betting at casinos and racetracks. New Mexico allowed an Indian casino to open a sports book. Before the ruling, Nevada had been the only state with full-scale regulated sports betting.

“This draft bill raises serious questions about the treatment of states like Nevada that already successfully regulate sports betting,” Rep. Dina Titus, D-Las Vegas, said of the proposed legislation. “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.”

The Washington D.C.-based American Gaming Association, which supported New Jersey’s years-long court battle to legalize sports betting, opposes the federal government stepping into the mix.

“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, AGA’s vice president of government relations. “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.”

In August, Republican Senator Orrin Hatch of Utah and Senate Minority Leader Chuck Schumer of New York said a few days apart from each other that Congress should come up with a federal framework governing the nation’s growing legal sports betting market.

“I’d like to say upfront that I am not a fan of sports betting,” Hatch said on the Senate floor on August 23. “I have grave concerns about gambling in general, and sports betting in particular.”

Sources said Hatch’s office circulated the draft proposal for suggestions. Hatch is from one of two states without any form of legalized gambling. He is also retiring this year, choosing not to seek re-election.

Schumer is from New York City, home to the major professional sports leagues’ headquarters. Leaders of the NBA and Major League Baseball have expressed a desire for “integrity fees” as compensation for the perceived increase in security because of sports gambling.

“As a New York sports fan … and a senator, my priority … is making sure the integrity of the games we love is preserved, that young people and those suffering from gambling addiction are not taken advantage of, and that consumers that choose to engage in sports betting are appropriately protected,” Schumer said in a statement on Aug. 29.

The draft legislation also moves to amend and clarify the federal Wire Act to allow for some amount of sports betting information to flow across state lines and mandates use of official league data by sports betting operators from sports leagues (or their proxies) through 2022.

The bill also addresses the existing federal excise tax on sports wagering, which taxes handle — not revenue — at a rate of .25 percent. The money would be placed in a “wagering trust fund” for deployment on sports betting matters.