Federal intervention in the regulation of sports betting is unnecessary and unwelcome. That’s the message from Nevada and New Jersey ahead of a Congressional hearing on the subject, scheduled for Thursday.

US Reps. Tom MacArthur (R-New Jersey) and Dina Titus (D-Nevada) wrote to the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigation this week to warn that “a heavy-handed federal framework could repress innovation and competition, sending more people back to the illegal market.”

In May, the US Supreme Court struck down PASPA, the federal law that banned state-sanctioned sports betting, paving the way for state-by-state regulation.

League Demands

SCOTUS ruled that “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”

While there have been mutterings of federal legislation to regulate sports betting – most notably from US Senator Orrin Hatch (R-Utah), one of the architects of PASPA – Thursday’s hearing is more concerned with exploring whether a basic federal framework is necessary to guide states’ new gambling policies.

But states are concerned about the influence the major sports leagues may have on the composition of federal guidelines. The leagues are pushing for a controversial “integrity fee” — a cut of the bets places on their games, which translates as a punitive tax on operators– and they also want to make it mandatory for operators to use their official data exclusively.

Nevada has regulated sports betting since 1949 without any of these conditions and its regulatory framework has been the template for who have rolled out sports betting this year.

New Jersey, meanwhile, spent seven years and millions of dollars fighting the leagues in the courts for its right to offer sports betting and is not prepared to offer them any concessions.

Leave it to the States

“As members from states that have already legalized, regulated, and opened the doors to sports betting, we have seen success of regulation at the state level and feel proposals for a federal framework should be approached with caution,” wrote the two representatives.

“Call for integrity fees paid to leagues would chip away at state revenues and already slim revenue margins for legal sports books, hurting their ability to compete with offshore books and move more consumers into the regulated market,” they added.

Among those invited to testify at Thursday’s hearing is a representative of the NFL, as well as Senior VP of the American Gaming Association Sara Slane. Her organization has stated that “states and sovereign tribal nations — not the federal government — are best positioned to regulate and oversee legal sports betting markets.”