Why You Won’t Be Seeing A Federal Framework For US Sports Betting Soon

Written By Dustin Gouker on October 7, 2016 - Last Updated on April 13, 2022
Sports betting framework

[toc]Former NBA Commissioner David Stern has come out as a vocal proponent of legal sports betting in the US, including an appearance at the casino industry’s Global Gaming Expo last week.

What Stern said on sports betting

There, he reiterated his previous calls for legalizing and regulating sports betting, which are in line with the attitude of current commissioner Adam Silver.

However, Stern also said that he wants more than just a repeal of the federal ban on sports betting in the US, aka PASPA. He wants federal oversight of sports betting, should it be legalized.

Stern went so far as to say a simple repeal of PASPA — which the American Gaming Association is pushing for — is not tenable. A PASPA repeal would tacitly leave the issue up to the states as to whether they want to legalize it; Stern said he thinks (paraphrasing) that states regulating sports betting would be a mess.

However, the scenario Stern described — Congress amending PASPA to create a federal framework to oversee sports wagering across the US — is terribly unlikely.

Why is that?

The US government has never had much to do with gambling

To think the federal government is suddenly going to insert itself into the gambling landscape as a major regulatory force ignores much of the history of the United States.

The backstory of gambling in the US is letting states deal with it, outside of a handful of federal laws that limit its scope:

  • The Wire Act, which deals with the transmission of information as it deals with sports betting.
  • The aforementioned Professional and Amateur Sports Protection Act, which bans sports betting in most states.
  • The Unlawful Internet Gambling Enforcement Act, which deals with payment processing as it pertains to online gambling.
  • The Illegal Gambling Business Act, aimed at syndicated crime.

There are a few laws that do regulate gambling on an interstate basis:

The only real gambling legislation we have seen in the past decade even show up in Congress since the 2006 UIGEA has been a bill seeking to increase the scope of the Wire Act.

To think the US government is going to suddenly forget decades of precedent of largely staying out of the gambling business — at least in a direct way — flies in the face of logic.

The framework Stern is asking for would take for some sort of new federal body or commission. And to see such an effort gain traction in the coming years from our current starting position is hard to envision.

The will might be there for a repeal of PASPA, but not more

The idea that Congress could repeal PASPA and let states what decide to do with sports betting is at least a feasible path to legalization.

In addition to taking PASPA off the books — or changing it — the federal framework Stern describes would also require:

  • Taking some of the other laws mentioned above off the books as well; the Wire Act, at a minimum, would likely have to go away.
  • Congress has to start understanding the gambling industry in a much more nuanced way than it does now. Such an understanding was not on display at a Congressional hearing on daily fantasy sports.
  • The major professional sports leagues would actively have to be involved in the process. The NBA and Silver, who are the most bullish on sports betting, have said they would not actively lobby Congress, even for a simple repeal of PASPA.

The NBA and other leagues might just step back and not push back against a repeal of PASPA. But the gap between that possible hands-off approach and calling for a federal framework is a wide chasm.

In the coming decades, could we eventually see national oversight of gambling, like we do in a variety of European and other countries? Sure. But right now the US is decades behind on that front, with little momentum to suggest that’s going to change in the short term.

A federal sports betting law would be ideal, in a perfect world. But it’s the least likely route we have to legal sports betting in the US right now.

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Dustin Gouker

Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.

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