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

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Sports betting framework

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:

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:

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.