The running tally for sports betting bills is now… well, several dozen. It’s getting hard to keep an exact count with multiple bills introduced nearly every week. A decision in the NJ sports betting case is drawing imminent, and preparations are decidedly underway.
Legislation on the topic follows a few different paths, but every bill can be lumped into one of two groups: Those that follow the leagues’ preferred model and those that do not. The NBA and MLB have maintained that their blueprint is the only one they’ll support as the basis for legislation.
That was the unwavering stance until recently, at least. A new compromise bill has popped up in at least three states, though, and the NBA seems willing to listen. Active bills in New York, Kansas, and Connecticut now contain a set of modified concessions.
What’s new in this bill?
Here are the noteworthy deviations from the league model:
- Bets are separated into two tiers, with the leagues given exclusive data rights only for “tier two” wagers, or ones beyond simple outcomes.
- The “integrity fee“ payable to the leagues is reduced from one percent to .25 percent of handle, down from one percent.
- Sports leagues can request betting restrictions but do not have the authority to dictate
Connecticut’s new bill (S 540) was introduced by Senate Finance Revenue and Bonding on Wednesday and is scheduled for a public hearing next Monday. Kansas and New York have already held such hearings (and so has Connecticut, on other bills).
All three states have competing bills on file, as well.
Where did this come from?
The language included in these bills first appeared in New York.
Earlier this month, Sen. John Bonacic introduced S 7900, providing the first glimpse at this new category. Bonacic chairs the Senate Racing Gaming and Wagering Committee, which quickly advanced the bill. Further action is pending.
A couple weeks later, S 455 appeared in Kansas from Senate Federal and State Affairs. That committee held a hearing on Tuesday, and NBA assistant general counsel Dan Spillane testified (mostly) in support.
This is from his verbal testimony:
It’s not where we started. We had some proposals that differ from what’s included in the bill right now. If we were drafting it ourselves, we’d do some of these things a little bit differently. And there are a few issues which we plan to iron out, and some adjustments to be made on certain aspects of the bill.
But we do think that this represents a lot of work, a good balance of all the various competing interests that went into this. And again, we are supportive of the general framework that’s reflected here.
Spillane’s comments indicate that the league did not author this version in its entirety, which makes it unclear where or how it originated. It does seem like they had some influence, or at least input.
It certainly didn’t come from operators. Here’s what Seth Young of Foxwoods had to say when he saw the new Connecticut proposal:
The new CT sports betting bill is the opposite of everything I testified about last week.
I'll be testifying again on Monday, where I continue to hope that actual fact and common sense will prevail.
— Seth Young (@sethyoung) March 28, 2018
In related news, the NBA and MLB have retained lobbyists in each of these three states (among several others). They currently spend more than $40,000 per month to lobby in New York alone.
What the leagues like
Despite containing some concessions, the compromise model does acknowledge the leagues’ position. It still includes the requisite consumer protections, provisions for mobile and internet wagering, and information-sharing clauses. It also allows them to collect a fee, enjoy partial data exclusivity, and influence the available bet types.
Spillane testified that the NBA believes the elements it’s seeking are present in S 455.
Rep. Vic Miller double-checked with him, specifically as it related to the integrity fee: “You made a case for compensation; is .25 percent adequate compensation?”
Spillane has argued for a one percent fee on several occasions, and he contended that he could do so once again. But he didn’t. “In the spirit of compromise here in the state of Kansas, we’re supportive of the framework and we’re accepting that element,” he said.
He also indicated that the league would reconsider the fee entirely if operators could show it to be untenable.
Compromise or last-ditch effort?
It is no surprise to see a series of bills emerge that try to meet in the middle. The job of lawmakers, after all, is to balance the needs of stakeholders and the general public. It’s just not clear if this is a willing compromise from the leagues or even something that commercial casinos would accept.
The league model is on file in several states, and their lawyers have faced significant pushback during testimony in each. And they’ve done a good job with it; Spillane is adept at fighting the good fight. Considering the disagreements on the specifics, he has been well-received in each state.
The leagues aren’t making significant inroads — at least publicly. West Virginia heard testimony from them before passing a law that dismissed their requests. And Pennsylvania sports betting became law before there was even a chance to lobby. Of the dozens of bills on file, only a handful follow the leagues’ model.
Even in Kansas, where this compromise bill was just filed — an even newer bill was introduced on Wednesday that reverts back to the state-centric model.
All of that being said, there is evidence of some limited progress.
Connecticut is a good example. Next week’s hearing won’t be the first on the topic, and state lawmakers have been quotably opposed to the leagues so far. The smart money appears be on Connecticut sports betting moving forward without league input. But now this compromise bill has appeared, and it’s up for a hearing.