Sports Betting Bills Would Give Leagues Power To Sue Match-Fixers

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Point-shavers beware.

New sports betting bills under consideration in Connecticut and Kansas would give sports leagues the right to sue game-fixers and betting fraudsters.

The new language bestowing a private right of action to sports leagues is the latest twist in the rapidly-changing legislative moves in over a dozen states that are actively considering sports betting.

The new clause also harkens back to an earlier time, when the US Department of Justice found it “particularly troubling” that the Professional and Amateur Sports Protection Act — the law at issue in the pending Supreme Court case — similarly allowed enforcement of its partial betting ban by sports leagues.  

A look at the Connecticut bill

In late March, “Raised Bill No. 540” was introduced in Connecticut’s General Assembly. The proposed law includes the following sentence:

Any individual or entity that is found to have violated subdivision (2) of this subsection shall be liable to the relevant sports governing body and may be sued by such governing body at law or in equity in any court of competent jurisdiction.

The conduct at issue involves anything “intended to influence a betting outcome of a sporting event for purposes of financial gain.”

In contrast, betting “on the basis of material, nonpublic information relating to such wager” does not appear to be covered under the portion of the new Connecticut bill.

What the Kansas bill says

The Kansas bill tracks along the same lines:

A sports governing body shall have a cause of action against any person who knowingly engages in, facilitates or conceals conduct that intends to improperly influence a betting outcome of a sporting event for purposes of financial gain, in connection with betting or wagering on a sporting event.

The proposed Kansas law allows sports leagues to pursue either money damages or equitable remedies, like an injunction. In addition, the clause does not limit any other type of claims sports leagues can bring for “injuries or damages arising out of the operation of sports wagering.”

The Current Federal Sports Bribery Act

For the past 50-plus years, there has been a federal law on the books that addresses similar conduct — the Sports Bribery Act of 1964. Here is its key passage:

Whoever carries into effect, attempts to carry into effect, or conspires with any other person to carry into effect any scheme in commerce to influence, in any way, by bribery any sporting contest, with knowledge that the purpose of such scheme is to influence by bribery that contest, shall be fined under this title, or imprisoned not more than 5 years, or both.

The Sports Bribery Act has been implicated in horse racing, boxing, and college basketball, with the Boston College point-shaving scandal in the 1970’s probably the most prominent example.  

The Sports Bribery Act has even made a few fleeting appearances in the New Jersey sports betting casebut is not under review by the Supreme Court.

The current federal law differs from the draft legislation in Connecticut and Kansas in one important respect — only federal prosecutors can pursue Sports Bribery Act cases. Sports leagues have no right to pursue alleged wrongdoers under the statute.

Existing sports corruption laws in both states

Both Connecticut and Kansas already have laws on the books that overlap — at least in part — with the sports corruption topics in the new bills.

In Connecticut, sports “rigging” is a Class D felony:

A person is guilty of rigging if, with intent to prevent a publicly exhibited sporting or other contest from being conducted in accordance with the rules and usages purporting to govern it, he: (1) Confers or offers or agrees to confer any benefit upon, or threatens any injury to, a participant, official or other person associated with the contest or exhibition; or (2) tampers with any person, animal or thing.

Depending on the severity, sports corruption in Kansas can be either a felony or a misdemeanor.

The Kansas law covers conduct that would cause athletes not to give their “best efforts” or influence referees to perform their duties “improperly.” Athletes or referees who accept benefits from would-be-corruptors are covered under the law too.

Sports leagues do not have the right sue under the current laws in Connecticut or Kansas.

Implications of a private sports corruption enforcement law

The recent bills under review in Connecticut and Kansas have a number of unique provisions.

From so-called “integrity fees” to data sharing requirements that flow from operators to sports leagues, state lawmakers have no shortage of novel clauses to consider among sometimes-competing bills that are moving through various statehouses.  

Whether a private right to sue should be bestowed upon sports leagues adds an extra wrinkle.

The closest any government entity has gotten to looking at the appropriateness of such a clause in the sports betting context likely happened 27 years ago when PASPA was being debated in Congress. At the time, the Department of Justice sent then-Sen. Joe Biden a letter providing the committee with the Justice Department’s views.

“It is particularly troubling that [PASPA] would permit enforcement of its provisions by sports leagues,” wrote Assistant Attorney General W. Lee Rawls in a Sept. 24, 1991 letter obtained by Legal Sports Report.

The Justice Department did not elaborate on its reasoning for its conclusion, however.

Perhaps the void will be filled during debates at upcoming hearings in Connecticut, Kansas, and other states that opt to include similar provisions in related bills.