A last Christmas gift from Orrin Hatch to sports betting advocates

Hatch, Schumer Preparing To Drop Federal Sports Betting Bill In Senate

Federal sports betting

Multiple reports Wednesday indicated that Sens. Orrin Hatch (R-UT) and Chuck Schumer (D-NY) will introduce federal sports betting legislation in the Senate.

Legal Sports Report was able to confirm those reports and obtain a copy of the bill as it will be introduced:

Sports betting bill Congress

 

With little time remaining in the current Congress, though, this and any other new bill would need a major push to advance. Hatch, a co-author of PASPA, is retiring at the end of this session and likely intends to push this proposal hard before he departs.

The legislation follows Hatch’s vow to introduce a new bill. It also comes after Schumer proposed a framework in late summer and a House committee held an odd hearing on sports betting in early fall.

What is in the federal sports betting bill?

The bill tracks closely with the discussion draft circulated by Hatch earlier this month in Washington, D.C. As part of their findings, the sponsors include this language in the updated bill:

While each State may decide whether to permit sports wagering and how to regulate sports wagering, there is an important role for Congress to set standards for sports wagering and provide law enforcement with additional authority to target the illegal sports wagering market and bad actors in the growing legal sports wagering market.

Sens. Hatch and Schumer laid out their key goals in a joint announcement also distributed on Wednesday. Among many other things, the Sports Wagering Market Integrity Act of 2018 would:

  • Permit states to authorize online sports wagering to provide a regulated alternative to the illegal, offshore market;
  • Prohibit sports wagers on amateur sporting events except the Olympics and college sports;
  • Establish [a process] to request [to] restrict certain sports wagers when necessary to protect contest integrity;
  • Prohibit sports wagering by individuals younger than 21; athletes, coaches, officials, and others associated with sports organizations; and individuals convicted of certain federal crimes related to sports wagering;
  • Require that sports wagering operators use data provided or licensed by sports organizations to determine the outcome of sports wagers through 2024, and set requirements for data used thereafter;
  • Provide a process whereby states may compact with each other to [permit] interstate sports wagering;
  • Designate a non-profit National Sports Wagering Clearinghouse to, inter alia, receive and share anonymized sports wagering data and suspicious transaction reports among sports wagering operators, state regulators, sports organizations, and federal and state law enforcement;
  • Update the Wire Act to permit certain interstate sports wagers, while also providing additional enforcement authorities such as a state cause of action and a new mechanism for the Department of Justice to target unlicensed, offshore sports wagering websites;

What are its prospects for passage?

From what we hear, the bill does not enjoy significant support despite its bipartisan sponsors. Its expansion of federal oversight does not play well with states-rights proponents in a Republican-controlled Congress. The gaming industry predictably expressed its displeasure as well.

The American Gaming Association (AGA) sent a letter to Schumer in September, stating in part:

“AGA has long been a leading advocate for eliminating the vast illegal sports betting market in the U.S., which was largely enabled by the Professional and Amateur Sports Protection Act (PASPA). We believe this can best be achieved through law enforcement oversight and robust state regulation. AGA firmly believes that additional federal engagement is not warranted at this time.”

The timing of the bill also deserves scrutiny. Only two weeks remain in the current Congress, not including the holiday break. Even moving the bill through committee in that time would be nearly impossible, let alone getting it off the floor of the Senate.

As for next year, keep in mind that Congress will look significantly different after Jan. 3, 2019. Democrats will take over the House of Representatives and Hatch will be retired. Schumer will remain in the minority, with little power to push legislation through his chamber without Republican support.

Lawmakers’ reactions to federal proposal

LSR has received statements from multiple stakeholders, analysts and lawmakers since the bill first emerged on Wednesday.

Here’s Rep. Dina Titus, the US Congresswoman from Nevada:

“This bill undermines Nevada’s expertise and experience in establishing a successful, regulated sports betting market. It would inject uncertainty into an established and regulated industry, weaken Nevada’s ability to promptly adapt to maintain its gold standard, and risk causing bettors and operators to leave the regulated market.

“As I have said before, we should be cautious not to reinvent the wheel or derail what’s working, and I fear this legislation is a step in that direction. I will continue to work to ensure that those in Congress know that gaming is an important Nevada issue, and that our concerns must be taken into account.”

Ray Lesniak also weighed in during a separate conversation. The former Senator from New Jersey acted as a keystone during the construction of the NJ sports betting industry, and he echoed Titus’ disapproval:

“I believe that our Congressional delegation with Sens. [Bob] Menendez and [Cory] Booker would be able to stop any incursions on our sports betting operations. We’ve faced many obstacles. I thought we beat them all. I guess this is just one more we have to overcome.

“We don’t need this aggravation. Our casino industry was on the verge of a knockout and now it’s coming back to life. We don’t need any restrictions on their ability to generate revenues. Cutting that off will do great damage to our state and our casinos. Everybody ought to be aware that New Jersey is not a pushover in anything.”

AGA on Hatch/Schumer bill

The AGA chimed in once again, as well, via a strongly worded statement from executive Sara Slane:

“This bill is the epitome of a solution in search of a problem, representing an unprecedented and inappropriate expansion of federal involvement in the gaming industry, which is currently one of the most strictly regulated in the country.

“Across the country, nearly 4,000 dedicated public servants already regulate all forms of gaming, including sports wagering, with more than $500 million committed to ensuring the integrity of commercial casinos’ operations and $822 million spent on regulation of tribal gaming in 2015 alone. These state and tribal regulators have decades of experience effectively overseeing gaming operations within their jurisdictions.”

Slane also contends that certain provisions in the bill, such as those regarding data and information sharing, are better left to private, commercial negotiations. She does, however, conclude her statement with some commendations:

“While federal regulation of sports betting will continue to be a non-starter for the gaming industry, we appreciate the sponsors’ recognition that more must be done to curb illegal sports betting operations, which continue to pose the biggest impediment to the success of a legal market that will benefit and protect consumers, sports leagues and casino operators alike.”

Adam Candee
- Adam Candee is the managing editor of Legal Sports Report. He covers sports business and news from Las Vegas. Adam is a former editor and reporter at the Las Vegas Sun, Arizona Daily Sun and KLAS-TV. He can be reached at [email protected]
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