Rep. Ben Smaltz doubts the black market, questions consumer protections

Why A Lawmaker Is Trying To Keep Legal Online Sports Betting Out Of Indiana

Indiana stopping online sports betting 2019

Mobile wagering in Indiana sports betting ran into one opponent in a high place.

House Public Policy Committee Chairman Ben Smaltz explained to Legal Sports Report why he insisted on the online aspect’s removal from S 552 before advancing the bill through his committee last week.

“I think having it available everywhere within the four walls of the state is a problem, and I think consumer protections are a problem,” Smaltz said. “I don’t know why we wouldn’t have all casino games allowed to be played on a device if we are going to allow sports wagering on that device.”

Smaltz rejects universal calls for mobile sports wagering at hearing

Even though many stakeholders at the committee hearing held a week before the vote made the argument that mobile wagering was needed for the regulated market to capture the current black market, Smaltz didn’t see the connection.

Smaltz claimed that a black market also would have other advantages that would keep people from moving to a regulated market, such as betting on credit or not having the same age requirements or background checks.

“Someone could start an account on a mobile device and then sell it to anyone. If I have a cloned phone account set up to the game, it can circumvent age requirements. I think there are many problems with mobile gaming that should not be summarily dismissed.”

Finally, he questioned the size of the black market.

“Just the definition of a black market means that there isn’t any real data showing its size,” Smaltz said. “How do you know? We don’t know if it’s a big problem or a little problem. Trying to solve it by creating mobile sports wagering seems dubious to me.”

Official league data gets the ax in Indiana

The committee did improve the sports betting portion of the bill by removing a requirement to use official league data for in-game wagering, which was a hotly contested point at the hearing between stakeholders and league representatives.

“We don’t normally require single sourcing for any good service information,” Smaltz said. “If you can only get it from one source, how do you responsibly charge for that? It seems like that’s unreasonable and nobody is doing it.”

Other changes made on Indiana sports betting

In addition to sports betting, the bill passed by the Senate includes the movement off the water of two riverboat casinos in Gary and moves up the time frame for racinos to get table games.

The committee made significant changes in those areas:

  • Added a $100 million fee for Spectacle Entertainment to move its casino off the riverfront to a new property within Gary.
  • Removed the “hold harmless” provisions and tax improvements to handle concerns of other casinos in the state over how the casino movement could disrupt the industry.
  • Moves up the date for racinos to get table games from March of 2021 to January of 2020, rather than July of 2019.

Smaltz defended the $100 million fee.

“That’s the value of it,” Smaltz said of the move. “The current location isn’t nice. The owners will tell you that. The permits they have now paid for that specific location. Where they want to move, we can see a value increase of casino operations anywhere between $300 and $700 million.”

Next steps for Indiana sports betting legislation

The bill is currently in the Ways and Means Committee, from where it needs to advance to the House floor by April 9.

“Prior to us amending the bill, I don’t think it would have passed committee,” Smaltz said. “After amending, it had a unanimous vote. That bodes well for it.”

Sources close to the process told LSR that there will be an effort to put mobile sports wagering back into the bill. Smaltz warned that he will continue to fight against such an effort.

“I’ll certainly keep talking about it,” Smaltz said. “There’s people who want to be on the other side. It will be an active issue.”

Matthew Kredell
- Matthew began writing about legislative efforts to regulate online poker in 2007 after UIGEA interfered with his hobby of playing small-stakes online poker while working as a sportswriter at the Los Angeles Daily News. Covering the topic for Bluff Magazine, PokerNews and now Online Poker Report, he has interviewed four U.S. Congressmen and 20+ state legislators. His poker writing has been cited by The Atlantic, Politico.com and CNN.com. A freelance writer based in Los Angeles, Matt has written on a variety of topics for Playboy Magazine, Men's Journal, Los Angeles magazine, LA Weekly and ESPN.com.
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