Column: Sports Betting Is InevitableJune 15, 2017
Last month the House Energy and Commerce Committee released a draft of legislation designed to repeal the last vestiges of federal prohibitions on sports betting. If passed, the Gaming Accountability and Modernization Enhancement Act, or “GAME Act,” would give the Federal Trade Commission oversight authority to regulate sports gambling, including online gambling.
The GAME Act would repeal the Professional and Amateur Sports Protection Act of 1992 (PASPA), the federal law that prohibits state-sponsored sports betting in all but four states - Delaware, Oregon, Nevada and Montana – which were grandfathered by PASPA.
In addition to PASPA, two other federal statutes, the Federal Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA), deal with online sports betting. However, each of those statutes deals with the “business” aspects of online sports betting and do not target the individual bettor. Therefore, states – chief among them New Jersey – can and do allow residents to utilize the internet to place a sports bet without circumventing the provisions of UIGEA or the Wire Act.
Rep. Frank Pallone, Jr., D-New Jersey, the ranking member on the Energy and Commerce Committee, is spearheading the GAME Act, which comes as no surprise to anyone who has followed New Jersey’s effort to eliminate the federal ban on sports gambling. The state has been attempting to bring legal, Las Vegas-style sports betting to its ailing casinos and racetracks for more than five years. New Jersey currently has a petition before the Supreme Court requesting review of a decision in a case that challenged PASPA. Other states, including Michigan, New York, Pennsylvania and West Virginia, have introduced sports betting legislation this year in an effort to follow New Jersey’s lead.
Supporters of sports betting include the American Gaming Association (AGA), which represents the gambling industry. The organization is building a coalition to begin lobbying Congress to lift PASPA this year. AGA president and CEO Geoff Freeman has said "President Trump will have sports betting legislation on his desk during his term." However, the day before the GAME Act was unveiled, the United States Solicitor General's office filed a brief recommending that the Supreme Court decline to review the New Jersey case. The Court is expected to decide whether to accept the appeal by the end of June.
In a statement announcing the proposed legislation Pallone said, "Despite the federal gaming laws in place today, Americans are betting up to $400 billion a year on sporting events alone. It's time to recognize that the laws are outdated, and the GAME Act will modernize them by increasing transparency, integrity, and consumer protections."
Whether PASPA is overturned or not, two leagues will soon confront sports gambling head on. The NHL’s Las Vegas Golden Knights will begin play this fall and will be joined by the NFL’s Oakland Raiders in 2020 if construction on a $1.9 billion stadium is completed on time. Not only will bettors be able to place bets at casinos in Sin City, but fans attending the games will be able to legally place bets from their stadium seats using mobile phones, unless the leagues can persuade Nevada gaming officials to change existing policy. A conditional lease for the Raiders prohibits any “Gaming or Gambling” but does not block access to the mobile sports betting apps offered by the majority of Nevada’s regulated sportsbooks.
Gamblers have the ability to place legal sports bets in countries around the world and like it or not, sports betting in the U.S. is inevitable. There’s too much money involved - tax revenue for states and potential income to sports leagues and teams from their piece of the gambling pie - to ignore it any longer.
The only questions that remain are when it will happen, the revenue split to the parties, and what safeguards will be adopted as part of the authorization to bet on sports.