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Does the Federal Government want to oversee Sports Betting?

By now, you probably have some idea of what took place over the last few years that culminated in the repeal of the Professional and Amateur Sports Protection Act of 1992. In a nutshell, the Supreme Court ruled that the Federal government of the United States could not force regulations on States after giving them the rights to manage gaming on an individual basis. PASPA was challenged by the state of New Jersey, and ultimately the SCOTUS agreed that it was a violation of State’s Rights, repealing the Act and allowing for state-regulated sports betting to begin.

Since that decision in late May, there has been a fury of activity in the space, with several states already opening sportsbooks and many more on their way. The appetite for sports betting is clear, and what it is likely to reveal is how large the black market is in the U.S. Now, the Federal government has been threatening to put legislation in place ever since PASPA was repealed, but only this week did we see some movement on the topic.

This week, Senator Orrin Hatch revealed that he will introduce a Sports Betting bill, which is meant to regulate the industry on a federal level. Hatch said in his speech “Parts of the legislation I will be proposing are improvements in monitoring and enforcement that will benefit all stakeholders, sportsbooks, regulators, governing bodies and consumers.” He went on to outline that the bill will be introduced in the coming weeks.

Why does Sen. Hatch have such a passionate take on sports betting in the U.S.? Well, as it turns out, he was one of the original authors of PASPA back in 1992, and this week he reiterated the need for integrity in the sports world. So, it is easy to see how he would want to have something in place to replace the bill that the Supreme Court deemed unconstitutional.

There is already resistance building to any form of Federal legislation on the topic of sports betting. Responding to the speech given by Hatch, Sara Slane, who is the VP of Public Affairs for the American Gaming Association, said “Federal oversight of sports betting was an abject failure, succeeding only in enabling the growth of a massive illegal market. The Supreme Court decision removed this unconstitutional federal overreach, allowing states and sovereign tribal nations — who have proven to be effective regulators of all gaming — to decide what works best for their constituents.” The AGA has long been lobbying to make sports betting legal across the United States, and it is safe to say that they will fight back with a fury to ensure their hard work isn’t all for naught.

Does the industry have a problem?

There have indeed been integrity issues with sports, including professional leagues in the United States. However, these incidents are few and far between, and companies like SportRadar have emerged to be the leaders in detecting any shady behavior in games. Yes, there will still be issues in individual sports like tennis where players can throw matches, but in the age of the internet, it is much harder to do so without being noticed. Add into the fact that many sportsbooks across the U.S. will have low betting limits, and there won’t be as much exposure for any particular match or game.

The leagues themselves have been lobbying for integrity fees to be paid by sports betting operations, and in some states like New York, language is being introduced in bills. Whether or not the leagues see any money from sports betting directly is still to be determined, but the overall effect of regulated gambling on the leagues is likely to be very positive.

While Sen. Hatch does have some concerns about the future of sports betting in the country, it is difficult to believe that he will be able to get any legislation passed. This fall’s session of the Senate is only weeks before the mid-term elections, and it is unlikely to see a vote in that timeframe. Sen. Hatch will not be returning so we will have to wait and see if this bill has any co-authors that will remain on in the Senate to continue the fight.

For the time being, sports gambling lovers need not worry. Many states are planning to launch sportsbooks in the fall, and we will see movement legislatively in more states come the first quarter of 2019. By that time, the horses will be out of the stable, and it is very unlikely that anything will be done to change that.