Federal Action on Sports Betting May Be on the Horizon
A House subcommittee had a landmark hearing on Thursday in regards to traditional sports betting; it heard testimony from several stakeholders, including, but not limited to, the NFL, American Gaming Association, Stop Predatory Gambling, and the Coalition to Stop Online Gambling. Closing remarks made by Chairman Sensenbrenner indicate that it’s very likely that we will soon see federal legislation on sports betting in the United States.
The Opening of the Hearings
Shortly after 10:00 AM ET Thursday morning, Chairman Jim Sensenbrenner (D-Wisconsin) called the meeting of the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigation to order. Of sports betting, he said:
“This subject is extremely important and complex, and development in the last year means it may soon affect the lives of millions of Americans.”
He quoted Justice Samuel Alito’s opinion on the subject:
“The legalization of sports gambling requires an important policy choice.”
He explained his two major goals for looking into federal legislation on sports betting as protecting children and the games the nation loves. He feels that Congress has to make those goals the focus of any laws created by Congress. Shortly afterwards, he surrendered the microphone to Representative Bob Goodlatte (R-Virginia), followed by Representative Jerry Nadler (D-New York).
Following those two speakers, the Chairman swore in the five witnesses: Jocelyn Moore of the NFL, Les Bernal of Stop Predatory Gambling, Sara Slane of the AGA, Jon Bruning of the Coalition to Stop Online Gambling, and Becky Harris of the Nevada Gaming Control Board.
Rep. Goodlatte started off by speaking about the Unlawful Internet Gambling Enforcement Act (UIGEA), with which he was involved in enacting two years ago. He feels that online gambling is more dangerous to society than on-site gambling. He went on to say that the nature of online gambling makes it difficult for individual states to enforce, and also said that the federal government also hasn’t had much success in enforcing UIGEA.
Jocelyn Moore of the National Football League summarized her written testimony, and cautioned the subcommittee that failure of the federal government to craft a legal framework would have the states who legalize sports betting would be in a “regulatory race to the bottom.” She went on to say that,
“While state regulators clearly have an important role post-PASPA, the federal government has primary authority regarding interstate commerce, interstate law enforcement, and international sanctions against corruption and money laundering.”
As National Director of Stop Predatory Gambling, Mr. Bernal is against all gambling in general, and specifically against poorly regulated gambling in the U.S., as well as illegal offshore gambling and betting done with illegal bookies. Of state regulators and lawmakers, he said:
“When it comes to gambling policy here in America, states are laboratories of fraud, exploitation, and budgetary shell games.”
Sara Slane who also summarized her written testimony before the subcommittee, said that states are best-suited to regulate sports betting. She referred to sports betting in Nevada as a case study. She explained how allowing states to regulate their own legislation, she said that the system as it is already works with the regulations laid out by states and tribes.
Jon Bruning, the managing partner of Bruning Law Group, which represents the Coalition to Stop Internet Gambling, took a more reasonable opposition to federal sports betting legislation. He said that he doesn’t have anything against legal online sports betting and focused more on illegal offshore gambling operators. He agreed with Goodlatte’s statement that the UIGEA hasn’t been properly enforced.
Bruning wants the Wire Act to be fixed, but didn’t explain how to do that.
Becky Harris, who is current Chairwoman of the Nevada Gaming Control Board, is potentially the most knowledgable person in the U.S. on sports betting. She explained the current protections that Nevada has in place to protect consumers, to protect the integrity of the game, and to make sure that financial transactions are legal. She agreed with Sara Slane and said that states are the best option when it comes to regulating sports gambling, and that involving the federal government in the mix would just complicate the issue.
Question and Answer Period
The question and answer period following the testimonies of the five witnesses succeeded in further opening dialogue on the pros and cons of federal oversight of the sports betting industry.
The meeting lasted just under 90 minutes. In his closing remarks, the Chairman said,
“I think the one thing that all of you agree on, is that for Congress to do nothing is the worst possible alternative.”
It looks like we will definitely see some kind of federal framework for sports betting, but as to how much the feds will interfere with the states’ rights to craft their own legislation and regulations – that remains to be seen. Furthermore, federal intervention into sports betting could further complicate delicate relationships between states and tribes. This federal inclination to interfere with states on sports betting, has the makings of an epic failure. The scare tactics that various politicians and groups spew to the public is going to cause more damage than good. I don’t expect this matter to come to a peaceful resolution anytime soon.
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