Who will referee $1B sports betting industry?

Now that the U.S. Supreme Court has cleared the way for states to legalize sports betting, the race is on to see who will referee the multibillion-dollar business of gambling on pro and college games.

The NFL, NBA and others want Congress to set uniform, nationwide rules on sports gambling for all states, saying the integrity of athletics is at stake. And an influential Republican on Capitol Hill, Sen. Orrin Hatch of Utah, quickly announced plans to push for such legislation.

But states are already moving quickly to enact their own laws, with some legislators wanting fans to be able to place wagers by the time football season starts this fall. And there are serious doubts Congress wants to get involved.

“Sports are played on a national and sometimes international stage, crossing state borders and involving residents of numerous municipalities,” said Rummy Pandit, a gambling analyst with New Jersey’s Stockton University. “From that standpoint, federal regulation of sports betting makes sense. But the federal government has not historically been involved in the day-to-day regulation and oversight of gaming.”

For years the major sports leagues argued that gambling on games would lead to matchfixing and point-shaving. Now

that they lost the court battle with Monday’s landmark ruling, many suspect that they are now pushing for federal legislation not for high-minded reasons, but because they see it as the easiest way to get a cut of the proceeds.

Negotiating a piece of the action with Congress would be more efficient than trying to work out deals one by one with dozens of states.

If it passed a nationwide bill, Congress could require casinos, tracks or

state governments to share some of their revenue with the sports leagues — or pay them what the leagues like to call “integrity fees,” designed to cover the costs of policing betting.

The leagues have been making headway in negotiations on integrity fees with individual states, including Kansas, Connecticut, Indiana and New York, said Daniel Wallach, a sports law expert from Fort Lauderdale, Florida. The leagues also have come down on their fee demands in several states, lowering them from 1 percent to 0.25 percent, he said.

Wallach said the leagues, in seeking to be paid for

sports betting, might also be able to make a compelling court case that they have intellectual property rights in the data that is used in wagering.

On the other side of the negotiating table, the gambling industry might want to work out a grand compromise on giving a cut to the sports leagues, rather than “battle it out, state to state to state, winning some, losing some,” Wallach said.

But state opposition remains strong. Within hours after the ruling, New Jersey lawmakers introduced a new bill to regulate sports betting that would drop the integrity fee that was in an

earlier version.

In West Virginia, Republican Gov. Jim Justice allowed a sports betting bill to become law without his signature and later announced he had reached a deal for casinos to pay a fee to pro sports leagues. But casino operators denied there was a deal.

On Monday, the high court struck down a federal law that limited sports betting to four states that met a 1991 deadline to legalize it: Nevada, Delaware, Montana and Oregon. It came on a court challenge from New Jersey. As a result of the ruling, states are now free to adopt laws regulating sports betting.