Odds are against gambling measure
Congress unlikely to take on sports betting
WASHINGTON – One of the sponsors of the 1992 federal ban on sports betting that the Supreme Court struck down said Congress needs to try again to assert control before states set their own rules.
“We cannot allow this practice to proliferate amid uneven enforcement and a patchwork race to the regulatory bottom,” said Sen. Orrin Hatch, RUtah. “At stake here is the very integrity of sports.”
Don’t expect much momentum despite Hatch’s concerns.
As Congress enters a slow period in the run-up to the midterm elections, the only bills likely to reach President Trump’s desk are those that keep the government or specific programs running or that help the GOP maintain control of seats.
A core of GOP lawmakers would be unlikely to agree that Congress needs to pre-empt states as they set up sports betting programs.
“We cannot allow this practice to proliferate amid uneven enforcement and a patchwork race to the regulatory bottom. At stake here is the very integrity of sports.”
Sen. Orrin Hatch, R-Utah
“I think it’s going to be a heavy lift for Congress to do anything in the near-term,” said American Gaming Association lobbyist Chris Cylke. “This is viewed by many stakeholders as a states’ rights issue, so it’s tough for those asking Congress to assert the federal government’s involvement here.”
The Supreme Court won cheers from strict federalists in Congress when it sided Monday with a New Jersey challenge and ruled the Professional and Amateur Sports Protection Act of 1992 was unconstitutional because it “commandeered” state legislatures in violation of the 10th Amendment, which says the federal government has limited enumerated powers and all other power is held by states.
Hatch’s comments are in sync with some professional leagues trying to get states to pay them “integrity fees” to protect their games.
“Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests,” NFL spokesman Brian McCarthy said. “We intend to call on Congress again, this time to enact a core regulatory framework.”
A centralized system of federal rules might benefit the sports leagues, but there are other companies, especially fantasy sports firms such as FanDuel and DraftKings, that have spent the past few years getting their games approved on a state-by-state basis and are ready to exploit their expertise by offering new games.
Each state not only had to decide whether to allow fantasy sports bets but also whether to set a minimum age for players, whether collegiate sports were off-limits and how to ensure players are actually who they say they are and playing within state boundaries.
“FanDuel and DraftKings are uniquely advantaged, having literally gone through this since October 2015,” said Paul Martino, general partner of Bullpen Capital and an investor in FanDuel. “The general counsel of FanDuel, I doubt there’s anyone who knows as much about the regulatory regime in the states.”
Although it’s a long shot that Congress will act, long shots do come in from time to time.
The majority opinion from Supreme Court Justice Samuel Alito left the door open for Congress to step in and pre-empt the states if it wants to set up a federal regulatory system.
Much will depend on what Congress tries to do, and whether Trump, a former casino operator, gets involved. The White House did not respond to a request for comment Monday.
Boosting the chances of federal action is the fact that team owners tend to have political clout in their states and could influence lawmakers, especially if negotiations with states do not go their way.
“This is potentially a bipartisan issue,” said Kate Lowenhar-Fisher, a Las Vegas-based gaming attorney. “It makes for strange bedfellows.”
Hatch spokesman Matt Whitlock said the senator was talking to colleagues and the industry stakeholders.
“He believes there’s a strong appetite among his colleagues to get ahead of the issue and ensure there are some federal standards in place,” Whitlock said.
Rep. Frank Pallone, D-N.J., said he thinks there will be renewed attention to a bill he introduced last December when the court heard arguments on the sports betting case. Part of the bill, dubbed the Gaming Accountability and Modernization Enhancement Act, is moot, because it would have given states the authority to legalize sports betting, a power the court granted.
Other provisions would bar underage gambling, require protection of gamblers’ privacy and create a federal program to implement programs to combat gambling addiction.
“We should act on this because there are states that, unlike New Jersey, have no standards and no regulations,” Pallone said.
He balked at the suggestion he was calling for a new federal regulatory system, saying his bill would impose “a very light touch.”