Congress sets Sept. 27 hearing on sports betting regulation


house-representatives-sports-betting-hearingUS federal legislators will hold a hearing on sports betting next week, despite pushback from gaming operators that federal oversight of wagering is both unnecessary and unwanted.

On Thursday, ESPN scribe David Purdum reported that the House of Representatives Judiciary Subcommittee on Crime, Terrorism, Homeland Security and Investigation had scheduled a hearing titled An Examination of Sports Betting in America for Thursday, September 27 at 10am.

The prospect of the feds having a go at regulating sports betting took an ominous turn last month, when Sen. Orrin Hatch (R-UT) made a speech on the Senate floor arguing for Congress to impose “a set of fundamental, federal standards” for sports betting. Hatch’s call was echoed the following week by Senate Minority Leader Chuck Schumer (D-NY).

The American Gaming Association (AGA), the nation’s foremost gaming industry group, pushed back immediately on Hatch’s and Schumer’s proposals, noting that the last federal effort to control sports betting was “an abject failure” that was struck down by the US Supreme Court this spring, leading to a rush of individual states approving their own betting regulatory setups.

On Thursday, the AGA issued a statement saying it looked forward to discussing the gaming industry’s “core principles” on legal sports betting with the subcommittee members.

Last week, the AGA sent Schumer a letter restating its position that individual states had already enacted “significant, effective regulatory oversight” of wagering and thus “additional federal engagement is not warranted at this time.”

Both Hatch and Schumer made sports integrity a key plank of their push for federal oversight of wagering, and the AGA’s letter references discussions with AGA members and the major sports leagues regarding “the formation of an integrity monitoring association,” which would establish “a data repository to share any suspicious betting information with law enforcement and gaming regulators.”

The leagues have pressed for a cut of betting handle as an ‘integrity fee’ and to require betting operators to use league-supplied data for determining wagering outcomes, but the AGA insists there is “neither a need nor a legal precedent to mandate sportsbook operators purchase ‘official data’ directly from leagues.”

The AGA insists that compelling operators to obtain their sports data from a single source would empower this source “to set inflated, non-competitive monopoly prices for their services.” This would put US-licensed operators at a competitive disadvantage to the numerous internationally licensed online sportsbooks that continue to address the unmet needs of US punters.

For similar reasons, the AGA opposes the leagues’ push for the right to restrict the types of wagers that can be offered on their respective sports. The AGA notes that these same leagues made no such demands on Nevada sportsbooks during the decades in which these books held a monopoly on US wagering.

Despite the bipartisan nature of the Hatch/Schumer path, it appears highly unlikely that Congress will be willing to devote the time and energy to regulate sports betting, particularly given (a) the number of states that have already enacted intrastate wagering regimes, (b) the narrow window before Congress breaks for November’s mid-term elections, and (c) the distractions caused by the alleged libidinous activities of the latest Supreme Court nominee during his prep school days. File this one under ‘needless posturing.’