Top House Judiciary Committee Members Favor Sportsbook Regulations
Ranking members of the House Judiciary Committee favor federal sports betting regulations in the United States. The chairman of the House Judiciary Committee, Rep. Bob Goodlatte (R-Virginia), is one of those who has spoken on behalf of a 50-state regulatory framework for America’s new sports betting laws.
Jim Sensenbrenner held hearings on Thursday to discuss whether US sports betting laws should be framed at the federal or state level. Those hearings took place at the same time as the more famous Brett Kavanaugh hearings before the Senate Judiciary Committee.
That meant the hearings got little attention from the national media, though they could have profound effects on U.S. gambling laws in the coming years.
Jim Sensenbrenner on Protecting US Sports Bettors
Rep. Sensenbrenner called for action from his subcommittee, and from the House of Representatives as a whole. The Wisconsin Republican said, “For Congress to do nothing is the worst possible alternative. We have some work to do, and I’m looking forward to working with you to try to come up with something both short term and something more permanent to deal with this issue.”
“I’m afraid if we don’t, there are going to be people who get hurt and get hurt badly.”
Sensenbrenner did not specify which policies he wanted in a new sports betting bill, but others at the hearing called for integrity fees, require operators to buy official data from the US sports leagues, bar risky live in-play betting, and ban gambling for people under 21. Others argued that several of those policies were attempts by US sports leagues to collect money on sports betting under the guise of protecting everyday U.S. gamblers.
The hearings featured advocates of both state and federal sports betting regulations. All sides agreed, now that sports betting is legal, that a set of laws should decide how gambling law is handled in sportsbooks.
Becky Harris and Sara Slane Testified
Protection of everyday citizens was the justification for a new law. Becky Harris, the chairwoman of the Nevada Gaming Control Board, and Sara Slane, a spokesperson for the American Gaming Association, both argued that state governments would be better suited to write sports betting laws.
Both argued that individual states should decide how best to protect their citizens. Under the system proposed by Harris and Slane, each state would decide whether to ban or regulate sports betting laws — or continue in a gray area with neither regulations nor a ban.
Ex-Gov. Jon Bruning Testified
Former Nebraska Governor Jon Bruning also testified, in his case on behalf of the Coalition to Stop Internet Gambling (CSIG). The CSIG was created and funded by Sheldon Adelson to pursue a 50-state ban on online gambling. Failing that, CSIG has tried to limit the spread of online gambling. With the help of local rivalries and conflicting interests, the CSIG has been largely successful on that front, with only 4 states legalizing online gambling since it was allowed by the federal government in 2011.
The CSIG argued for a severe limitation on sports betting. Citing the United Kingdom as a sign of bad regulations, Jon Bruning claimed that online bookmakers and other gaming companies target underage children in the UK, hoping to turn them into lifelong gamblers.
While a large segment of school age citizens in the United Kingdom exhibit signs of problem gambling, Gov. Bruning’s evidence is based on cases where the UK Gambling Commission came down hard on gaming operators which target underage children. In those cases, the ads do not advertise gambling per se, but advertise social gaming apps which mimic the real money casino gaming experience. The contention is UK gaming companies targeted children, hoping to form longstanding habits — though no research has tied those ads to UK students’ growing problem gambling habits.
Becky Harris told the Crime and Terrorism Subcommittee that online gambling has not proven very popular in Nevada. Harris suggested the committee was contemplating laws for a problem which substantially does not exist.
NFL Spokeswoman Jocelyn Moore
Jocelyn Moore, an NFL spokeswoman and lobbyist, testified that the U.S. Congress needs to pass broad regulations which would include integrity fees. An integrity fee is a 1% or 2% tax on sports betting revenues, which then would be paid to the NFL, MLB, NBA, and other US sports leagues for the cost of maintaining the integrity of pro sports, due to the influx of new sports betting wrought by the May 2018 US Supreme Court decision.
State lawmakers, gaming companies, and public officials have been critical of the integrity fee stipulation as a blatant money grab by the US sports leagues. They point out that the NFL, MLB, and NBA have contended for the past 25 years that they did everything in their power to protect the integrity of their sports. If that is so, say the critics, then it should cost the NFL and its counterparts no more resources now than it did before PASPA was repealed to protect the integrity of their sports.
Sara Slane Criticizes Integrity Fees
Despite that argument, Jocelyn Moore mentioned some version of the term “integrity fee” 24 times during her Thursday testimony. Moore’s testimony caused Sara Slane of the AGA to say, “All these notions about data fees and integrity fees by the leagues, that doesn’t help.”
Sportsbook operators argue that integrity fees would undermine the licensed and legal sportsbooks. Sara Slane pointed out that bookmakers operate on a small margin, so any additional taxes harm their ability to compete with unlicensed sportsbook operators. Imposing an integrity fee would undermine legitimate US sportsbooks and drive players to the unlicensed offshore bookmaker sites, which could afford to offer better odds.
Meanwhile, the players unions for the NFL, NBA, MLB, NHL, and MLS asked congressmen to include protections for American professional athletes and their families in any potential legislation. While it is uncertain the form that protection would take, some have advocated for protections against match-fixing or point-shaving, while others simply wanted groups like the NFLPA to share in the new profits (integrity fees) collected by US sports leagues.