Federal Government may look at sports betting again

Federal Government may look at sports betting again

September 26, 2018 3:00 AM


The prospect of a congressional hearing this week that could lead to legislation affecting legal sports wagering across the U.S. promises to suck up the attention of industry followers.

The hearing is scheduled before a subcommittee of the House Judiciary Committee Sept. 27, but may be changed depending on what happens with the ongoing war of razor-edged rhetoric as the Senate’s Republican leadership presses for a speedy vote on President Trump’s appointment of Brett Kavanaugh to the Supreme Court.

What has Kavanaugh’s future got to do with sports betting? I’m not sure but people with a knowledge of the game of who has power on Capitol Hill say there may be a conflict.

It can’t be a surprise to anyone that lawmakers have put their spotlight on sports betting. There are questions that need to be asked and answered, and of course there are always the special interests straining for attention.

It is possible, even probable, one or more of the leagues are responsible for the scheduling. The leagues want to get what they call an “integrity fee,” a piece of the action, a royalty – call it whatever you will – and they would rather not negotiate it on a state-by-state basis. NBA Commissioner Adam Silver argues the fee is like the royalties musicians and performers routinely receive.

Sen. Orrin Hatch, R-Utah, and Sen. Charles Schumer, D-NY, have both previously said they would call for hearings to examine sports betting’s need for federal action that might address legal sports betting across the entire country. The pro sports leagues would like congressional action to create a level playing field.

Joe Asher, CEO of the U.S. arm of London-based William Hill, a bookmaker that has been busy signing up business across the country, could not be reached for comment.

It is easy to understand the interest of both Schumer and Hatch. There are a number of professional teams in New York. They are all there, from ice hockey to the NFL. As for Hatch, he was supportive of the 1992 restrictions that made wide open sports wagering a uniquely Nevada pastime until those restrictions were removed by the Supreme Court.

Hatch’s support of PASPA (the Professional and Amateur Sports Protection Act) had me remembering the words of a veteran lobbyist who told me “the place to be when you’re opposed to whatever is getting attention is with the group writing the rules.

There were about a half-dozen books beyond Nevada and New Jersey a few days ago and there is the prospect of more by the end of the year. The number will continue to increase as New Jersey’s success is examined.

New Jersey is probably soon going to see its sportsbooks posting multiples of what is wagered in Nevada. Consider the huge market, people who can reach a New Jersey book with a short drive. How casinos and tracks with access to sports wagering respond is still to be seen.

“Some patience is necessary,” explained an attorney who did not want to be identified because of possible conflicts with unidentified clients. “Evolution sometimes takes awhile as you look around and see what others are doing.”

He is right. It took more than five years from start to finish for former New Jersey governor Chris Christie to decide his state should challenge PASPA and then watch the Supreme Court toss the PASPA restrictions aside opening the door to all states.

Don’t forget, New Jersey could have had sports wagering years ago but political preferences got in the way. The Washington that brought us PASPA gave New Jersey a year to decide if Atlantic City casinos should have access to it. The decision would have required a statewide referendum, something Republican strategists were reluctant to do because, they are said to have argued, a vote to legalize sports wagering might bring out too many inner city voters and that would hurt chances of electing a Republican governor.

Well, voters did elect a Republican governor and sports betting got put back on the list of things to do … maybe, possibly some day.

Nevada had an experience of its own with differing perspectives. The Gaming Commission nearly 20 years ago approved a regulation proposal that would have paved the way for internet gaming. It was sent to the Department of Justice for comment. The DOJ wrote back that Nevada interests would be best served by backing off since the state’s efforts appeared to conflict with federal regulations as they were then interpreted.

Times have certainly changed.

As my friend the lawyer suggested, watching a process evolve is almost as exciting as watching grass grow.