Will Congress get involved with sports betting?
September 05, 2018 3:00 AM
by The Analyst
With the announcements from Senator Hatch’s office and separately from Senator Schumer’s office regarding their thoughts on federally regulating sports wagering, I received the following question from a regular reader:
“When I read that Senator Hatch is going to propose legislation to regulate sports wagering, I remembered you had written about that possibility months ago. Then when I read about Senator Schumer having similar thoughts and was looking at making books use league information, I remembered even further back that you called that one to. Since Hatch is a powerful Republican and Schumer a powerful Democrat is there a chance they could actually come up with bi-partisan laws to slow down the legalization of sports wagering or make it illegal again?”
First off, thank you for the question, it is a good one. Given the way politics have been running lately one would think there is not a thing Senate Democrats and Republicans could agree on, but professional sports leagues are very powerful, and their team owners are usually extraordinarily influential in their local communities and generally know how to get what they want at both the state and federal levels.
That said, in the odd chance the leagues could get bi-partisan legislation put together the real problem they will have is coming up with a way to write the legislation so it is not challenged and eventually struck down by the Supreme Court the way the prior prohibition was.
About the only laws that are bullet proof from the Supreme Court are tax laws. Article One and Article Sixteen of the Constitution effectively give Congress the absolute right to tax people and businesses just about any way they like. So Senators Schumer and Hatch could simply put forward legislation that says something to the affect that “all sportsbooks must use licensed information from the applicable leagues to settle wagers and if they do they only have to pay a quarter percent on all wagers to the federal government (a rate all legal books currently pay), but if they do not use licensed league data, then they have to pay thirty percent (30%) on all wagers.”
This would effectively kill the sports betting business for any book operator who does not get licensed data from the leagues.
Reality check: Senator Hatch is retiring which limits his ability to advocate or be taken seriously on pushing any sports wagering legislation through the system in his remaining months and the Democrats and Republicans have been at each other’s throats so much lately they can barely agree as to what the time of day is let alone really consider new legislation.
Under such circumstances and the practice of needing committee hearings, getting input from leagues and the gaming industry before advancing real legislation is probably a very long way off and that creates an odd protection for the sports wagering industry from federal intervention.
While there is always a chance things could come together such that federal sports wagering laws could get enacted, the longer there is a delay in federal sports wagering legislation the greater the likelihood more states will adopt sports wagering and start relying on the taxes generated.
Every time a state joins the legal sports wagering community, the tougher it will be to get support from the respective state’s Congressmen and Senators to support anything that might negatively impact their respective state’s interest. As such it is my opinion that, barring any extraordinary large-scale scandal, as each day goes by the odds of the federal government enacting meaningful sports wagering legislation get higher and higher.