US Gambling Laws in National Debate

Publish: 30.08.2018

Senate Minority Leader Chuck Schumer is working to make the Senate consider federal sports betting regulations. On Wednesday, Schumer announced support for creating a nationwide sports gambling network. The Democrat follows in the footsteps of the Senate president pro tempore, Utah Republican Orrin Hatch, who supported the creation of a robust legal framework for sports betting last week. Bipartisan support for creating this regulation is developing quickly, helping put sports betting back into the national debate.

Hatch’s support for the industry, however, comes without specifics. During his speech supporting federal regulations on the Senate floor last week, he didn’t boil down to the details of the regulations that he supports. However, he mentioned that there should be a strict system to prevent stakeholders- like game officials and athletes, from betting on events they participated in.

With the creation of federal policy, sports betting can be regulated more efficiently. Instead of opting for state-by-state navigation of rules and taxes, that delays implementation and alienates potential partners, sports betting companies can formulate their products according to a single federal plan. Sky high licensing fees, draconian taxes, and excessive restrictions have already crippled the industry in states that have legalized sportsbooks.

ESPN first released the news, based on a memo by Schumer, in which he wrote that all legal sportsbook should work together with sports leagues and base their decisions on official data provided by the leagues. Sportsbook operators, in theory, will pay the sports leagues for data, helping them source lucrative revenues. Nevada, for instance, has allowed sports bets sans partnerships with the leagues. The decades-old Nevada pattern is now followed in Mississippi, Delaware, and New Jersey, all three of which have allowed sports betting this year.

The memo does not detail Schumer’s views on integrity fees, i.e., a portion of revenues sourced back to the leagues to protect the sanctity of competition. The leagues have lobbied states to consider legalization of sports bets to earn this fee but to no avail. Legislators have shied away from the requests as it diminishes the state’s gambling tax revenue. Sports leagues also remain divided on the integrity fees as many claim they have invested extensively in anti-corruption measures.

Other provisions stated in Schumer’s memo include prohibiting gambling for people under 21 years of age, creating advertising regulations for gambling activities and creating an extensive system of monitoring suspicious activities. Leagues, gambling companies, sportsbook operators and other stakeholders in the industry appear to have formed a consensus for supporting these provisions.