The conclusion of Thursday’s House of Representatives hearing in Washington, D.C. on the future of sports betting in the U.S. summed up the whole 90 minutes quite well.
U.S. Rep. Jim Sensenbrenner (R-WI), who ran the hearing, said the five witnesses provided “a lot useful information” about the consequences of the Supreme Court’s landmark sports betting ruling in May that handed a win to New Jersey after a six-year legal battle. As the result of that ruling, any state is now entitled to mirror Nevada’s extensive sports betting offerings.
“One thing all of you agree on is that for Congress to do nothing is the worst possible alternative,” Sensenbrenner said at the end of the Judiciary Committee’s House Subcommittee on Crime, Terrorism, Homeland Security, and Investigation meeting. (Yes, that’s really the subcommittee tasked with this.)
Wait, what? I walked over to Becky Harris, who chairs the Nevada Gaming Control Board, to confirm what I had heard her say: that there’s no need for Congress to step in right now, as the states are figuring it out for themselves. At one point Harris said of her state’s long history of detecting “match fixing” in various sports due to odd fluctuations in betting activity, “We’re good at this.”
“You heard correctly,” Harris told me with a smile about her sentiments.
Then there was Sara Slane, senior vice president of public affairs for the American Gaming Association, who earlier said that, “The AGA does not believe an additional layer of federal regulatory oversight is needed at this time.”
I asked Slane about Sensenbrenner’s comment, and she offered that she backed better enforcement of illegal online gambling.
In short, Sensenbrenner wrapped up the hearing by misrepresenting the opinions of at least two of the five witnesses. It was a fitting bow to put on an often muddled hearing.
What’s old is new again
The title of the event was “Post-PASPA: An Examination of Sports Betting in America” — a nod to the Supreme Court’s overturning of the Professional and Amateur Sports Protection Act of 1992.
But much of the discussion not only could have taken place five or more years ago … it did take place five or more years ago. There was much talk about The Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA), and how those federal laws could be better utilized in the war on illegal gambling.
Coalition to Stop Internet Gambling Counselor Jon Bruning and Stop Predatory Gambling Director Les Bernal once again warned about possible negative effects of illegal gambling on society.
But New Jersey and Delaware already have had legal online casino gaming for five years, and New Jersey now has eight legal online sportsbooks. In many respects, those horses have left the barn.
That also may well apply to the pitch by National Football League executive Jocelyn Moore to have Congress mandate that legal sportsbooks use only official league data — for which the leagues would get a sliver of revenues, also called an “integrity fee.”
Nevada has never offered these fees, and New Jersey, Delaware, West Virginia, and Mississippi all have rolled out parallel gambling this year that also do not feature such fees.
Bob Goodlatte, a Republican from Virginia who led the fight for the passage of UIGEA, continues to promote the idea that “online gambling can be more destructive to the families and communities of addicted gamblers than if a bricks-and-mortar casino was built next door.”
This hearing wasn’t supposed to be about online gambling, but that became the main topic of discussion once the question-and-answer session began.
Goodlatte added that “in recent years, many gambling operators have demonstrated technology that can, allegedly, ensure a bettor placing a bet is located in a state where gambling is legal.”
Of course, there is nothing “alleged” about the success of Delaware and New Jersey in ensuring just that. (In fact, if anything, the alarming part for some surely is how well it works — Big Brother really is watching, and getting precise geolocation pings off ubiquitous cell phone towers.)
“Bottom racing” is back
Moore, echoing other sports league executives, said she worried about a “race to the bottom” by states as they “rush” to legalize sports betting.
It is true that there have been a few hiccups, most notably a botched in-game wager offering on a recent Denver-Oakland NFL game that led at first to bad publicity for FanDuel Sportsbook for refusal to pay up the seeming $82,000 win — and then the reverse when FanDuel paid out anyway, even when the fine print suggested they didn’t have to do so.
One topic revisited a number of times was the problem of what to do to stem illegal sports betting.
Sensenbrenner mentioned the perks of playing on credit, avoiding paying taxes on a big score, and better odds in some cases. “If I were running around with a fistful of money to bet, where would I go – when the illegal sportsbook is offering all of these goodies that the legal sportsbook does not?” Sensenbrenner asked.
Of course, no one has yet come up with a good answer to that one. The AGA’s Slane did her best by suggesting that not forcing legal operators to pay an integrity fee to the leagues would help keep the legal books more competitive.
But Slane still conceded to Sensenbrenner, “You hit the nail on the head.”
Round and round it went, with all acknowledging that this was the first of probably many hearings on this topic.
So Sensenbrenner was right about there being one thing that knowledgeable folks in Room 2141 of the Rayburn Building probably agree on: If Congress is going to shake up the laws governing sports betting, it won’t be happening anytime soon.