Lawmakers from New York failed to act decisively on sports betting bills this year, but that’s not stopping one of them from taking the issue to Congress. Earlier this week, US Sen. Chuck Schumer (D-NY) submitted a proposed framework for federal legislation.
In an open letter, Schumer issues a caution regarding states that are working on their own sports betting laws. Here’s how he opens:
In light of the Supreme Court’s recent decision in Murphy v. NCAA, states are now free to legalize sports betting. As a result, many state governments are quickly implementing different laws to set up gambling in their jurisdictions. Whether you support or oppose legalized sports gambling, I think most Americans would agree the sports games we all love to watch must remain trustworthy and protected from potential corruption. We teach our children about playing sports with integrity and respect for the rules – we should expect nothing less from the athletes they love to watch.
The senator intends to install an overarching federal sports betting framework, laying out three pillars for his proposed legislation.
What’s in Schumer’s federal sports betting framework?
According to Schumer’s proposal, here are the three items that need protecting:
- Young people, and those suffering from gambling addiction
- The integrity of the game
- Consumers and individuals placing bets
The first point is pretty agreeable all around. Schumer suggests a federal minimum betting age of 21 years old, virtuous advertising policies and easy access to responsible gambling resources. Fair enough.
“Integrity” is the number one buzzword for lawmakers addressing sports betting, and Schumer’s second pillar focuses on this. Although slightly more intrusive, his integrity proposals are not unreasonable. One requires operators to share anonymized betting data with sports governing bodies. Another would restrict folks like athletes and coaches from betting on sports of any sort.
That third pillar, though, makes us raise an eyebrow as it moves to empower sports leagues.
A league-friendly proposal
“Protecting customers and individuals placing bets,” should be the most agreeable part of the framework, but this third category contains some controversial bullet points.
Around the first of the year, the NBA and MLB began a lobbying effort at the state level on behalf of all US sports leagues. Eventually joined by the PGA Tour, the trio visited just about every state considering a sports betting bill to pitch their own model legislation to lawmakers.
Schumer’s framework reflects clear input from those lobbyists, yielding to a few of their fundamental requests. Under his proposal:
- Operators would be required to license and use official league data
- Leagues would be allowed to dictate which types of bets are permitted
Getting into details
The leagues have also sought a so-called “integrity fee” or “royalty fee” at the state level, which would allow them to collect a direct share of all money wagered. After facing broad pushback in statehouses across the country, that ship has apparently sailed.
Now the focus has moved to mandated use of official data and collection of the associated licensing fees. The NBA has found some traction here, forming a commercial partnership with MGM that includes the use of its data. So far, however, no law in any state requires this sort of arrangement.
Following Schumer’s announcement, five sports leagues released statements in support of the framework. It’s hardly a surprise, of course, given what’s included. Read the joint statements here:
All four professional leagues are headquartered in New York, and all four have multiple franchises that call the state home. The NHL is the only one that did not offer a public comment.
Will Congress act on sports betting?
Almost certainly not this year.
Lawmakers are gearing up for midterm elections, and tackling bills that are controversial or non-imperative is low on the list of priorities. Sen. Orrin Hatch has also indicated an appetite to push federal sports betting legislation before he retires this fall, but that seems unlikely.
If Schumer has his way, though, Congress could take up the issue in earnest in 2019. By that time, at least seven states are likely to have legal sports betting, and many more will be considering legislation. You’d have to imagine that federal lawmakers from those states will have a limited appetite for rolling back legislation on the topic.
Nevada lawmakers certainly won’t support this proposal. The Silver State has been offering sports betting under a fairly faultless framework since just after World War II. Following Schumer’s announcement, Rep. Dina Titus offered up the Nevada sports betting model as the one to follow.
.@SenSchumer, I invite you to take a look at Nevada's sports betting framework. We've already set the gold standard. We should be cautious at the federal level.
— Dina Titus (@repdinatitus) August 29, 2018
If Schumer is successful in pushing a federal sports betting bill, states like Nevada would no longer be able to dictate their own framework. Each of the 50 would be able to opt-in to the federal model, but each would be obligated to comply with all of its terms.
A federal bill represents the best chance for the leagues to capitalize on widespread sports betting, so you should expect their vocal support for Schumer’s proposal going forward.