Federal Sports Betting Regulation: AGA Tells Chuck Schumer Not Warranted

The American Gaming Association (AGA) is urging Democrat Senator Chuck Schumer to reconsider his recent call for federal sports betting legislation. In a letter sent to the senator’s office on Thursday, the AGA emphasized that it supports safe, regulated sports betting but “firmly believes additional federal engagement is not warranted at this time.”

The letter comes in response to a memo Senator Schumer shared with ESPN on August 29^th. In his memo, Schumer called on Congress to form a federal framework for sports betting regulation.

Some of the key provisions Schumer would like to see in a federal regulation bill include:

• Require all sportsbooks to only use official data supplied by the leagues
• Allow the leagues to control what types of wagers may be accepted by sportsbooks
• Establish a minimum age of 21 to bet on sports
• Require sportsbooks and advertisers to take reasonable steps not to target minors and to clearly disclose the dangers of gambling
• Require sportsbooks to share suspicious betting activity among other one another, with leagues and with regulators
• Give states the freedom to choose whether or not to participate in sports betting, but not to set their own rules

Schumer’s memo also recommended the leagues increase monitoring to protect their games from unethical behavior associated with gambling, but stopped short of recommending integrity fees that would force sportsbooks to funnel money to the pro sports leagues.

Representatives of the major sports leagues have been lobbying state legislatures across the country to write integrity fees into their sports betting bills as a form of remuneration for hosting the games and to offset additional monitoring costs needed to protect the integrity of their games.

Integrity fees have been met with considerable pushback from state-level lawmakers, editorialists and sports bettors alike. To date, none of the states that have fully legalized sports betting have written an integrity fee into the legislation.

In a statement given to ESPN, Chuck Schumer said this:

“As a New York sports fan – especially my Yankees and Giants – and a senator, my priority in the wake of the Murphy v. NCAA decision is making sure the integrity of the games we love is preserved, that young people and those suffering from gambling addiction are not taken advantage of, and that consumers that choose to engage in sports betting are appropriately protected.

“With the Supreme Court’s ruling, it’s incumbent on the federal government to take a leadership role and provide the necessary guidance to prevent uncertainty and confusion for the leagues, state governments, consumers and fans alike.”

Schumer’s memo was well-received by the major sports leagues and the NCAA. ESPN noted that the NBA, MLB and PGA Tour all issued a joint statement supporting Senator Schumer’s call for federal regulation. The NFL and NCAA also came out with a joint statement echoing those sentiments.

Senator Schumer’s plan for federal regulation lines up almost perfectly with previous calls for federal regulation made by the pro sports leagues, so it’s no surprise to see the leagues voice their support. The one area of divergence is the leagues have clearly expressed their desire for integrity fees while Schumer’s memo danced around the issue.

The Schumer plan already has some level of bipartisan support at the federal level. Five days prior to the Schumer memo, Republican Senator Orrin Hatch reaffirmed his desire to implement a national sports betting regulatory framework.

Whether or not the two have the political capital to make progress on this issue remains to be seen. Most state-level lawmakers have shown varying levels of hostility to integrity fees, official data requirements and federal regulation.

The AGA Response to Schumer’s Memo

The American Gaming Association issued a statement in response to Chuck Schumer’s memo on August 29^th and followed up with a letter addressed to Schumer on Thursday. The August 29 statement reads as follows:

“The casino gaming industry shares Senator Schumer’s goal in preserving the integrity of sporting events and providing consumer protections. Federal oversight of sports betting was an abject failure for 26 years only contributing to a thriving illegal market with no consumer protections and safeguards. New federal mandates are a nonstarter.

“The casino industry is working with stakeholders to ensure the proper protections for consumers, and the integrity of bets and sporting contests are included in state policy, universally implemented by all operators in those states, and overseen by effective state and tribal gaming regulators.”

The AGA followed up that statement a couple of weeks later with a letter addressed to Senator Schumer that outlines the AGA’s vision of regulated sports betting. As the AGA’s first statement explained, the AGA opposes federal regulation and instead believes the best path forward is to allow the states to regulate sports betting as they see fit.

In the letter, the AGA outlined five core areas in which sports betting policy should focus and explains how the states can address each of those concerns. Those five core areas are:

• Promote responsible gaming and responsible advertising: The AGA encourages all operators to participate in the AGA’s Responsible Gaming Code of Conduct
• Protect game integrity: The AGA is already promoting the use of new technology and “big data” to identify irregularities and encourages operators and regulators to share information to better identify and protect against potential integrity issues. The AGA is also considering a “data repository” that would allow operators to share information with law enforcement and other gaming regulators
• Discourage enacting legislative preferences for specific business interests: The AGA opposes government mandates when private contracts between entities will do. For instance, the AGA opposes government mandates forcing sportsbooks to buy official data between leagues when private deals can be made between industry stakeholders. The AGA also opposes the government giving sports leagues the power to determine which types of bets may be offered – this is a choice sportsbooks can make for themselves.
• Empower state and tribal regulation: The AGA believes allowing states and tribes to regulate gaming on their own is the best path forward because states and tribes already regulate themselves when it comes to lotteries and casino gaming. The regulations in place at the state level already effectively set age controls, record keeping, licensing suitability and more.
• Place consumers first: The AGA encourages all stakeholders to understand why consumers resort to offshore/illegal sportsbooks and put in place policies that allow licensed, legal sportsbooks to effectively compete with illegal providers. Government force has been unsuccessful at stopping the illegal betting industry (PASPA was ineffective at preventing illegal betting).

The full AGA letter goes into greater detail, but that’s the summary of their core policy positions. If you’re interested in the topic of state vs. federal sports betting regulation, the full letter is a must-read. The American Gaming Association has much to say on the matter.