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Volume 25 No. 4

Sports in Society

Hatch didn’t detail what his bill would do, but his office said it would set a standard for sports betting
Photo: GETTY IMAGES

Sen. Orrin Hatch (R-Utah) said that he "would unveil legislation soon on sports betting after the U.S. Supreme Court struck down a federal law that had prohibited it outside Nevada," according to Thomas Burr of the SALT LAKE TRIBUNE. Hatch "didn’t detail what his bill would do but his office said it would set a standard for sports betting that would 'uphold the integrity of the game,' protect consumers, safeguard against underage and problem gambling, and ensure that states that do not want sports betting won’t have to accept it." Hatch said that he "would introduce his legislation in the coming weeks after speaking to his colleagues and those involved in the gambling business and sports associations" (SALT LAKE TRIBUNE, 5/15). Hatch's Dir of Communications Matt Whitlock said, “It will be up to each state to decide whether to legalize sports gambling and how to regulate it." He added Hatch "believes we need to ensure there are some federal standards in place to ensure that state regulatory frameworks aren’t a race to the bottom." THE HILL's Wheeler & Carney noted Hatch is "one of several original" co-sponsors of the Professional & Amateur Sports Protection Act of '92 (PASPA) that was struck down yesterday. Any legislation enacting new regulations "could have to pass through the Senate Judiciary Committee, where Chairman Chuck Grassley (R-Iowa) is one of five senators who originally opposed PASPA." Grassley has not commented on yesterday's ruling, but his support "could be crucial to getting new legislation onto the floor of the Senate." U.S. Rep. Frank Pallone Jr. (D-N.J.) is "calling on Congress to consider his legislation allowing states to legalize sports and online gambling." Under the Gaming Accountability & Modernization Enhancement Act, or GAME Act, states "would have to meet certain baseline consumer protections such as licensing facilities, following age restrictions, collecting taxes and protecting against crime and compulsive play in allowing sports wagers" (THEHILL.com, 5/14).

START FROM THE TOP: Mavericks Owner Mark Cuban hopes there is a federal approach to sports betting as "opposed to everybody having to deal with each stage individually." He said if that is "difficult in the short term, it’d be really smart for the commissions from as many states as possible to work together to standardize things." That would "enable the most creativity." Cuban: "When each state has its own set of rules and requirements, that jacks up the expense for everybody which minimizes the entrepreneurial opportunities and unique technology opportunities." He said legal sports betting "doubles the value of professional sports franchises in a second." He added it will "increase interest" and "add to what happens in our arena and in stadiums, it will increase the viewership for our biggest customers online and on TV." Cuban said it also "helps traditional television, because traditional television is much lower latency where online, because they cash, it’d be a much longer latency” (ESPN.com, 5/14).

PLACE YOUR BETS: The NFL in a statement said that it was "hopeful Washington would act, saying its 'long-standing and unwavering commitment to protecting the integrity of our game remains absolute.'" However, POLITICO's Hutchins & Gerstein reported supporters of sports betting were "skeptical lawmakers could achieve such a goal" (POLITICO.com, 5/14). In Atlanta, Jamie Dupree wrote the major pro sports leagues "don’t want different rules in fifty different states dealing with sports gambling." But can Congress "really come up with something like that?" (AJC.com, 5/14). In Charlotte, Scott Fowler writes there "will be much to hash out," including whether people should be "allowed to gamble on college teams based in their own state." Another question is whether sports betting will "only be legal in the casinos that are scattered across America, or will there be small betting shops all over the place, as you can now find in London?" Fowler: "Will you be able to place bets on your phone while the game is going on, trying to predict who will score the game's next touchdown? It will require a lot of thought to do this right" (CHARLOTTE OBSERVER, 5/15).

NEW SOURCE OF INCOME: The AJC's Dupree wrote the ruling brings a "new source of revenue for state governments." In a time of "tight budgetary resources, the ability to allow for sports gambling would also give states the opportunity to tax not only the gaming operations, but also the winnings" and all the "associated activities related to sports gaming" (AJC.com, 5/14). West Virginia has proposed a state tax rate of 10% on "general gross revenues from sports betting." Gaming research firm Eilers & Krejcik predicts that resulting in an additional $13.4M in annual tax revenue "coming to the state in the first year of sports betting, with the amount rising" to $28.7M by year five (Wheeling INTELLINGENCER, 5/15). However, USA TODAY's Paul Davidson cites sources as saying that while the ruling "may provide some pocket change" for state governments, it likely will not be enough to "help head off looming budget crises in a few years." Rockefeller Institute of Government analyst Lucy Dadayan: “I don’t think that for any state it’s going to make a huge difference" (USA TODAY, 5/15). Meanwhile, in Boston, Battenfeld & Chabot note the ruling "could sprout a whole new bureaucracy to cover sports betting, similar to how the Massachusetts Gaming and Cannabis Control commissions were created to control casino gambling and legalized pot sales" (BOSTON HERALD, 5/15). 

OPEN TO OUTSIDE INFLUENCES? In Chicago, David Haugh writes legalized sports gambling "sounds as prosperous as it could be perilous." What is the "over/under on the number of NFL players, coaches or support personnel who just became bigger targets for injury information by ne’er-do-wells?" This "increases the revenue but also the sleaze factor, every sports organization’s biggest fear." It is "naive to think this won’t tempt hard-core gamblers from trying to infiltrate sports teams for any edge to place legal bets" (CHICAGO TRIBUNE, 5/15). But in Chicago, Barry Rozner writes wealthy pro athletes are "very unlikely to throw games," as it is "not 1919" (Chicago DAILY HERALD, 5/15). In Ft. Lauderdale, Dave Hyde writes the "chance of sitting beside some lunatic fan going crazy after a meaningless free throw in the final second of a nine-point game will rise off the charts." Hyde: "That’s my only concern" (South Florida SUN SENTINEL, 5/15).

FROM THE EDITORIAL BOARD: A WALL STREET JOURNAL editorial states everyone who "favors individual liberty should agree" with the ruling. Cultural mores regarding gambling have "changed over the past century, and one of the last remaining taboos is against gambling on sports contests due to the opportunity for corrupting the competition." The Court’s "full-throated defense of federalism should be welcome on both the political right and left" (WALL STREET JOURNAL, 5/15). A CHARLOTTE OBSERVER editorial states sports gambling "just became mainstream." It went from "being pot to being cigarettes -- not quite embraced, but not so illicit." Betting just became "less of a dirty word" (CHARLOTTE OBSERVER, 5/15). A USA TODAY editorial notes states have been "given the green light to enter the sports betting racket," but just because they "can doesn't mean they should." State involvement in gambling "comes with significant costs," as its proceeds "often flow to out-of-state corporations that manage casinos." Sports betting "comes with a second problem: the potential for corruption." Congress should "get into the act of regulating sports betting" (USA TODAY, 5/15). A N.Y. DAILY NEWS editorial states, "We can and must hold the line here, however, by preventing sports bets outside of the full-fledged upstate casinos where other forms of gambling are already allowed, and where sports betting was prospectively authorized, pending federal action, in 2013." There are "profound social and economic consequences of making it fully frictionless" for fans to "put the week's paycheck down on the Eagles plus five-and-a-half" (N.Y. DAILY NEWS, 5/15).

Mississippi, Pennsylvania, Connecticut and West Virginia have also passed laws allowing legal sports betting
Photo: GETTY IMAGES

New Jersey lawmakers vowed to "move quickly to pass legislation to regulate and tax legalized sports betting after the Supreme Court ruled in the state’s favor by striking down a federal law prohibiting such gambling in many states," according to Kate King of the WALL STREET JOURNAL. New Jersey state Sen. Vin Gopal said that lawmakers "could pass a law as soon as next month." With federal law "no longer standing in the way, lawmakers must now craft legislation that provides oversight of sports betting, while imposing a tax that collects enough revenue without pushing gamblers back into the black market." Lawmakers in New York and Connecticut also said that they "would act fast." New York state Sen. John Bonacic "introduced legislation in March that would legalize sports betting at four upstate New York casinos." Bonacic: "I am confident that working together with my colleagues in both the Senate and Assembly, we can have a bill ready for the Governor’s signature by the end of the session" (WALL STREET JOURNAL, 5/15). USA TODAY's A.J. Perez in a front-page piece reports it "stands to reason it won't take long" for New Jersey's horse tracks and Atlantic City's casinos to "ramp up." Monmouth Park Racetrack operator Dennis Drazin yesterday said that his facility "could, in theory, offer betting in two weeks." Perez notes track and casino operators are "likely to put such a move on hold as the state passes legislation in the wake" of the SCOTUS ruling (USA TODAY, 5/15). Monmouth Park likely will be the "first big New Jersey venue to take sports bets, and the first business significantly affected" by the SCOTUS ruling. Track officials have "spent years preparing for this day, planning in earnest" since state voters "passed a referendum" in '11 to allow sports wagering (WASHINGTON POST, 5/15). The question is if Monmouth Park "has to wait for the state to set up sports betting regulations" (Newark STAR-LEDGER, 5/15). 

STATES READY FOR BETTING: Mississippi, Pennsylvania, Connecticut and West Virginia, in addition to New Jersey, have "passed state measures allowing legal sports betting" in anticipation of yesterday's ruling, and in Mississippi, Geoff Pender reports state gambling officials believe casinos "could be up and running with betting on professional and college sports within 45 days." Mississippi Gaming Commission Dir Allen Godfrey said that the organization "would have regulations and approvals finalized and sports betting could begin in casinos 'within 45 to 60 days, before football season'" (Jackson CLARION-LEDGER, 5/15). Pennsylvania Gaming Control Board Dir of Communications Doug Harbach said that his group could "not provide an estimate for when sports betting might become legal in the state." Pennsylvania state Rep. George Dunbar said that the Legislature "could still pass more rules ... such as a proposal that would require sports betting operations to have a physical location in Pennsylvania" (TRIBLIVE.com, 5/14). However, at least one casino in Pennsylvania, SugarHouse in Philadelphia, said that it "was ready to add sports betting 'as soon as possible'" (PHILADELPHIA INQUIRER, 5/15). Connecticut Gov. Dannel Malloy and Speaker of the House Joe Aresimowic said that they "support holding a special session to revisit a bill legalizing sports gambling" in the state. State lawmakers "failed to pass a preemptive bill earlier this year laying the framework to regulate and tax sports betting" (HARTFORD COURANT, 5/15). West Virginia earlier this year became the only state legislature to pass a law legalizing sports betting, and state Senate Finance Committee Chair Craig Blair said that there is "no need for a special session to work out arrangements with the professional sports leagues." He added that "any remaining issues or deals can be worked out between the casinos and the leagues." West Virginia officials have "estimated a 90-day window for casinos to get up and running." In addition to the new law, rules and minimum internal control standards "would need to be in place for the casinos to start operating" (WVMETRONEWS.com, 5/14).

LOOKING FOR A HEAD START: ESPN's Ryan Smith said there are a "handful of states out there that have laws going through their legislature to try to get something set up for sports betting." He added those "will be fast-tracked, and they hope to have something by the end of the year" (Golic & Wingo, ESPN Radio, 5/15). In Wilmington, Scott Goss reports state officials are "hoping to quickly make Delaware one of the first states to offer a full slate of sports betting -- a first-to-market advantage that could be boosted by the state already having a gaming infrastructure in place thanks to the parlay betting that has been offered here for a decade." Delaware Gov. John Carney said "full-scale gaming could be available ... before the end of June." That means residents likely would "not be able to bet" on this season's NBA Finals, though gambling on MLB, NASCAR and Wimbledon "could be in play" (Wilmington NEWS JOURNAL, 5/15). In Detroit, Jonathan Oosting notes some state lawmakers "want Michigan to make a quick bet on legalizing the sports gambling industry." Michigan state Rep. Brandt Iden said that bills awaiting action in the House could give the state a "head start in what could be a national race to regulate sports betting." Iden: "If we beat Ohio, Illinois and Indiana, we’re going to have people coming to Michigan for that very reason" (DETROIT NEWS, 5/15). American Gaming Association President Geoff Freeman said that "nearly half the states are prepared to customize sports betting for their purposes without federal interference." Freeman: "The expansion of sports betting is going to be faster than anything we've seen. I'm confident that we can put the illegal market out of business" (USA TODAY, 5/15). ESPN's Doug Kezirian said some states are "sick of being on the sidelines" and they "want in the game" ("SportsCenter," ESPN, 5/15).

EXCITED TO GET STARTED: Minnesota state Rep. Pat Garofalo said that he is "hoping" that his state can legalize gambling "maybe before the NFL season starts." However, the current legislative session is days from adjourning, and Garofalo, a leading proponent of legalizing it, yesterday said that he has "no intention of trying to push anything through at the last minute." That makes the NFL season opener "a long shot" (ST. PAUL PIONEER PRESS, 5/15). In Chicago, Garcia, McCoppin & Keilman note Illinois lawmakers "already have held hearings about how they might legalize sports betting, but it’s unclear whether they can approve legislation by the end of May, when the General Assembly is scheduled to adjourn." Illinois state Rep. Lou Lang said that sports betting should "not be viewed as a 'cash cow,' since it’s likely to generate less" than $100M a year for state coffers. By comparison, the state budget this year "could face a deficit of billions of dollars" (CHICAGO TRIBUNE, 5/15). In Honolulu, Ferd Lewis notes bills that would call for legalized sports betting in Hawaii are "likely to be introduced in next year’s state Legislature." Hawaii and Utah are the two states "without any form of legalized gambling" (HONOLULU STAR ADVERTISER, 5/15). 

PLAYING THE WAITING GAME: In Indianapolis, Mark Alesia reports Indiana state lawmakers "decided during this year's legislative session to wait and see" how sports gambling goes in other states. Casino Association of Indiana President & CEO Matt Bell yesterday said that he "didn't want to make a prediction on when the state would have legal sports gambling." When asked about the earliest it could happen, Bell said, "In the most hopeful case, could you be open by the beginning of the NFL season in 2019, September 2019? Perhaps. But I think we need to be realistic. There are a lot of assumptions built into that date" (INDIANAPOLIS STAR, 5/15). It may be "years before legalized sports betting is a reality" in California. State Rep. Adam Gray said that a "reasonable goal" would be to "finally get the sports betting amendment on the ballot by the statewide primary" in '20. Given the "multitude of gaming stakeholders in California, reaching a consensus on gaming legislation has historically been a difficult ask" (L.A. DAILY NEWS, 5/15). A BALTIMORE SUN editorial states the pressure on Maryland politicians "will now be much greater to put a referendum" on the '20 ballot. The delay "might actually prove to be a good thing." It will allow time to "see what the market for widespread legalized sports betting looks like, to determine what regulatory approach and tax rates work best, and to iron out questions about what kinds of locations for sports betting and how many would be in the state’s best interests" (BALTIMORE SUN, 5/15).

Legal sports gambling in Texas has been a "non-starter for years" with the state Legislature, and residents should not expect such a move "anytime soon" on the issue despite the Supreme Court's ruling that strikes down a federal ban, according to John Gravios of the HOUSTON CHRONICLE. Gubernatorial runoff candidate Andrew White said that "expanding gambling could generate" an extra $3B for "each two-year budget cycle." However, Republicans "still rule the Legislature and all statewide office in Texas, and they're unlikely to budge." Univ. of Houston professor Brandon Rottinghaus said, "The political risks for Republicans to back expansion are high." He added that "any major expansion would have to go before voters, and that's a tough sell in Texas" (HOUSTON CHRONICLE, 5/15). In Dallas, Nicole Cobler reports Texas Attorney General Ken Paxton "hasn't shown any signs of wanting sports betting to be legal in Texas," and he has "been at odds with daily fantasy sports sites for years." Texas allows parimutuel wagering "on horse and dog races and bingo, but efforts to expand gambling since then have gained no traction in the state despite the growth of casinos just across the Oklahoma and Louisiana borders that cater to Texans" (DALLAS MORNING NEWS, 5/15). In Ft. Worth, Mac Engel notes Texas Gov. Greg Abbot and Lt. Gov. Dan Patrick "would/will shoot down" a proposed measure to legalize sports betting "like they are on a duck hunt." Allowing gaming in Texas would "require changes to state law and buck our conventional conservative values." Texas leadership fighting legalized sports betting "is delaying the inevitable" (Ft. Worth STAR-TELEGRAM, 5/15).

OTHER STATES IN NO HURRY: Nebraska Gov. Pete Ricketts yesterday noted sports betting "is illegal in Nebraska and we have no plans to change that” (Lincoln JOURNAL STAR, 5/15). Ohio Casino Control Commission Dir of Communications Jessica Franks said there are "no current policies in place that would allow wagering on sports" in the state. Ohio Gov. John Kasich's administration yesterday released a statement that said, "Expanding gambling has not been a priority for this administration, and that remains unchanged" (Cleveland PLAIN DEALER, 5/15). Utah is "one of two states that currently boasts of outlawing all forms of gambling." State Sen. Rodd Weiler said, "Utah has a long history of deciding that they don’t want gambling. I can’t say what will happen 20 years from now, but I don’t see that changing soon" (SALT LAKE TRIBUNE, 5/15). In Richmond, Graham Moomaw reports there was "little evidence" that Virginia officials were "rushing to bring sports betting" to the state. However, the state has "taken several recent steps to suggest Virginia's tough-on-gambling attitude may be softening" (RICHMOND TIMES-DISPATCH, 5/15). Oklahoma House Majority Floor Leader Jon Echols said, "I don't think it's a foregone conclusion that this is something Oklahoma will do. But the foregone conclusion is that it is something Oklahoma will analyze" (OKLAHOMAN, 5/15).

INDECISION IN MASSACHUSETTS: Massachusetts Gov. Charlie Baker and Democratic state legislative leaders said that they "discussed the high court ruling and its potential ramifications for the state during their regularly scheduled weekly meeting." However, none of them were "willing to commit to a pathway for legally wagering on sports events, with Baker saying a lot more 'homework' needed to be done on the issue" (AP, 5/14). In Boston, Andy Rosen notes Baker did "not indicate whether he favors legalizing gambling on sports events." Baker said it is "something we'll be talking to our colleagues in the Legislature about, probably starting today" (BOSTON GLOBE, 5/15). Additionally, it "remains unclear" whether state Attorney General Maura Healey, who "opposed online gambling, plans to fight sports betting" in the state (BOSTON HERALD, 5/15).

STATE NOTES: Washington State Gambling Commissioner Chris Stearns said that changing the state’s "tough anti-gaming laws would require a two-thirds supermajority in the Legislature or a referendum." Stearns said that he has "yet to detect a groundswell of support for such change but acknowledged that could happen" in light of the Supreme Court's ruling (SEATTLE TIMES, 5/15). Kentucky Senate Majority Leader Damon Thayer said that he did "not know whether the Kentucky Constitution would need to be amended to provide expanded gambling." The state's General Assembly will "not be in session until January, and only the governor can call a special session" (Louisville COURIER-JOURNAL, 5/15). Florida has a "compact with the Seminole Tribe that gives them a monopoly on card games like blackjack, but the future of the agreement is in limbo, and sports betting could add a new element to negotiations" (South Florida SUN SENTINEL, 5/15). The Arizona Department of Gaming released a statement yesterday saying that all sports betting "will remain illegal until further action is taken at the state level." A spokesperson "described the decision as 'business as usual' for Arizona" (ARIZONA REPUBLIC, 5/15). USA TODAY provides a state-by-state guide to sports betting legislation amid the SCOTUS ruling.