It has been four and half years since the Supreme Court overturned the 1992 Professional and Amateur Sports Protection Act. The case in question was Murphy v. National Collegiate Athletic Association.
Phil Murphy was the governor of New Jersey. Under the previous governor, Chris Christie, New Jersey had passed sports betting legislation. It was, however, not legal under federal law. Christie, then later Murphy, sued, claiming the federal government had overreached its authority. In May 2018, the Supreme Court concurred that sports betting is one of the rights reserved for the states, a state’s-rights issue.
That decision opened a flood gate of legalized sports betting. Now, 38 states have legal wagering, and 30 allow online or mobile wagering. According to Legal Sports Report, since 2018, $389.8 billion has been wagered on sports, resulting in $33.2 billion in revenue and $6.1 billion in taxes paid to state and local authorities.
The explosion of sports betting captured the attention of sports fans, the media, and nearly everyone else. It has been particularly conspicuous in states with online betting; the major players DraftKings and FanDuel, as well as several others, have been highly visible in those states. They are advertising at every opportunity on every sporting event. The ever-present advertising has drawn a great deal of criticism.
The attention is not new to FanDuel and DraftKings; they’ve publicly been at each other’s throats for years. The two burst on the scene on Monday Night Football in September 2015. They were fighting for market share in fantasy sports. That first month, each was spending upward of $20 million a week on advertising. The spending frenzy produced thousands and thousands of new subscribers, but nothing resembling a profit. Fantasy sports appeared to be designed to displace the actual events. The television advertising resulted in many legal challenges. The fantasy sports bubble did not exactly burst, but it was reined in by numerous district attorneys.
While the unfavorable attention might be the same, this time around, sports betting has many more supporters. In New York alone, the bookies pay $50 million to $100 million in taxes a month. The taxes generate a lot of support for legal wagering. And with over a billion dollars a month wagered in the Empire State, a great many sports fans stand firmly behind the betting. Yet, those same numbers are also attracting the attention of a wide variety of gambling opponents. The constant advertising is an irritant to millions, even the supporters of legal sports betting. The very size of sports wagering has triggered the concerns of “problem-gambling” interests. They argue that sports betting is reaching into vulnerable peoples’ lives in a way that nothing had before.
Those factors have combined to produce a proposal for federal legislation to control and limit legal sports betting. ESPN broke the story on September 12. According to ESPN, the Supporting Affordability and Fairness with Every Bet Act or SAFE Bet Act was proposed by Senator Richard Blumenthal (D-CT) and Representative Paul Tonko (D-NY). Again according to ESPN, the SAFE Bet Act would establish a nationwide ban on sports betting, requiring all states with sports betting to apply for federal approval. The Act goes further, seeking to limit the amount of each wager, restrict the number of times a bettor can wager, and reduce the number of betting propositions, along with other measures to curtail wagering on sports.
Needless to say, the gaming industry will be united against the proposal. It represents a major reversal of the Supreme Court decision and a challenge to all gaming regulation.
Gambling in all of its various forms is and has been a matter left up to the states since the foundation of the Union. During the Revolutionary War, several states used lotteries to raise funds to support their war efforts.
The SAFE Bet Act would not directly attack any other form of gaming. It does, however pose the possibility that if the federal government can control sports betting, putting states in a subordinate position, might it not at some time in the future do the same for horse racing, lotteries, and casino gaming?
The authority to forbid or authorize and control an activity or behavior lies at the heart of many of the most controversial issues of our time. Gun control and abortion are examples. The issue of state’s rights versus federal control is never easy. It is not even easy to define as the core issue. It is highly unlikely that this effort will result in federal sports betting legislation. But the threat of such legislation should be enough to alert every proponent of commercial gaming. This represents a clear and present danger to the entire gaming industry.
