The reaction from gaming industry leaders and their allies to a proposal that would give the federal government regulation oversight of the nation’s growing sports gambling industry was what you might expect.
“This bill is the epitome of a solution in search of a problem, representing an unprecedented and inappropriate expansion of federal involvement in the gaming industry, which is currently one of the most strictly regulated in the country,” Sara Slane, senior vice president of public affairs for the American Gaming Association, said after two U.S. senators introduced the legislation Wednesday.
The Washington D.C.-based AGA, which supported New Jersey in the state’s years-long court battle to overturn a 1992 legislative Act that restricted single-game sports betting to just Nevada, said states and tribal governments successfully oversee all aspects of legal gambling.
“Across the country, nearly 4,000 dedicated public servants already regulate all forms of gaming, including sports wagering, with more than $500 million committed to ensuring the integrity of commercial casinos’ operations and $822 million spent on regulation of tribal gaming in 2015 alone,” Slane said. “These state and tribal regulators have decades of experience effectively overseeing gaming operations within their jurisdictions.”
The bill introduced by Sen. Charles Schumer, a New York Democrat, and Republican Sen. Orrin Hatch of Utah would have the U.S. Justice Department set minimum standards for states to offer sports betting. It does not explicitly provide the sports leagues the cut of gambling revenue they have been seeking, so-called “integrity fees,” but does not prohibit them, either.
Hatch, who is retiring from the senate, said when the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act in May, he began working to “ensure we were doing everything possible to protect the integrity of sports from corruption.”
Slane said many of the areas addressed in the bill, including the mandatory use of official league data and the creation of a national sports wagering clearinghouse, should, be decided by “marketplace negotiations” between private businesses and cooperative agreements among jurisdictions.
“In the mere six months since the U.S. Supreme Court paved the way for legal, regulated sports betting, significant developments on both of these fronts have already occurred without any federal involvement,” Slane said.
Since May’s Supreme Court ruling opened the rest of the U.S. to join Nevada in legalizing sports wagering, six states – Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania and Rhode Island – passed regulations allowing sports books to open at casinos and race tracks. New Mexico allowed an Indian casino to open a sports book under its compact with the state. On Tuesday, the city council in Washington D.C. voted to allow the district’s lottery to operate sports betting.
Nevada gaming regulators have overseen sports betting since the 1960s. The sports book industry, operated by the casinos, now handles nearly $5 billion annually in wagers.
The state’s congressional delegation jumped to into a quick defense of the market, saying they opposed any federal intervention into the Silver State’s primary industry.
“This bill undermines Nevada’s expertise and experience in establishing a successful, regulated sports betting market,” said Rep. Dina Titus, D-Las Vegas. “It would inject uncertainty into an established and regulated industry, weaken Nevada’s ability to promptly adapt to maintain its gold standard, and risk causing bettors and operators to leave the regulated market.”
Titus, whose district includes the Las Vegas Strip, said Congress “should be cautious not to reinvent the wheel” and potentially derail a successful regulatory system.
“I fear this legislation is a step in that direction,” Titus said. “I will continue to work to ensure that those in Congress know that gaming is an important Nevada issue, and that our concerns must be taken into account.”
Nevada Governor-elect Steve Sisolak agreed with Titus.
“Nevada is the gold standard when it comes to successfully regulating the gaming industry,” Sisolak said. “It’s a process that should continue to be done diligently, vigilantly, and at the state level.”
Current Nevada Governor Brian Sandoval, a past chairman of the Nevada Gaming Commission, also opposes any federal regulation on legal sports betting, said spokeswoman Mary Sarah Kinner.
“As he’s said many times before, Nevada is the gold standard in gaming regulation and the Silver State has a comprehensive regulatory structure that has been refined over decades, with the highest level of integrity in the process,” she said.
Sandoval leaves the governor’s office in January after two terms
A spokeswoman for Rep. Jacky Rosen, D-Las Vegas, who was elected to the U.S. Senate in November, said the congresswoman, “believes that our gaming industry is pivotal to the success of Nevada’s economy. That’s why she will continue working with industry leaders to ensure Nevada’s regulated sports betting remains a strong part of our local gaming revenue.”
A spokesman for Sen. Catherine Cortez Masto, D-Nevada, said the senator was still reviewing the proposed legislation and didn’t have a comment Wednesday.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
