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Hatch-Schumer Legislation Would Regulate Sports Betting

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A bi-partisan bill that would put federal regulations on sports betting across the U.S. was introduced Wednesday in the Senate by Sens. Orrin Hatch (R-Utah) and Charles Schumer (D-NY).

The Sports Wagering Market Integrity Act of 2018 intends to put guardrails on the burgeoning sports betting industry by charging the Department of Justice with setting standards for US states wanting to legalize sports betting.

Both the NFL and the NCAA issued statements of support for the legislation.

The bill contains similar language in Hatch’s draft legislation that surfaced earlier this month and follows the same principles in a federal framework Schumer released in August that seeks “safety measures to protect consumers, preserve the integrity of sporting events, and ensure the propriety of the sports wagering market.”

The bill does not address “integrity fees,” where professional sports leagues would get a portion of the betting revenues.

The legislation was prompted by the U.S. Supreme Court overturning the Professional and Amateur Sports Protection Act (PASPA) which banned sports gambling. Hatch was a co-author of PASPA.

Since the court ruling in May, seven states have implemented full-scale legalized sports betting beyond Nevada, which has had some form of gambling since 1931. Two more states have passed legislation and are poised to launch sports betting early in 2019 and more than a dozen other states have bills introduced that are making their way through their legislatures. It is predicted up to 30 states will consider sports betting legislation next year.

“This bill is the first step toward ensuring that sports betting is done right in the states that choose to legalize it. Just as importantly, it provides protections for states that choose not to go down that path,” Hatch said in a news release. There is much work to be done, but I hope this bill will serve as a placeholder for the next Congress, should they decide to continue working to address these issues.”

This is likely one of Hatch’s last acts as a U.S. senator; he is retiring after serving more than 40 years in Congress.

The American Gaming Association, which supports states' rights over federal oversight in sports betting, expressed opposition to the bill.

“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,” said Sara Slane, senior vice president of public affairs for the American Gaming Association.

The Hatch-Schumer legislation would:

  • Permit states to authorize online sports wagering to provide a regulated alternative to the illegal, offshore market
  • Prohibit sports wagers on amateur sporting events except the Olympics and college sports
  • Prohibit sports wagering by individuals younger than 21; athletes, coaches, officials, and others associated with sports organizations; and individuals convicted of certain federal crimes related to sports wagering
  • Establish to request restrict certain sports wagers when necessary to protect contest integrity
  • Require that sports wagering operators use data provided or licensed by sports organizations to determine the outcome of sports wagers through 2024, and set requirements for data used thereafter
  • Update existing casino anti-money laundering laws to include sports wagering operators
  • Provide a process whereby states may compact with each other to permits interstate sports wagering
  • Designate a non-profit National Sports Wagering Clearinghouse to receive and share anonymized sports wagering data and suspicious transaction reports among sports wagering operators, state regulators, sports organizations, and federal and state law enforcement
  • Update the Wire Act to permit certain interstate sports wagers, while also providing additional enforcement authorities such as a state cause of action and a new mechanism for the Department of Justice to target unlicensed, offshore sports wagering websites. 

Click here to read the full text of the Hatch-Schumer legislation.

“Additional areas this bill seeks to address – including the mandatory use of official league data and the creation of a national sports wagering clearinghouse – can, and should, be decided by marketplace negotiations between private businesses and cooperative agreements among jurisdictions,” Slane said.  “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.”

The NFL welcomes federal oversight.

“The Sports Wagering Market Integrity Act reaffirms the long-standing commitment of Congress to protecting the integrity of American athletics. We appreciate the bipartisan leadership demonstrated by Senators Hatch and Schumer in bringing forth this commonsense legislation, and we urge its swift enactment,” Jocelyn Moore, executive vice president of the NFL, said in a prepared statement.