U.S. Sports-Betting Violations Could Put Industry On Congress' Radar

August 10, 2023
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Perhaps the greatest fear of the U.S. gaming industry is federal regulation but the National Football League’s ongoing struggle to prevent sports-betting violations by its players and the controversy surrounding compensation for college athletes could open the door for Congress to intervene.

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Perhaps the greatest fear of the U.S. gaming industry is federal regulation but the National Football League’s (NFL) ongoing struggle to prevent sports-betting violations by its players and the controversy surrounding compensation for college athletes could open the door for Congress to intervene.

Nothing is going to happen soon because Congress is on its summer break until after the Labor Day holiday on September 4 and a shutdown of the federal government on October 1 appears increasingly likely due to a budget dispute.

In an August 4 letter to Representative Dina Titus of Nevada, NFL vice president for public policy and government affairs Jonathan Nabavi said: “Congress and the federal government have a unique role to play in bringing enforcement actions against illegal operators.”

The NFL was responding to a June 15 letter Titus sent to the NFL and other sports leagues seeking clarification of the leagues’ sports-betting policies following recent suspensions of players for violations.

After receiving the NFL’s response, Titus, a Democrat whose congressional district includes the Las Vegas Strip, expressed her annoyance about the NFL’s focus on illegal operators, noting the “reported violations involving players happened at regulated sportsbooks.”

Titus, who is co-chair of the Congressional Gaming Caucus, seemed less perturbed by the July 12 response of National Collegiate Athletic Association (NCAA) president Charlie Baker, who said he appreciated “Congress’ increased attention” to sports betting.

In June, Baker appeared at “The Future of College Sports” event at the University of Arizona and said college sports must capitalize on the expansion of sports betting in states across the nation.

“That’s a major opportunity right in front of us,” Baker said, according to Sportel.

“We have a major opportunity to get into the sports-betting space,” said Baker, who became the NCAA president in March after serving two terms as the Republican governor of Massachusetts during which time he supported legalization of sports wagering and eventually signed a bill into law.

“Anybody who has a phone [is] able to bet from any place they want and two-thirds to almost three-quarters of all people between the ages of 18 and 22 [are] betting on sports,” Baker claimed.

The NCAA declined a request by VIXIO GamblingCompliance to talk to Baker or any other NCAA official about the organization’s plans regarding sports betting.

Marc Edelman, a law professor at Baruch College in New York City, said Congress has more important priorities than regulating sports betting.

“There are 32 very profitable businesses [teams] in the NFL, and as long as they are selling data to sportsbooks and forming partnerships with sportsbooks, they should be able to regulate sports betting on their own without putting the burden on the American taxpayer,” Edelman told VIXIO.

The American Gaming Association (AGA) acknowledged an ongoing dialogue with federal lawmakers but remains wary of federal regulation.

“The AGA communicates regularly with Capitol Hill to ensure Congress understands our industry’s priorities, economic impact and our commitment to responsibility,” said Chris Cylke, the AGA's senior vice president of government relations.

“There is broad recognition among federal policymakers that state gaming regulators are capable of providing effective oversight of sports betting and ensuring safe channels for Americans to engage in this form of entertainment.”

Cylke said increased federal oversight would be redundant at best.

“The federal government should focus on where their attention is needed — illegal gambling. We are working with Congress and federal law enforcement to go after these bad actors, who are not subject to any regulation, and are encouraged by the receptiveness and support we’ve received from the Hill on this issue.”

In another potentially worrisome development for the gaming industry, Southeastern Conference commissioner Greg Sankey on July 17 said there is “an urgent need” for Congress to regulate compensation for the name, image, and likeness (NIL) of college athletes.

“Only Congress can adequately resolve these issues,” Sankey told reporters in Nashville, Tennessee during a media day for his conference.

Just three days later, three U.S. Senators, including college betting hawk Richard Blumenthal, a Democrat from Connecticut, unveiled draft legislation to create a non-governmental group with investigative and subpoena authority to oversee NIL compensation.

Three other NIL bills also have been introduced in Congress this year, but none so far have addressed sports betting and college sports directly.

Edelman said efforts to regulate NIL compensation could violate the federal Sherman Antitrust Act of 1890, which aims to preserve free and unfettered competition in the marketplace.

“It is a disgrace for these coaches and athletic directors, who have become multi-millionaires off the backs of college athletes and their labor to restrict their compensation,” Edelman said.

“This discriminates against the poor and minorities, and if we allow this to continue, it will be one of the great wrongs of our generation.”

Meanwhile, a bill in the U.S. House of Representatives to prohibit advertising for sport-betting appears to be dead in the water.

Six months after being introduced on February 9 by Democratic Congressman Paul Tonko of New York, the bill has yet to gain a single co-sponsor.

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