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New Jersey’s former top gaming regulator and a key Massachusetts legislator have pushed back on accusations by federal lawmakers that states' sports-betting regulatory regimes are “faint-hearted and half-baked.”
The description came from Senator Richard Blumenthal of Connecticut during his introduction of the so-called SAFE Bet Act, a bill that would impose strict new restrictions on the sports-betting industry, including heavily restricting advertising and banning in-play wagering.
The comments did not sit well with those who were at the ground floor crafting legislation and regulatory standards in recent years.
“That kind of flies in the face of all of us who put so much time into crafting legislation that we thought was meaningful,” said Massachusetts state Representative David Muradian, a Republican legislator who helped shape Massachusetts’ sports-betting law in 2022.
“It reminds me of the fact that we have two ears and one mouth, and, you know, we should probably listen to the feedback, see what's going well, and not necessarily say that, hey, we know better than you.”
David Rebuck, former director of the New Jersey Division of Gaming Enforcement, said the comments by Blumenthal send “a very adversarial message” to the states.
“I think on their part, it’s a knee-jerk reaction,” Rebuck said. “Certainly their staffers may not be as informed of the details of what is working and what is trying to be done, not only by the industry, by the states.”
“And you know, the timing of this is very interesting to me, why this comes out now,” he said. “Because it really adds no value to what has been identified and is online constantly by people looking at things like responsible gaming and the efforts to enhance and do a better job with advertising.”
Rebuck added that there were already avenues for the federal government to improve gaming standards under their jurisdiction, such as tribal gaming through the National Indian Gaming Commission and enforcement of illegal gaming operations through the Department of State and Department of Justice.
He also cited the recent controversy over wagering on elections that has surfaced following a federal court ruling in favor of financial exchange and prediction market Kalshi, which effectively permits election betting contracts.
“Every state in the nation was approached to have election wagering, and we all denied it,” Rebuck said. “The federal government was asleep at the switch and now you have election wagering that came into play under commodities trading, and now the federal government finds themselves saying, ‘oh my god we’ve got to stop this, now what are we going to do when we’re in court’.
"It's mind-boggling to me, in that the arrogance of saying we know more than you do, without working on things together that we have already reached out to them to work on to make things better for all the citizens in all the states that have legal sports wagering,” Rebuck added.
Cory Fox, vice president of government affairs for FanDuel, added that the ability to advertise is what sets regulated sportsbook operators apart from illegal offerings.
“That is one of the rights that we get along with being a regulated operator in our country, and so it really would cut down on our ability to acquire users into the regulated and taxed market, away from the illegal market,” Fox said of the proposed federal restrictions.
In addition, Fox said, the increased federal oversight regarding internal controls creates confusion among operators and customers, the exact confusion that was cited during the U.S. Supreme Court’s 2018 decision to invalidate the Professional and Amateur Sports Protection Act.
“There's a lot of nuance to all of those controls, and what's appropriate now might not be appropriate in six months or a year or 18 months,” Fox said.
“And so when we went back to a state regulator to negotiate with them about what are the controls, how they might be changed in the future, who are we negotiating with? Are we negotiating with them, or are we negotiating with the Justice Department, and does the Justice Department have the ongoing oversight function that makes any sense?”
The comments from the three on the SAFE Bet Act and other topics came during a panel discussion moderated by Vixio GamblingCompliance last week as part of the “Power Lunch Summit” hosted by online gaming trade group iDEA and GeoComply.
“I do think when you do a federal model in things like this, it kind of limits the states to understand their demographic, to understand their constituency, and to understand what could possibly work,” Muradian added.
“Obviously, we have to make sure that there are safeguards in place, and if you know, the federal government sees that legislatures individually are not acting in the safety of the general public, then obviously there needs to be someone to step in.
“But I think ultimately leaving it to the individual states to decide is probably the best bet.”
