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New federal legislation introduced in the U.S. Congress on Thursday (September 12) proposes a radical redrawing of the regulated sports betting market by banning all in-play bets, mandating affordability checks, and severely restricting marketing practices.
Introduced by New York Representative Paul Tonko in the House and Connecticut Senator Richard Blumenthal in the Senate, the so-called SAFE Bet Act is generally in line with a summary that was earlier released by Tonko’s office back in March.
Still, the full version of the legislation also adds various new provisions that were not flagged in that memo, including establishing a blanket ban on all in-play betting by prohibiting state regulators “from approving, or a sports wagering operator from accepting, a sports wager on any sporting event, once such event has commenced”.
That prohibition is one of several minimum federal standards that states would have to meet for their licensing and regulatory regimes to be exempted from a newly instituted general federal prohibition on sports betting, which would become effective after a one-year grace period.
On advertising, the SAFE Bet Act would require U.S. states’ regulations to follow those of the UK, Australia and various other European markets by banning any ads for sports betting broadcast during daytime hours or during live sports events.
The new bill would also require states to follow the likes of the UK and the Netherlands in introducing formal “affordability” requirements, obliging operators to ensure that bettors are not gambling beyond their means.
Like on advertising, the affordability provisions were already telegraphed in the memo from Tonko’s office earlier this year.
However, the bill introduced on Thursday provides extra details by specifying that affordability checks would kick in for players betting more than $1,000 in 24 hours or $10,000 within 30 days.
Operators could satisfy the affordability requirements either by verifying that the amounts being deposited by the player do not amount to more than 30 percent of their monthly income, or by applying a “reasonable lender standard” typically used by U.S. banks when issuing unsecured loans to consumers.
The SAFE Bet Act would further prohibit bettors from making deposits with credit cards, as is already prohibited in at least six states, or from making more than five deposits per day, which is not included in any state regulations to date.
State regimes also would have to ensure that operators cannot use artificial intelligence “to track the sports wagers of an individual, create an offer or promotion targeting a specific individual, or create a gambling product, such as a microbet”.
Hatch-Schumer Bill Revisited
The new federal bill is not exclusively focused on Tonko’s proposed responsible gambling protections, however.
In large parts, the SAFE Bet Act appears to copy and paste provisions directly from a December 2018 Senate bill that was co-sponsored by the current U.S. Senate Majority Leader, Chuck Schumer of New York, alongside the now-retired Republican Senator from Utah, Orrin Hatch.
That includes language to establish a national mandate for the use of official league data, even though, as per the initial Schumer bill, the mandate would expire at the end of 2024 and leagues have largely already achieved that lobbying objective at the state level, expressly for in-play wagers that the SAFE Bet Act would now seek to prohibit.
Also copying language from the earlier Senate legislation, the SAFE Bet Act would prohibit states from licensing any operators that illegally accepted bets in the U.S. after the federal Unlawful Internet Gambling Enforcement Act was enacted in 2006.
Elsewhere, the new federal bill references the prospect of states entering into sports wagering compacts but it does not appear to include accompanying language from the prior Hatch-Schumer bill to make conforming changes to the federal Wire Act to enable interstate betting.
Yet another recycled provision in the legislation would specify that tribes could offer state-wide mobile sports betting via servers on Indian lands subject to a tribal gaming compact.
That was a highly relevant question of federal law in late 2018 but has become less so after a landmark 2021 compact between the Seminole Tribe and the state of Florida was upheld in federal courts.
The prospect of tribal gaming compacts including state-wide mobile sports betting was also recognized through new federal regulations adopted by the U.S. Department of the Interior earlier this year.
