Congressional committee hearing on sports betting concludes

Thursday’s House of Representatives’ Judiciary Committee’s Subcommittee on Crime, Terrorism, Homeland Security, and Investigations hearing on whether the US federal government should be involved in the emerging liberalised sports betting market took just 90 minutes to conclude, with anti-gambling spokespersons generally outnumbering the more rational presentations.

Much of the debate centred on whether regulation of sports gambling should be largely enforced by the federal government or left to individual states, and there seemed to be little doubt from Republican chairman Jim Sensenbrenner’s opening comments that he favours federal involvement.

Expert witnesses gave testimony under oath (and some of them were stretching credibility with their statements and opinions)

Representatives for sports data companies and bookmaking enterprises were among the hundred or so people in attendance, listening as Sensenbrenner laid out three potential future results of the hearing, saying:

“One option, of course, would be for Congress to re-enact a federal ban on sports gambling. Another possibility would be for Congress to defer to the states and allow them to legalize and regulate the sports gaming business. … And a third option would be for Congress to adopt uniform, minimum federal standards, which would guide the imposition of sports wagering across the nation, in states that desire to legalize the practice.”

Arch online gambling opponent, Republican politician and author of the Unlawful Internet Gambling Enforcement Act (UIGEA), Rep. Bob Goodlatte focused on the harm that gambling goes to society and families, and tried to portray himself as a respecter of states’ rights whilst at the same time declaring that modern technology was making it impossible to properly enforce regulation at state level.

He appeared to believe contrary to an overwhelming body of evidence and empirical experience that geo-location technology is not effective.

Goodlatte’s solution would be to “modernize” the Wire Act and properly enforce UIGEA, judging by his remarks.

The NFL’s veep for communications and public affairs, Jocelyn Moore, hewed to the now well-worn company line that the league should control all sports betting data, that federal involvement is necessary (despite Nevada successfully running sports betting at state level for decades without federal help) and a plea for the authority to control operator use of its intellectual property and betting integrity.

Moore used the word “integrity” 24 times in her seven-page written testimony. She urged Congress to limit legal gambling to those 21 and older, require operators to use official data from leagues and bar risky bets on in-game action.

Stop Predatory Gambling’s Les Bernal had little new to offer from his usual lengthy diatribe against gambling and the involvement of US states, and he was followed by the fact-based presentation of American Gaming Association VP for public affairs Sara Slane, who observed that by experience, state regulation and practise tribal groups and individual states have already demonstrated that they are full adapted to regulate and enforce compliance in the sports betting context, without the need for federal involvement.

Slane argued that there was “no need to overcomplicate or interfere with a system that is already working” and suggested that there was no requirement for federal involvement in sports data deals between leagues and operators, which should properly be the subject of negotiation between leagues and operators.

One of the more aggressive witnesses was Coalition to Stop Internet Gambling councillor, lawyer and former Nebraska AG Jon Bruning, although he leaned heavily on the standard misinformation touted by almost all CSIG speakers in the past, even to the rather theatrical brandishing of a cellphone as the “casino in your pocket”.

Bruning was critical of what he sees as a lack of enforcement on UIGEA and the Wire Act and touted for a return to the original pre-2011 Wire Act and its outdated and misinterpreted 1961 pre-internet provisions. He went a little off track with attacks on online gambling, which he claims is particularly vulnerable to organised crime, terrorism and money laundering – all staple CSIG contentions.

He also incorrectly characterised PokerStars as still a fugitive from US law that has been granted licensing by New Jersey, ignoring the huge DoJ settlements reached by the poker provider and the fact that the ownership has long changed.

Bruning was of the view that the strike down of PASPA notwithstanding, sports betting remains unconstitutional, saying:

“Even though the Supreme Court tossed the federal sports betting ban, online sports betting is still illegal. The Wire Act applies to all forms of gambling and even under DOJ’s current interpretation; the Wire Act applies to sports betting. This means sportsbooks wanting to hedge their risk by establishing a national pool, creating interstate compacts, or laying off bets across state lines – all would do so in violation of the Wire Act.”

The chair of the Nevada Gaming Control Board, Becky Harris, pointed out that Nevada has been dealing with legal wagering for decades without any problems…or federal involvement.

She cautioned that the imposition of overly ambitious federal regulations would hamper licensed operations from providing a fair, legal and sound alternative to offshore illegal operators, and predicted that the status quo prevailing currently will continue to enable sports betting to grow and evolve in a safe and effective industry.

“We’ve been in this business for decades and not had any problems,” Harris emphasised. “What we have here is a regulatory process specifically to monitor what happens on both sides of the counter. This is all we do, and we’re good at it.”

After a Q&A session which mainly served to show that sub -committee lawmakers do not have a full and adequate grasp of the sports betting or indeed gambling issues, little that was fresh and new had emerged and Sensenbrenner adjourned the hearing.

He made the point that the purpose of the exercise was to improve lawmakers’ information but managed to insert a further call for federal involvement by commenting that federal inaction at this point was the worst possible scenario, and that there is a need for federal lawmakers to initiate both short-term and more lasting “solutions”.

Forbes offered one of the best summaries of the hearing, which can be found here.