By Justin Mignogna and Gregory Bailey.
The U.S. Senate Committee on the Judiciary met on Tuesday, December 17, 2024 to hold a hearing entitled “America’s High-Stakes Bet on Legalized Sports Gambling” in order to address the impact of the rapid expansion and proliferation of sports betting across the country. One central question at the hearing was whether the federal government needs to play a part regulating sports betting, despite the Supreme Court’s ruling that the states have the authority to govern sports betting. See Murphy v. NCAA, 584 U.S. 453 (2018).
The hearing was rife with concerns over the current state of sports betting across the country, including concerns over: prop bets in college athletics, “negative” sports bets (e.g., interceptions, missed free throws), data collection from consumers, consumer protections from the dangers of gambling, protecting the integrity of sports as a whole, and protecting athletes—notably student athletes—from harassment from gamblers.
The hearing comes on the heels of a bill that was introduced earlier this year called the Supporting Affordability and Fairness with Every Bet Act (“the “SAFE Bet Act”), by Representative Paul Tonko (NY) and Senator Richard Blumenthal (CT).
The proposed legislation seeks to implement minimum federal standards for states to follow, including with respect to advertising, affordability, and artificial intelligence (“AI”) to create safer products, as well as address the public health implications caused by the rapid growth in legalized sports betting in recent years. The Safe Bet Act proposes inter alia that:
- States that wish to offer sports betting must submit an application to the Attorney General of the United States
- Sports betting broadcast advertising is prohibited between 8 a.m. and 10 p.m. local time
- Sports betting broadcast advertising is prohibited during live sporting events
- Sports betting broadcast advertisements designed to induce gambling with “bonus”, “no sweat,” “bonus bets,” or odds boosts, or similar promotions are prohibited
- Sports betting advertising designed to induce use of gambling products by showing audience how to gamble or explaining how wagers work is prohibited;
- Operators are prohibited from accepting more than five (5) deposits from a customer in a 24-hour period
- The use of AI to track individual player’s gambling habits is prohibited
- The use of AI to create individualized offers and promotions to customers is prohibited
- The use of AI to create gambling products such as microbets is prohibited
A summary of the Safe Bet Act can be found here.
In his opening statement, President of the NCAA, Charlie Baker, stated that there have been several instances of student athletes being harassed and threatened, including athletes receiving death threats by sports bettors based on their in-game performances. In response, the NCAA has been and continues to successfully lobby states to eliminate prop bets in college athletics in order to decrease the chances that student athletes will be targeted individually by bettors, whether it be in person, or online via social media.
Panelists Keith Whyte, Executive Director of the National Council on Problem Gambling, and Dr. Harry Levant, Gambling Therapist and Director of Gambling Policy with the Public Health Advocacy Institution at Northeastern University, focused on the growing problem with gambling addictions, advocating for restraints on advertising and marketing including the use of AI and how operators may target gamblers and offer constant action, as well as advancements in limitations for live bets during games.
Notably, the only industry insider who testified was David Rebuck, former Director of the New Jersey Division of Gaming Enforcement. Mr. Rebuck advocated that the states, not the federal government, were in the best position to legislate sports betting. In support of his position, Mr. Rebuck provided that consumer protection is key and that several states have recently legalized sports betting because citizens of these states have acted by expressing support for the same and that citizens want to engage in the freedom of engaging in sports betting. Mr. Rebuck noted federal oversight is not needed, but instead, the states and federal government need to collaborate together, and that although there are risks with advertising, illegal operators, and concerns for college betting, these are issues already shared with the states, who address these problems based on their own individual regulatory frameworks.
Absent from the hearing were any current industry representatives. American Gaming Association Senior Vice President Joe Maloney issued the following statement on this, noting that:
“Today’s hearing notably lacked an industry witness. This unfortunate exclusion leaves the Committee and the overall proceeding bereft of testimony on how legal gaming protects consumers from the predatory illegal market and its leadership in promoting responsible gaming and safeguarding integrity. We remain committed to robust state regulatory frameworks that protect consumers, promote responsibility, and preserve integrity of athletic competition.”
The hearing was instructive in that it showed how federal lawmakers perceive the current sports betting industry, and that this topic has peaked the interest of lawmakers in Washington. However the federal government’s interest in regulating the industry, even with minimal standards, is likely to receive pushback from the state agencies authorized to govern sports betting within their respective states. The hearing concluded with Chair of the Committee, Senator Dick Durbin (IL) aptly observing that this hearing on sports betting was not the end of this discussion but only the beginning. This proves especially true given the fact that the next time the Senate Judiciary Committee will meet will not be until the next legislative session under a different administration and new makeup in Congress.