In the wake of a U.S. Supreme Court ruling striking down a ban on sports betting, state gambling regulators are fighting suggestions by major sports leagues that gambling should be overseen at the federal level.
A statement issued this week on behalf of four state regulators by the International Center for Gaming Regulation at the University of Nevada, Las Vegas, concludes that “coordinated action among jurisdictions” — states and tribal agencies — is the key to stopping illegal betting and possible corruption of the sports themselves.
Although the regulators welcomed “strong support from federal-level enforcement agencies,” they took a direct swipe at the leagues, several of which have suggested that betting houses pay a fee to the leagues for the right to use their data for gambling. The leagues have suggested that the fee would also help pay for new measures to protect against things like match mixing and improper wagering.
“The so-called ‘integrity fee,’” the statement said, would “increase the costs of legal sports betting, siphon much-needed tax revenues away from state coffers, and increase state regulatory burdens.”
Although the statement was signed only by the gaming control commissioners of four states — Louisiana, Nevada, Massachusetts and Michigan — other states also appear to be at odds with the suggestion of federal oversight.
“We strongly believe in a regulatory body in conjunction with other states, and believe that could work much better than the federal government taking over the reins,” said Raymond J. Lesniak, a former state senator in New Jersey who was heavily involved with the case that went to the Supreme Court. As for the integrity fee, Lesniak said, “We have been very clear: We’re not going to pay one dime of tribute to the leagues.”
James Kilsby, managing director of Gambling Compliance, an independent research service, said that states see suggestions that sports betting fall under federal control as an encroachment on states’ rights.
“All forms of gaming have historically been regulated at the state level,” Kilsby said. “I think you’re going to see the gaming industry be extremely reluctant to bend on that issue.”
On Monday, Roger Goodell, commissioner of the National Football League, issued his own statement on the issue. “We are asking Congress to enact core standards for states that choose to legalize sports betting,” Goodell said. The standards, he said, should include protections for consumers, and for the league’s “content and intellectual property,” as well as assurances that fans receive reliable data and that law enforcement is able to pursue “bad actors” — presumably those who attempt to fix games.
Current forms of illegal sports betting usually involve a website or an internet-connected device, with data on scores and other statistics passing freely over state and international boundaries — which supports the argument that, when such betting becomes legal, a federal entity should be involved.
In a statement, a spokesman for Major League Baseball said it was disappointed that state regulators had publicly expressed views on the issue “without even soliciting the views of other stakeholders, such as sports leagues, governing bodies, and universities.” The spokesman called criticisms of the integrity fee “casino propaganda,” adding that “the fee actually would be paid solely by the casinos and would have no negative impact on state tax revenues.”
The spokesman added that baseball “would support regulation of sports betting by the states, but only if the states enact statutes and regulations that protect the interests of all stakeholders, not just the casinos.”
“Proposals like the one out of Las Vegas,” the spokesman said, would force baseball “to seek federal regulation of sports betting.”
The first sports-gambling regulation laws that states pass are likely to tie betting, even online, to brick-and-mortar establishments like casinos and horse tracks in the states. A bettor with that establishment would have to be physically within that state, no matter how the bet is placed.
States have been regulating that kind of activity, including state lotteries and slot machines, for decades, said Sara Slane, senior vice president for public affairs at the American Gaming Association, an industry group.