[toc]The Gaming Accountability and Modernization Enhancement Act, or GAME Act, introduced by Congressman Frank Pallone Jr. (D-NJ), proposes a federal role in authorizing state regulated sports betting.
Pallone introduced the bill on Dec. 4, prompted by the US Supreme Court hearing arguments that the Professional and Amateur Sports Protection Act (PASPA) should be ruled unconstitutional. The case was brought by New Jersey. The state wants to repeal its own state laws prohibiting sports betting.
Most commentators in court felt that the justices were learning towards ruling in favor of New Jersey. If SCOTUS largely overturns PASPA, then the federal government will not have any concrete legislation regarding sports betting.
According to Pallone’s official website,
“The GAME Act is intended to remove the federal obstacles to legalized gambling at the state level. It does not create a federal framework for gambling and instead allows states that choose to legalize and regulate sports betting and/or online gambling to do so.”
“Despite the federal gaming laws in place today, Americans are betting up to $400 billion a year on sporting events alone,” commented Pallone. “It’s time to recognize that the laws are outdated, and the GAME Act will modernize them by increasing transparency, integrity, and consumer protections.”
- Legal Sports Report has a section by section summary of the GAME Act.
The GAME Act goes beyond sports betting
The header of Section 2 of the act is “No Federal Liability for Gaming Activity Lawful Under State Law.” In effect, the GAME Act removes all federal liability for gambling legislation. Instead, it hands it over directly to states. “A person or governmental entity is not criminally or civilly liable under federal law for engaging in gaming activity that is legal under state law.”
This takes the authority of the GAME Act far beyond sports betting. Not to mention its explicit repeal of PASPA.
The definition of “bet or wager” is extremely broad:
“the risking of something of value, including virtual currency or virtual items, upon the outcome of a contest of others, a sporting event, or a game of skill or a game of chance, on the expectation that the person will receive something of value in the event of a certain outcome.”
While the GAME Act discussion draft states that the terms specifically include “participation in lotteries, sports betting, and participation in fantasy sports and fantasy e-sports,” this also opens the doors for states to authorize esports skin betting. It is an industry that collapsed after Valve announced that it would no longer support the practice in July 2016.
Valve’s decision stemmed from regulatory concerns. Those crystallized a few months later when the Washington State Gambling Commission ordered the company to cease and desist offering the form of virtual currency gambling related to its game, Counter-Strike: Global Offensive.
GAME Act includes federal consumer protections
Congressman Pallone originally submitted a very similar bill in May this year. As with the GAME Act, that bill included a number of measures which allow the federal government to ensure that any state gambling laws enacted subsequent to the act meet minimum standards of consumer protection.
These include measures against problem gambling. The bill stipulates the Gambling Addiction Research Advisory Committee within the National Institutes of Health to coordinate research. It also calls for the Centers for Disease Control and Prevention to set up a surveillance system for gambling addiction.
The bill specificall states age verification by credit card is illegal. The prohibition is an attempt to minimize the potential for underage gambling.
There is support for federal intervention
Congresswoman Dina Titus (D-NV) wrote to Congressman Dan Walden (R-OR) and Frank Pallone as the Chairman and Ranking Member respectively of the Committee on Energy and Commerce.
She referred to the Supreme Court case, and the likely response of states that will move quickly to introduce sports betting should New Jersey win.
“It is evident that this issue will be coming to Congress, and we must be ready to move quickly to ensure that we protect consumers while excluding bad actors from the marketplace.”
She asked that the committee hold a hearing on the future of sports betting in the US.
The American Gaming Association (AGA) gave its opinion that a bill to legalize sports betting will make it to President Trump during his current term. The AGA supports both overturning PASPA and the creation of a legally regulated sports betting market, but has been considering the issue in the longer term.
The imminence of a Supreme Court decision on sports betting brought the longer term much closer though. It also provided the impetus for politicians such as Congressman Pallone to anticipate the need for legislation sooner rather than later.
For US citizens keen to see a properly regulated and safe online gambling environment, the GAME Act provides a clear roadmap. Additonally, it allows federal oversight while retaining states’ rights under the 10th Amendment.
The GAME Act may not survive the political process in its current form. However, legislative action on US sports betting is definitely back on the table.