AGA Letter Warns Schumer Of Drawbacks Of Federal Sports Betting

hadn with pencil writing letter

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The American Gaming Association has sent a letter to Sen. Chuck Schumer (D – NY) in opposition to his proposed federal framework to oversee sports betting. The AGA asserts that state legislation and law enforcement oversight would be more effective to achieve both groups’ common goals.

Both the AGA and Schumer have expressed concern about black market sports betting and the possible infiltration of a criminal element into the nascent legal industry. Schumer, the Senate minority leader, has advocated for federal leadership over sports betting since the Supreme Court struck down PASPA in May 2018.

In late August, he issued a proposal for federal oversight of sports betting.  Along with creating an extra layer of regulation, the framework also mandated the use of official data and gave sports leagues control over the types of bets they would allow.

Unsurprisingly, three of the leagues immediately issued a statement of support for the framework. In a press release, however, Schumer spoke to the necessity of federal involvement.

“With the Supreme Court’s ruling, it’s incumbent on the federal government to take a leadership role and provide the necessary guidance to prevent uncertainty and confusion for the leagues, state governments, consumers and fans alike,” he said.

AGA points out errors in Schumer’s arguments

The AGA’s letter is an attempt to educate Schumer about the logistical problems with his proposal. For its part, the group wants to work in concert with the New York senator, rather than in opposition and highlights the two groups’ shared objectives.

For instance, Schumer wants to use the federal framework to ensure game integrity. The AGA points out that superseding the existing regulatory bodies would install less-experienced personnel into positions of oversight.

“AGA strongly believes no additional federal engagement is needed at this time based on the significant, effective regulatory oversight already in place…Replacing an already proven regulatory regime with a non-existent and untested federal oversight apparatus would be out of step with 7 in 10 Americans who think this decision should be left to each state and tribe. “

The trade group also points out the danger of requiring official data from a single provider. If there is one mandated source, then nothing would prevent that source from charging monopolistic prices that exceed the market value of the data.

The framework suggests something more sinister

The AGA letter, penned by Sara Slane, the AGA’s senior vice president of public affairs, strikes a collaborative tone with the Democratic senator. There is no doubt that the trade group would prefer to work with legislative bodies, rather than against them.

However, there is something ominous about the proposed framework. An Aug. 23 speech from the floor of the US Senate provides the clue.

In that speech, Sen. Orrin Hatch (R – UT) called for federal legislation to regulate and monitor sports betting. His proposed legislation would include what he called “improvements in monitoring and enforcement.”

The problem is that Hatch is one of the authors of PASPA itself. The Supreme Court ruled his law unconstitutional, but he’s proposing a replacement for it two months later.

Then, a week later, Schumer releases his proposal. Its contents mirror Hatch’s statements at several points.

So, the AGA has a right to be concerned about Schumer’s proposal. Rather than a benign suggestion, it could easily become the backbone for PASPA II.

It also doesn’t help that Sen. John McCain‘s replacement is Jon Kyl, one of the authors of the UIGEA. Gambling advocates need to be on high alert in the next few months.

This time, however, the legislators won’t make the same mistake. They won’t make sports betting illegal – they’ll just maim it so no one wants to play anymore.

Bart Shirley

About

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.