By Megan R. Wilson - 02/17/16 06:00 AM EST
Advocates of sports betting are playing the outside game, hoping that pressure from the states will push Washington toward legalization.
Rather than seeking action on Capitol Hill, proponents of sports betting are hoping that growing acceptance of betting in the states — driven in part by the popularity of daily fantasy sports games — will help overturn a 1992 federal ban on most forms of sports gambling.
“We’re taking a different approach,” Geoff Freeman, the chief executive of the AGA, told The Hill. “We’re creating an environment where policymakers are inclined to ask the questions that we would like to see them ask about the issue.”
In particular, the AGA is raising questions about the flow of money in the illegal sports betting market, the lack of consumer protections and how states and local governments could benefit if that activity were regulated.
Americans spent $149 billion on illegal sports bets nationwide in 2015, the AGA estimates. About 97 percent of the $4.2 billion wagered on this year’s Super Bowl, the group says, was done illegally.
Congress passed a law banning sports betting in 1992 known as the Professional and Amateur Sports Protection Act (PASPA). While states were given a one-year window to legalize some sports betting, only Nevada, Delaware, Montana and Oregon chose to do so.
Proponents are now claiming that technology and other aspects of betting have changed the game, making the law antiquated.
Freeman and others at the AGA are having meetings with governors, attorneys general and state-level lawmakers and law enforcement officials in hopes of creating grassroots pressure to overturn the 1992 statute.
“The general public would agree, the federal government can’t seem to get anything done,” said J.B. Van Hollen, the former attorney general of Wisconsin who is working with the AGA on the issue through his consulting firm, Van Hollen Consulting. “States are stepping up more and more to fill the void. [Federal law] prohibits states that don’t have gaming to do any regulation of it.”
“The more we’ve learned” about illicit sports gaming, he says, “the more we’ve realized that we need to do something about it.”
But the push for sports betting has been overshadowed to an extent by the controversy over daily fantasy sports sites.
While roughly two-dozen states have shown some sort of legislative movement on daily fantasy sports — an industry that argues it is a form of entertainment, rather than gambling — only four have taken up sports betting in recent years.
We are “taking on an issue that isn’t front and center,” Freeman says. “The first step is placing it there, and the second step is winning. It’s a bigger lift, but it gives us the opportunity to be very creative.”
At the moment, all eyes in the gambling industry are on New Jersey, where a panel of federal judges on Wednesday will hear arguments to allow the legalization of sports betting in the state.
The State of New Jersey is fighting in the U.S. 3rd Circuit Court of Appeals to legalize wagers at casinos and racetracks there, hoping to give a boost to the struggling horse racing industry and casino-centric Atlantic City.
The NCAA and four sports leagues — the NFL, NBA, MLB and NHL — are challenging the state, saying that legalization would damage the integrity of their brands and violate federal law.
On Wednesday, 12 judges will listen to arguments from both sides; at least seven must side with the state of New Jersey in order for the state’s challenge to be successful. It could be months before a decision is released.
“There’s an awareness among folks that whatever the purpose of the current law, it’s not really working today,” said Joseph Asher, the CEO of William Hill US, Nevada’s largest sports book operator.
He said it might take more than just lobbying pressure to move Capitol Hill toward action.
“People are generally realistic; there are a lot of issues going on that are all seeking the attention of Congress,” he told The Hill. “Perhaps it takes a court ruling, either in the 3rd Circuit or elsewhere, that may create the impetus to move the issue forward.”
In the meantime, the Pennsylvania legislature — another state covered by the 3rd Circuit — is moving to pass a symbolic resolution that condemns the 1992 law.
“Even amid strong Federal laws banning sports betting in the United States, reports highlight that illegal sports betting is widespread and is considered the number one form of gambling among American residents,” the resolution reads.
Pennsylvania’s House Gaming Oversight Committee approved the measure last week, and it is now heading to the House floor.
Even sports leagues, which are deeply involved in the New Jersey lawsuit and have a history of opposing sports betting, appear to be coming around.
While the NFL still contains strong language in its league policy that declares it “opposes all forms of illegal gambling, as well as legal betting on NFL games or other professional, college or Olympic sports,” there have been some mixed signals. Its teams, for example, play games in London, where the practice of sports betting is legal.
On the other end of the spectrum, NBA Commissioner Adam Silver has been speaking out in favor of legalization of both daily fantasy and traditional sports betting.
“One of the reasons I’ve been pushing to legalize sports betting is not because that I’m necessarily an advocate of sports betting, it’s because all the research shows that it’s a multihundred-billion dollar business just in the United States right now,” Silver said in a FiveThirtyEight podcast last year. “In terms of the integrity of the sports leagues, it’s only bad news for us when it continues to remain underground.”
Many leagues have also signed deals with daily fantasy companies, data providers and oddsmakers, according to an ESPN report.
Freeman is also busy behind the scenes trying to gather a broad coalition of groups who could support or eventually benefit from the legalization of sports betting — including law enforcement, broadcasters, lotteries, convenience stores and even the Humane Society of the United States, which remains concerned about bets on animal fighting.
The National Association of Broadcasters and the National Association of Convenience Stores each told The Hill that they were not working on the sports betting issue, however.
Freedman says he wants to “streamline how Washington looks at the issue.”
“We’ve all seen these debates where Washington is inclined to do something, but because the interested parties can’t get on the same page, it gives Congress a way out,” he said. “We’re going to work to avoid that.”