Congress pushing for federal sports betting oversight

Congress' interest in the expanding U.S. sports betting market is growing.

Draft legislation that aims to provide federal oversight to sports betting surfaced out of retiring Sen. Orrin Hatch's office this week. The 37-page untitled discussion draft, obtained by ESPN, is viewed as an initial step in what's expected to be a long, tedious process that will play out as legal sportsbooks pop up in an increasing amount of states.

The legislation, which would allow wagering on professional and collegiate sports, would require states to apply for approval from the U.S. attorney general when implementing new sports betting laws and regulations. It would force sportsbook operators to use official league data to grade wagers until at least 2023 and create a mechanism for authorities to target unlicensed operators domestically and offshore.

In addition, the bill calls for the formation of the National Sports Wagering Clearinghouse, which would collect anonymized sports betting data in real-time, including the amount and type of wagers, date and time in which the bet was accepted, where it was placed and the outcome. The goal of the clearinghouse would be to monitor for any unusual betting patterns, a potential sign of corruption.

Hatch's comprehensive legislation also addresses sports betting advertising and problem gambling, and looks to amend two federal gambling statutes. The bill would amend the Wire Act of 1961 to allow sportsbook operators to lay off bets to other states through compacts, and strengthen the Sports Bribery Act of 1964 by adding extortion, blackmail and wagers based on non-public information as violations.

The draft bill is the first federal sports betting legislation that has appeared since the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA) in May. PASPA had restricted state-sponsored sports betting to primarily Nevada, but was found to be unconstitutional, opening a pathway for additional states to set up regulated bookmaking industries. Since the ruling, sportsbooks have opened in Delaware, Mississippi, New Jersey, New Mexico, Pennsylvania, Rhode Island and West Virginia. Roughly 20 additional states are looking at sports betting as a potential revenue stream.

"Since the Supreme Court's ruling in May, the American Gaming Association has consistently maintained that federal legislation regarding sports betting is not necessary. That underlying position remains unchanged," Chris Cylke, vice president of government relations for the American Gaming Association said in a statement. "At the same time, we remain committed to maintaining an open and constructive dialogue with policymakers considering sports betting legislation at any level of government."

Hatch (R-Utah), the longest-serving Senate Republican, was a proponent of PASPA when it was passed in 1992. He has been vocal about the need for federal regulation since the Supreme Court ruling in May, but will be stepping down at the end of December.

Sen. Chuck Schumer (D-New York) released his vision of a federal sports betting framework over the summer, and the House Judiciary Subcommittee on Crime, Terrorism, Homeland Security and Investigations held a hearing in September to examine sports betting.

According to the American Gaming Association, Americans wagered more than $150 billion on sports in 2017.