New Jersey’s Pallone Introduces PASPA Repeal
Dallas Cowboys’ Jones supports legal sports betting
As the gaming industry awaits the U.S. Supreme Court’s decision in Christie v. the National Collegiate Athletic Association, which could overturn the federal ban on sports betting, the U.S. House of Representatives could begin debate on a bill that would render that decision moot.
On December 4—as oral arguments were being given in Christie v. NCAA—U.S. Rep. Frank Pallone of New Jersey introduced the Gaming Accountability and Modernization Enhancement Act, or GAME Act, which would allow states to legalize sports betting inside their borders. If passed, the bill would repeal the Professional and Amateur Sports Protection Act (PASPA), the 1992 law at the heart of the state of New Jersey’s effort to pass its own law legalizing sports betting. PASPA was the basis of the major sports league’s lawsuit blocking New Jersey’ 2014 sports betting law.
New Jersey has argued before the high court that PASPA is an unconstitutional overreach of federal authority over the sates.
The GAME Act explicitly repeals PASPA, and asserts that anyone who wagers on sports in a state where sports betting is legal would not be subject to federal authority. It also provides for specific consumer protections that would be required within states where sports betting is legal. Daily fantasy sports—which didn’t exist when PASPA was passed—also is specifically authorized under the bill.
The bill also provides protections to promote responsible gaming, authorizing creation of a committee to research gambling addiction and providing that the national Centers for Disease Control establish a surveillance system for gambling addiction.
As Congress may or may not take up the sports betting issue (most expect lawmakers will not, at least for now), the Nevada delegation is cautioning colleagues to leave the federal handling tax currently charged to Nevada sports books out of any new legislation. Nevada Rep. Dina Titus last week sent a letter to congressional leaders advising that the 0.25 percent federal handling tax on sports wagers in the state—established under a 1951 law, it results in around $10 million a year going to federal coffers—simply emboldens illegal bookies, who are able to offer bettors a better deal as a result.
“In theory, the law is a noble one,” she wrote in the Dec. 12 letter. “In practice, the tax has sucked money out of Nevada without ensuring the state receives the benefits outlined by Congress.”
Longtime Las Vegas oddsmaker Vic Salerno further outlined the problem with the tax to CDC Gaming Reports.
“The imbalance caused by burdensome taxation and payments to all the entities seeking entitlements, or ‘slivers,’ will cause New Jersey sports book operators to move from the existing 11/10 relationship to betting odds that are 12/10 or even 13/10,” he wrote. “The probable result of such a decision to change the sports betting odds will embolden illegal bookmakers to market their business in a more aggressive manner, offering the customer a better deal at the old $11 rate. In this scenario, the black market will flourish, and the casinos will flounder under the crushing weight and open palms.”
Meanwhile, more support for legal sports betting came last week from none other than the National Football League, in the person of Dallas Cowboys owner Jerry Jones.
During his weekly radio spot on Dallas sports talk station 105.3 The Fan, Jones opined that his league’s steadfast opposition to legal sports betting as potentially damaging the integrity of the sport is misplaced.
“I don’t see that gaming compromises the integrity of the game,” Jones said The Supreme Court will likely rule on the New Jersey case this spring, and if New Jersey prevails, other states could move to allow sports gambling, which is estimated to be a $150 billion industry — and all but a small percentage of that are from legally placed bets.
If there was a negative outlook last week on the possibility of legal sports betting, it came from an op-ed by University of Iowa Professor Jonathan Yates. In an op-ed for the Des Moines Register, Yates wrote that SCOTUS justices could be influenced by an FBI investigation into a college basketball recruiting scandal.
In late September, the FBI went public with its investigation into corrupt college recruiting, arresting assistant coaches and others. Yates wrote that the case “could easily derail the efforts of New Jersey and other states to host betting on college games.
“FBI headquarters is an easy stroll from the Supreme Court,” Yates wrote. “Obviously, the FBI knew that the court would hear Christie before it started arresting coaches and others as the opening salvo. The major issue is why the FBI did not wait until after the court ruled on Christie. After all, the case has been going on for years; and there is, unfortunately, no danger of corruption in sports going away before the court renders its verdict early next year.”
If nothing else, the FBI case could give support to calls for an NCAA “carve-out” in state bills legalizing sports betting, in the event PASPA is repealed.