The current call for Congressional hearings about sports gambling has become a bipartisan issue.
“I respectfully request that the [House] Energy and Commerce Committee hold a hearing on the future of sports betting in the United States,” wrote Nevada Congresswoman Dina Titus in a December 4, 2017 letter to colleagues. Representative Titus (NV-1) is a Democrat from Nevada whose home district includes Las Vegas.
Two Republican lawmakers in the House, Doug Collins of Georgia (GA-1) and Florida’s Matt Gaetz (FL-1), have also called for hearings on the Professional and Amateur Sports Protection Act (PASPA), the partial federal sports betting ban. And, most prominently, New Jersey Democrat Frank Pallone (NJ-6) introduced formal sports gambling legislation dubbed the GAME Act last month. Representative Pallone is the ranking member of the House sub-committee that normally addresses sports-related issues and would be most likely to hold a hearing on his new bill.
That the drumbeat of possible Congressional hearings is happening in the shadow of a pending Supreme Court case about PASPA is a fact not lost on Representative Titus and others.
“Members of Congress need to be prepared should action at the Supreme Court open the door for sports betting in their home state or warrant federal legislation,” she wrote in last month’s letter.
If or when a sports betting-focused hearing gets scheduled, Congress will have no shortage of prior testimony and studies on the subject.
One such report—a 1976 tome obtained by SportsHandle and formally titled “Gambling in America”—included a crystal ball-worthy sub-section about the “controversy” over sports betting, touching on some of the same issues that persist today.
Overview of the 1976 Commission on the Review of the National Policy Toward Gambling, And Congressional Calls for Sports Betting Hearings
Totaling 212 pages, the report included individual chapters on various issues, including state and federal law enforcement, legal versus illegal gambling activities, and survey results about American gambling behaviors and attitudes.
The report was conducted by the “Commission on the Review of the National Policy Toward Gambling,” a Congressionally-created group chaired by Charles Morin, a Washington, D.C. lawyer. Other members of the 15-person commission included four U.S. Senators and four U.S. Representatives. The report was transmitted to President Gerald Ford and both chambers of Congress on October 15, 1976.
The report concluded with a special section entitled “The Sports Betting Controversy.”
Spread out over four pages, the sub-section explained why sports betting was particularly tricky to analyze. Based on internal research and witness testimony from a number of stakeholders, the portion of the report devoted to sports flagged three issues that were controversial in 1976 and remain germane 42 years later:
- Potential revenue numbers and tax treatment of sports betting;
- The possibility of fixed games; and
- Whether sports leagues have any rights in the wagering space.
Sports betting revenue and taxes
Estimates of revenue and tax proceeds from state-sanctioned sports gambling run the gamut. Some appear wildly optimistic. Others are more measured. The 1976 report fell squarely in the latter camp.
“Sports wagering…falls considerably below other types of wagering in terms of the revenue it produces for the operator,” wrote the Commission.
The report continued on this point, with a warning:
Likelihood of a ‘fix’
Leaders of sports leagues have long emphasized game-fixing concerns as the basis for opposition for any legalization of sports betting. Such a historical anchor is best exemplified by Major League Baseball, which created its commissioner position in the wake of the fixed 1919 World Series involving the “Black Sox.” The potential for gambling-fueled fixed games was repeatedly mentioned by Judge Michael Shipp in 2012 when he made his initial ruling against New Jersey in the NCAA, et al. v. Gov. Christie, et al. legal case now at the Supreme Court.
The 1976 report tackles the issue head-on, refuting suggestions made by sports league executives who provided witness testimony a year earlier:
A ‘proprietary’ interest in sports betting
Playing the role of soothsayer, the 1976 report also addressed an issue that has been lurking during the entire five-plus year pendency of the current Supreme Court sports betting case: Do sports leagues have a “right” to exert control in the sports gambling space?
NBA commissioner Adam Silver touched on the topic during July 2017 remarks at a conference in New York City.
“Ultimately, as the owners of the intellectual property, we’re going to embrace it,” said Silver in comments that were first reported by the Sports Business Journal.
The 1976 report flagged the related “proprietary interest” issue implicated by Silver’s position:
Last month, ESPN reported that “Silver and the other leagues hope to eventually lobby Congress to get a piece of bets on each league.” Accordingly, any such future lobbying—whether by the NBA alone or by a collection of like-minded sports leagues—suggests that this issue remains relevant.
In fact just yesterday, Alan Morrison, a Republican member of Indiana’s House of Representatives, introduced House Bill 1325 that would impose a 1% “integrity fee” on the sports betting handle collected by state-licensed sportsbooks. According to a report by ESPN’s David Purdum, this provision materialized after Morrison “received input on the bill from the NBA and Major League Baseball.”
The report’s sub-section dedicated to the sports betting “controversy” concluded with a big picture recommendation.
“[T]he Commission believes that the issue of legalized wagering on sports events should be the subject of extensive debate to allow the voting public to form an educated opinion,” wrote the authors of the prescient 1976 report.
The forward-looking bipartisan group currently calling for hearings would likely agree.
SportsHandle contributor Ryan Rodenberg works as a professor, researcher, and writer. He’s on Twitter @sportslawprof.