As the dawn nears of a possible legal U.S. sports betting expansion, two big questions (among others) have emerged, separate from whether the Supreme Court of the United States will strike down the federal ban on sports wagering outside Nevada.
The first is, What role, if any, will Congress have on shaping the future of sports betting in the U.S. if the Professional and Amateur Sports Protection Act (PASPA) gets struck on constitutional grounds? And second, What effect, if any, will an expansion of sports betting have on Nevada?
Nevada Representative (NV-1) Dina Titus, whose district includes Las Vegas, has been outspoken on the need for congressional hearings to address how Members of Congress ought to educate themselves and get prepared should the Supreme Court “Open the door for sports betting in their home state or warrant federal legislation.” She has called on House of Representative’s Energy and Commerce Committee to hold a hearing on the future of sports betting in the United States.
While we have seen all sorts of state-level legislation on sports betting (some of it very ill-advised), there’s a decent chance that Congress will at some point have a word on sports betting, too, whichever way the Supreme Court rules. While state hearings proceed and lawmakers draft bills, SportsHandle has heard from highly experienced Nevada-based industry veterans who are frustrated that states and leagues are for the most part not calling for their insights. Probably to the states’ own detriment. In the following Q&A with SportsHandle, Rep. Titus speaks to that point and a variety of other issues on sports betting.
Nevada Representative Dina Titus Talks Future of Sports Betting, Need for Congressional Hearings, State’s Experience With Gaming, And Las Vegas Becoming a Sports Town
SportsHandle (SH): On the day of oral argument in Christie v NCAA (now Murphy v NCAA) you sent a letter to Energy and Commerce Chairman Greg Walden (OR-1) and Ranking Member Frank Pallone (NJ-6), calling for a hearing regarding PASPA and sports betting. Have you heard back from either Representative?
Rep. Dina Titus (DT): I haven’t heard back from the Chairman. But Congressman Pallone and I speak often and he is very interested in this — he’s not only the committee’s ranking member but from New Jersey and has legislation, the GAME Act, that we are looking at and talking to members of the industry in Nevada about.
SH: What is your impression of the GAME Act? Is there anything in there you may want to see changed?
DT: Well, I think what we like about it is it leaves a lot of the regulation to the state, even though it’s federal legislation. We think Nevada is the gold standard and that other places can learn from us. We don’t want other people trying to reinvent the wheel.
SH: Do you think if the GAME Act or some legislation like it were passed that expanded sports betting to other states, that it might impact Nevada’s business?
DT: When casino gaming spread beyond Nevada and New Jersey, people were afraid that that would hurt our business, but we don’t believe so with sports betting. We are not just a one trick pony. We’ve got all kinds of entertainment, shopping, food, other kinds of gaming, you come there for the experience. In addition to that, we’ve got the experts in gaming. We’ve got forty highly-regulated publicly traded companies in Nevada and some of them are in sports betting. We think that they will probably invest in other states if it does spread just like they’ve done with casino gaming.
SH: That’s something that’s frequently comes up in conversations I’ve had about a sports betting expansion in the U.S.: People want to know what impact, if any, it might have on Nevada.
DT: Remember this too when you’re thinking about how it affects the market. There’s about $150 billion wagered illegally every year. If some of that becomes legal, some of that is going to come to Nevada, too.
Developments in Other States, And the Sports Leagues
SH: Sure. I agree that there’s a lot to be learned from Nevada experts because in Pennsylvania, the bill they’ve passed, would tax at a 35% rate on gross gaming revenue, versus about 6.75% in Nevada, plus you have the quarter federal excise tax. Plus there’s a $10 million initial licensing fee, which is a huge barrier to entry, which I assume is the intention. Frankly, some of these states don’t know what they’re doing. They might doom some operators before they begin.
DT: That’s right. I think that’s why some of them haven’t been successful with gaming. Lotteries were going to solve every problem and those are on the way. A lot of people looked at traditional gaming, casino gaming, that didn’t go the way some people had hoped for bringing in revenue because they see it as a cash cow and don’t approach it in a smart way in terms of regulation or finance. But that’s why we need hearings now to get ready for when that happens so states will be a little more informed about it and you don’t just jump in blind.
SH: What do you make of the sports leagues’ position on sports betting now? Which is support for legal sports betting, but qualified support.
DT: It’s interesting that the leagues are not opposed as they used to be. You certainly see that happening in Las Vegas. We’ve become a sports town, we’ve got the hockey team, we’re getting the Raiders, we’ve got the women’s basketball, we’ve got a professional soccer team. There’s no longer that stigma of sports betting that there used to be. I would think the AGA is looking into that and getting involved.
The Coming Supreme Court Ruling
SH: We talked a little bit about the GAME Act and PASPA. Let’s suppose that New Jersey does win and PASPA is struck, do you foresee, you know, continuing the conversation with Mr. Pallone and Mr. Walden possibly about trying to come up with some sort of federal framework, or do you think at that point just let the states decide how they want to proceed?
DT: The Supreme Court could do two things if ruling for New Jersey. They could strike PASPA down entirely or they could just strike it down for New Jersey and then leave it up to the states to decide. I think before I commit on any kind of legislation, we have got to have hearings. Be just what this means so people, experts, from Nevada can come and testify, and talk about how to set this up. You know yourself that gaming is a very complicated issue and most people don’t really have much understanding of it.
There’s a gaming caucus here in Congress and it’s met one time since I’ve been here and people who have gaming in their states which is just about every state, may have one little river boat, or one horse track, they don’t really realize the impact of it overall. The first thing is to educate my colleagues about what this means and what it could mean for their states. Also, just to hold Nevada harmless to be sure we don’t roll back any of the good provisions that we’ve put in after a long time and a lot of effort with a bunch of experts.
SH: Obviously Nevadans and particularly people in your district, gaming is a major employer and it’s a part of the culture there but there continues to be, for whatever reason, some stigma remains surrounding sports betting. Can you speak to what it’s like and why that does or does not exist out there?
DT: No, it doesn’t. Like you say, that’s a big employer and it’s just part of the gambling scene. I think what a lot of people don’t realize is how much there is in the illegal market, that $150 billion and so there shouldn’t be a stigma on legalized, regulated, taxed sport betting. The stigma should be on backroom betting and on the illegal market, not the legal market.
SH: Last question and this is an open question, is there anything else on this subject that you’d like to add?
DT: I think that seeing all these states that are now looking at it as a possibility and maybe having it in their states. I think they’re just testing the water and none of this really becomes relevant until the Supreme Court makes that decision. But that’s why we need hearings now to get ready for when that happens so people will be a little more informed about it and you don’t just jump in blind.