Proposed Privacy Bill Could Transform U.S. Online Casino Industry

Washington, D.C. – The U.S. online casino industry, accustomed to navigating a complex web of state regulations, may soon face a significant shift with the introduction of a national standard on online privacy and data rights. The proposed American Privacy Rights Act, currently under review in Congress, aims to establish uniform policies across the country regarding the collection, use, and protection of consumer data. This legislation could bring about profound changes for online casino operators and their business practices.

The American Privacy Rights Act, although not yet formally introduced in either the House or the Senate, has been drafted and is under scrutiny by lawmakers. The bill, spearheaded by Senator Maria Cantwell (D-WA), chair of the Senate Committee on Commerce, Science, and Transportation, promises sweeping changes to how businesses, including online casinos, handle consumer data.

A summary from the Senate Commerce Committee highlights the bill’s key provisions:

• Establishing national consumer data privacy rights.
• Setting standards for data security.
• Requiring transparency from businesses on data usage.
• Granting consumers rights to access, correct, delete, and export their data.
• Allowing consumers to opt out of targeted advertising and data transfers.
• Implementing data minimization practices.
• Prohibiting discriminatory use of consumer data.
• Giving consumers the right to opt out of algorithmic decision-making processes.

Industry Reaction and Implications

The bill’s introduction has elicited mixed reactions. Rep. Anna Eshoo (D-CA) has voiced concerns over federal preemption of stricter state laws, a sentiment echoed by some small business owners in Cantwell’s home state. Conversely, the bill has garnered support from major tech companies like Microsoft and civil rights organizations.

Senator Ben Ray Lujan (D-NM) expressed optimism about the bill's passage before the end of 2024. If enacted, the new law would require online casino operators to rigorously review and likely overhaul their data handling practices.

Online casino operators, such as BetMGM, Caesars, DraftKings, and FanDuel, are likely to be classified as “large data holders” under the Act due to their extensive user bases and substantial revenues. The bill defines large data holders as entities handling data from over 5 million individuals or generating $250 million or more in annual revenue.

Currently, online casino privacy policies typically allow for the sharing of user data with partners, often implicitly consented to upon app registration. The new legislation would mandate explicit user consent for such data sharing, possibly leading to more detailed and transparent consent processes during user registration.

Additionally, the Act would shift some responsibilities for data protection from users to the companies, requiring businesses to limit data collection to necessary purposes and obtain explicit consent for sharing sensitive information. This shift could mean a significant overhaul of current data practices and a potential increase in operational costs as companies adapt to the new standards.

Voices Spring Forth on Both Sides of the Issue

The draft bill has sparked a vigorous debate among lawmakers, business leaders, and consumer rights advocates. On one hand, proponents argue that the legislation is a necessary step to protect consumers' privacy in an increasingly digital world. They point to the widespread collection and use of personal data by companies and the need for robust protections against misuse and breaches.

Supporters also highlight that a national standard would simplify compliance for businesses operating in multiple states, creating a unified framework that reduces the complexity and costs associated with adhering to a patchwork of state laws.

On the other hand, opponents of the bill raise concerns about its potential impact on innovation and competitiveness. Some lawmakers, such as Rep. Anna Eshoo, worry that a federal law might override stronger state regulations, diluting protections in places like California, which has its own stringent privacy laws.

Small business owners and representatives from various industries have also expressed apprehension about the costs and burdens of compliance, particularly for businesses that may not have the resources of larger corporations to implement the required changes.

As the bill moves through the legislative process, stakeholders from all sides will continue to weigh in, shaping its final form. Online casino operators, in particular, will need to stay vigilant, preparing for possible changes by reviewing and updating their privacy policies to comply with the new national standards.

In the meantime, companies should begin assessing their current data practices and identifying areas where they may need to make adjustments. This proactive approach can help mitigate the potential impact of the new regulations and ensure a smoother transition if and when the Act becomes law.

“While the American Privacy Rights Act has the potential to streamline data privacy regulations across the nation, it also raises significant concerns about preempting stronger state laws and the compliance burden on businesses,”

The American Privacy Rights Act represents a pivotal step towards national data privacy standards, promising to reshape the relationship between online businesses and their customers. As the legislative landscape shifts, the online casino industry must navigate this new terrain, balancing compliance with user trust and operational efficiency.

For now, the industry watches and waits, aware that the proposed legislation could bring about one of the most significant regulatory changes in its history. The outcome will not only affect how online casinos operate but also how they build and maintain relationships with their users in a world where data privacy is becoming increasingly paramount.