Senate Hearing Divides on Sports Gambling Regulation

On Tuesday, the US Senate Judiciary Committee convened a hearing titled “America’s High-Stakes Bet on Legalized Sports Gambling”, aiming to assess the growing issue of legalized sports betting and its implications. However, the absence of a witness from the gaming industry itself left the proceedings feeling one-sided, with the industry's perspective notably missing. This exclusion sparked criticism from the American Gaming Association (AGA), which was not invited to testify. AGA’s Joe Maloney expressed concerns that the hearing lacked insights into how legal sports gambling serves to protect consumers from illegal gambling markets and how the industry leads efforts in responsible gambling practices.

This hearing came on the heels of the introduction of the SAFE Bet Act by Senator Richard Blumenthal in September. This bill, which seeks to establish a federal framework for sports betting, aims to roll back state-by-state regulations in favor of a centralized approach. Although the likelihood of further legislative action this year remains slim, the hearing underscored concerns from lawmakers and stakeholders about the rapid expansion of online sports betting and its societal impacts.

The Different Stances

As mobile betting and online sports books proliferate across the nation, concerns about addiction and integrity are becoming more pressing. Judiciary Chairman Dick Durbin voiced alarm about the risks posed by 24/7 access to betting platforms via smartphones, pointing to the heightened potential for problem gambling. He argued that operators must take a more proactive stance in identifying and helping gamblers before problems spiral out of control.

Witnesses at the hearing, including NCAA President Charlie Baker and NFL Players Association representative Johnson Bademosi, underscored the risks to athletes from the growing gambling culture. Baker specifically called for a ban on prop bets related to college athletes, citing concerns over harassment and coercion. NCAA surveys reveal that up to 15% of Division I student-athletes have faced harassment from bettors, some receiving death threats. The issue of integrity was also raised by Bademosi, who highlighted the need for clear policies to protect players and the integrity of games, such as prohibiting bets on “negative” outcomes, which could incentivize harm to players.

Keith Whyte, of the National Council on Problem Gambling, argued that states have not allocated sufficient resources to problem gambling programs. He pointed out that, despite over $130 million spent on problem gambling services in 2023, the per capita expenditure was a mere 50 cents, far less than what is allocated to substance abuse programs. Whyte emphasized that gambling addiction must be treated as a public health issue, and federal action is needed to standardize and enhance the existing state-level efforts.

Dr. Harry Levant, a certified gambling counselor, framed the issue more dramatically, likening gambling addiction to substance abuse disorders such as addiction to opioids and alcohol. He argued that the current sports betting model, heavily influenced by technology and artificial intelligence, is designed to keep consumers gambling non-stop, blurring the line between entertainment and addiction. Levant called for greater regulation of the industry, which, in his view, has turned sports into “a nonstop slot machine” for bettors.

A central point of contention in the hearing was the role of the federal government versus individual states in regulating sports betting. Former New Jersey Division of Gaming Enforcement Director David Rebuck, who has played a key role in developing regulatory frameworks for gambling, argued that states, not the federal government, are best positioned to manage sports betting. Rebuck emphasized that state-led regulation has already led to successful programs focused on responsible gambling and the integration of research-driven practices.

While lawmakers like Durbin and Blumenthal pointed out the increased prevalence of sports betting-related harm, Rebuck contended that the Supreme Court’s 2018 ruling in Murphy v. NCAA, which allowed states to legalize sports betting, affirmed their right to regulate it. He expressed concern that a federal framework could undermine state sovereignty and the successful practices already in place.

The SAFE Bet Act was a key topic of discussion during the hearing. This bill aims to standardize regulations across states, setting minimum standards for advertising, promotions, and responsible gambling practices. While Levant fully supported the bill, others were more reserved. Baker expressed conditional support for aspects of the bill, particularly those related to college sports, while Bademosi indicated that he had not reviewed the bill in its entirety. Whyte, representing the National Council on Problem Gambling, expressed support for another Blumenthal bill focused on gambling addiction treatment, but not the SAFE Bet Act itself.

Unfortunately, this exclusion leaves the Committee and the overall proceeding bereft of testimony on how legal gaming protects consumers from the predatory illegal market and its leadership in promoting responsible gaming and safeguarding integrity.

The Future

As the hearing concluded, it was clear that while the industry faces increasing scrutiny, the conversation is far from resolved. The lack of industry representation left a gap in the dialogue, which may affect the future trajectory of sports betting regulations. The tension between state and federal control, the need for stronger responsible gambling measures, and the protection of athletes all remain unresolved issues.

The Senate Judiciary Committee’s hearing on legalized sports gambling revealed the deep divides surrounding the issue. As lawmakers continue to grapple with the rapid expansion of online gambling, the conversation is likely to intensify in the coming months. Industry leaders argue for the efficacy of state-level regulation, while advocates for public health call for a more centralized, federal approach to protect consumers and maintain the integrity of sports. With the 2024 legislative year winding down, it remains to be seen whether a balanced, sustainable solution will emerge from this contentious debate.