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State vs. federal: will sports and gambling agree on a regulatory vision for sports betting?

Ahead of next week’s Sports Betting USA webinar on the 15th August (register here) exploring how leagues are preparing for possible scenarios coming out of the Supreme Court ruling in the New Jersey sports betting case, Ewa Bakun, Head of Content at Clarion Gaming, shares her insights.

On June 27th this year, in a surprising turn of events, the US Supreme Court, against the recommendation of the Solicitor General, agreed to hear the arguments in the New Jersey sports betting case. This came as a shock to all – a development welcomed by the gambling sector and a wake-up call for the leagues that now have to move from offense to defence.

On that one day in June sports betting transitioned from a distant possibility to an imminent reality, putting pressure on all stakeholders to quickly work out a strategy for future lobbying, commercial exploitation and operational roll-out.

Led by the efforts of the American Gaming Association, the gambling sector has been advocating for legal change from prohibition to authorisation for a few years now. Presumably this also means a commercial consideration of the routes to market, at least for the more progressive operators. It is the leagues however that have suddenly found themselves having to rethink their positioning, as legalised sports betting, which they have opposed so far, is becoming more viable.

Of course, the leagues could just stick to their guns and keep advocating against New Jersey aspirations to operate sports betting. However, doing so would mean they’d lose an opportunity to steer the conversation while there is still uncertainty about the outcome of the Supreme Court ruling. Their leverage is right now when they can still engage stakeholders and shape the conversation about the future form of legalised sports betting, and about the commercial benefit this could bring to them.

It is therefore highly likely that they are taking their time to re-evaluate their position and study various scenarios to come up with a model that will suit them most. And that model is possibly not in line with what the gambling industry envisions for sports betting.

Gambling has always been regulated on a state level, and that’s the framework that the American Gaming Association proposes for sports betting: repeal PASPA and leave it to the states to legislate and regulate. Adam Silver, the Commissioner of the National Basketball Association, the only league that has so far publicly expressed its support for the legalisation of sports betting was clear in his now famous New York Times op-ed. Their preferred option would be federally regulated sports betting, not fragmented state regulation. This would not only allow the sports industry, according to Silver, to better address the concerns around sports integrity, but also would make it easier for them to keep control of the commercial opportunity.

Would other leagues share the view of the NBA? Possibly, considering how sports integrity has always been their prime concern and it’s understood why they’d rather deal with one set of regulations than a patchwork of state rules. This would put the leagues’ interests against those of the US gambling sector that has traditionally favoured state oversight of gambling. Unless a compromise could be reached, in which minimum standards are set for sports integrity and agreed with the leagues.

But the leagues need to do their homework first to identify what those minimum standards should be, what they can compromise on and what they won’t agree to. And they should do that before spring next year when the Supreme Court is expected to rule. Otherwise, they risk losing out.

Undoubtedly these considerations are now taking place in the leagues’ executive offices, which we don’t have access to. But we can certainly speculate on the variety of positions that leagues could take, and that will be the theme of the upcoming webinar in which Dan Wallach, Andrew Brandt and David Purdum will examine the possible scenarios of the Supreme Court ruling and discuss leagues’ responses to all of them.

To find out more about the webinar, go to http://www.sportsbettingusaconference.com/august-webinar

To find out more about Sports Betting USA conference on November 14-15, 2017 in New York, NY, go to http://www.sportsbettingusaconference.com/