Frustrated by his state’s failure to get a federal ban on sports betting overturned in the courts, New Jersey Congressman Frank Pallone says he will introduce legislation aimed at rewriting the nation’s existing gambling laws to reflect what he says are the realities of the modern world.
“The laws need a wholesale review to see how they can actually work together and create a fairer playing field for all types of gambling, both online and offline, including sports betting and daily fantasy sports,” the Democrat told ESPN. “We must ensure the laws are actually creating an environment of integrity and accountability, and include strong consumer protections.”
Central to this effort, he says, is a repeal of the Professional and Amateur Sports Protection Act, which Congress passed in 1992 at the behest of another New Jersey lawmaker, then-U.S. Senator Bill Bradley, who was concerned that unchecked gambling expansion could corrupt sports.
PASPA offered New Jersey a one-year window to legalize sports betting, but despite heavy support from casinos, the legislature failed to enact a referendum. Republicans feared such a vote would have negatively impacted their gubernatorial candidate at the time, so state voters never got a chance to vote before PAPSA was instituted.
So when PASPA passed, only the four states where the activity already existed in various forms?Nevada, Oregon, Montana and Delaware?were left with a legal industry.
Then everything changed a decade ago, or so it did from New Jersey’s perspective, when Atlantic City hit the skids as neighboring states began legalizing their own gambling halls and the Great Recession hit?twin blows from which the seaside resort’s casino market never recovered.
What followed was a full-bore push by the state to extricate itself from PASPA, culminating in 2012 with the passage of an amendment to the New Jersey Constitution that legalized sports betting at Atlantic City casinos and the state’s three racetracks. But that was blocked when the major professional sports leagues and the NCAA, which historically have opposed gambling, sued. This moved the battle to the federal courts, which consistently have refused to overturn PASPA on the grounds that only Congress has the authority to repeal or amend it.
Pallone hopes to accomplish this with legislation that will bring all federal laws governing sports betting before the Republican-controlled House of Representatives for a review, initially to the House Energy & Commerce Committee, where he is the ranking Democrat.
He faces an uphill fight. Gambling traditionally has been a matter for the 50 states to decide on their own, and the view in Washington is that there is little to be gained politically, and potentially a lot to lose, by endorsing it on a national level. Even Congress’s most powerful Democrat for years, outgoing Nevada Senator Harry Reid, couldn’t move the needle on behalf of his corporate constituents on the Las Vegas Strip, and he tried several times.
And the problem isn’t PASPA alone. There are two other federal laws with which Pallone will have to contend: the Interstate Wire Act of 1961, which outlaws betting on sports across state lines by all forms of communication, and this generally is understood to include the internet; and the Unlawful Internet Gambling Enforcement Act of 2006, which effectively banned online gambling by prohibiting banks, credit cards and other financial services providers from processing betting transactions on the web.
He will also have to find a way to counter the influence of billionaire casino tycoon and Republican mega-donor Sheldon Adelson, a vehement foe of online gambling who is pushing legislation which, if passed, would carve all of the above into stone with a blanket ban on wagering on the internet, and that would include the handful of states, New Jersey among them, where it is currently legal.
Adelson’s muscle is such that the American Gaming Association, the casino industry’s federal lobbying arm, backed off its longstanding support of online poker in favor of a platform that is now limited to advocating for land-based sports betting.
But there are factors that could separate Pallone’s effort from the failures of the past.
Gambling in one form or another is now legal in almost every state, reflecting a broadly favorable shift in society’s attitudes toward it. This was evident in the U.S. Justice Department’s 2011 reinterpretation of the Wire Act, which clears states to legalize online gambling within their borders.
While sports betting was specifically excluded from that ruling there are signs that the major sports leagues, sensing a massive business opportunity, are slowly back-pedaling, led by NBA Commissioner Adam Silver, who openly supports regulation. For what it’s worth, the National Hockey League is expanding with a franchise in Las Vegas, and Adelson has swayed the Nevada Legislature into providing $750 million in public funding for a stadium he wants to build for the NFL’s Raiders should the league approve the team’s move from Oakland, Calif., to Las Vegas.
The internet, in the meantime, has sparked a nationwide explosion in the popularity of daily fantasy sports. In August, New York Gov. Andrew Cuomo signed a bill that legalizes and protects real-money wagering on the contests, although many states still consider it illegal gambling.
With an eye on the Las Vegas stadium proposal, sports betting advocates are now looking for signs that the NFL, whose sport is the largest and most popular in the country, will move away from its historical opposition. If that happens they believe the stage could be set for major change.
So far, though, they’ve been disappointed. For one thing, it appears that league Commissioner Roger Goodell is concerned that a Las Vegas move by the Raiders could be bad for the NFL’s image. As for sports betting, he recently sounded a sobering note: “There clearly has been a society shift as far as how people view gambling. We are still very much opposed to legalized gambling on sports. We think that has an impact on the integrity of our game.”
