Experts Sound Off on Sports Betting

Briefing will preview SCOTUS sports-betting case

Stakeholders in the potential legalization of sports betting joined gaming experts in New York City and a one-day seminar in Washington D.C. within the last two weeks to analyze what a legal sports betting market in the U.S. would look like, and to preview the first hearing at the United States Supreme Court of Christie v. National Collegiate Athletic Association, New Jersey’s appeal in favor of its sports-betting law, which also challenges the constitutionality of the federal ban on sports betting.

The two-day Sports Betting USA conference was directed toward all who would be affected by the repeal of the 1992 Professional and Amateur Sports Protection Act (PASPA), which bans sports betting in all but four grandfathered states, with only Nevada offering full sports books. Sessions looked forward to the future of sports betting in the U.S. after the Supreme Court rules in the New Jersey case. Hearings in that case are slated for December 4, with a decision expected next spring.

According to CDC Gaming Reports, MGM Resorts International Vice President of Vice President of Race and Sports Jay Rood told an audience at the conference he was headed to the company’s Borgata resort in Atlantic City to “scout what we’re going to do down there” with regards to a sports book.

“We’re in line with thinking that there’s going to be some sort of movement on this,” Rood said during a panel discussion on the “optimal routes” to a legal sports betting market. “We’re preparing for all the different scenarios. Everyone is going to have to explore how it’s going to fit into (the) business model of their existing operations.”

Dennis Drazin, chairman of New Jersey’s Monmouth Park racetrack, added that his property actually went ahead and spent $1 million to build a sports book while New Jersey’s first sports-betting law was winding through the courts. The U.S. Supreme Court declined to hear that case, affirming the decision of the 3rd Circuit Court of Appeals that the New Jersey law violated PASPA.

Another seminar brought a professional sports executive into the sports-betting discussion. Titled “Envisioning a Sports Betting Model That Would Work for the Sports Industry,” the panel, chaired by Yahoo Finance columnist Daniel Roberts, featured Dan Spillane, senior vice president and assistant general counsel for the National Basketball Association; Michael McCann, head of the Sports and Entertainment Law Institute at University of New Hampshire School of Law and legal analyst for NBA-TV; and Tom Russell, general counsel for Genius Sports.

The NBA’s Spillane reprised the position formerly taken by league Commissioner Adam Silver, who came out in favor of legalizing sports betting.

“Our general position on sports betting is that it should be legal and regulated, pursuant to a federal framework that has minimum safeguards,” Spillane said. “We have advisers in D.C., we have legislation that we’ve been pulling together, talking with other stakeholders in this area. It’s a slow process…

“When the leagues were all just unanimously opposed to it, it really wasn’t a practical discussion to have, and now it is… I think that there will be a little bit more clarity, and people will be more open, especially members of Congress, to talking about potential legislation once the (New Jersey) case is resolved one way or another.”

McCann noted that the U.S. Supreme Court takes only one percent of potential cases, so “the fact that the Court took the case at all is a fairly significant point… at least four justices voted to hear the case.”

The conference also addressed the future of sports betting in connection with the tribal gaming industry. One panel examining tribal gaming and sports betting, moderated by Victor Rocha, publisher of Pechanga.net and president of Victor Strategies, included Debbie Thundercloud, chief of staff of the National Indian Gaming Association; Mark Macarro, chairman of California’s Pechanga Band of Luiseno Indians; and Jonodev Chaudhuri, chairman of the National Indian Gaming Commission.

Thundercloud said any sports betting discussion needs to recognize tribal compacts with states. “We want the sports betting discussion to recognize our existing compacts with states, to recognize exclusivity clauses, (to make sure that tribes have) access to the customers that are going to be available for sports betting, and to make sure that there’s an economic benefit to the tribes,” she said.

Panelists expressed concern that legalized sports betting will open the Indian Gaming Regulatory Act to amendments for the first time in its history—an outcome tribes have sought to avoid. “Once it’s open, it’s open,” Macarro said of IGRA, cautioning that anti-gaming lawmakers could use the opening to restrict the tribal gaming industry.

Macarro added that tribes expect sports betting to be classified Class III, requiring amendments and revamping of existing state gaming compacts.

Other panels examined the Supreme Court case itself, which could result in a full or partial repeal of PASPA. In a session moderated by Cath Breeding, vice president and general counsel for Mississippi’s Island View Casino Resort, Monmouth Park’s Drazin said he is cautiously optimistic. “I do believe we’ll win,” he said, “but there’s more than one way to win. What does it look like? Is it (an affirmation of) the 2014 New Jersey partial repeal? Or is it a complete declaration that PASPA is unconstitutional?”

He added that if the Supreme Court upholds PASPA, “New Jersey has introduced another total repeal. I’m certain there can be a challenge.”

American Gaming Association Media Relations Director Steven Doty told attendees at the conference that the “there’s not a lot of opposition” to a repeal of PASPA, noting that the AGA I “cautiously optimistic” that either the Supreme Court or Congress will overturn the law.

Doty cited a recent Washington Post report which showed a “55 percent majority approve of legalizing sports betting on pro sporting events, a flip from almost a quarter century ago.”

Finally, delegates attending Sports Betting USA recommended a plan of initiatives to expedite the introduction of regulated and responsible sports betting across the country.

Announced by event organizer Ewa Bakun at the conclusion of SBUSA, the so-called Clarion Accord comprises the following five-point plan:

“Make consumer protection and long-term health of the player the utmost goal through proactive, considerate and sustainable responsible gaming strategies that encompass impact not just now but in the future.
“Seek sports industry’s buy-in by providing comfort, through an educational effort, that its commercial, reputational and integrity goals are fully met.
“Action a transparent and inclusive lobbying effort that considers the interests of all stakeholders, both gaming and sports, for a consistent message to policy-makers.
“Protect the integrity of sports through regulatory framework consistent across the states and enabling full cooperation between sports, gaming, regulatory and enforcement stakeholders.
“Create a sustainable regulatory and taxation environment that instills trust for the consumer, provides revenues to the state budgets and roots out the illegal market.”

The Supreme Court case will be examined and previewed three days before the hearing on December 1, in a press briefing produced by Spectrum Gaming Group and law firm Becker & Poliakoff.

Famed attorney Theodore B. Olson of Gibson Dunn & Crutcher—who will argue New Jersey’s case before the Supreme Court—will join U.S. Rep. Frank Pallone Jr., two Spectrum executives and six other experts to share insights on the legal, economic and operational aspects of sports betting in the United States at the National Press Club in Washington, D.C.

The free event is open to credentialed media. Other attendance is limited. For more information or to register, contact info@spectrumgaming.com.

The agenda is as follows:

12:15 p.m. Welcome: Daniel Wallach, Shareholder, Becker & Poliakoff
12:20 p.m., The Argument for Christie: Ted Olson, Partner, Gibson, Dunn & Crutcher, and Elbert Lin, Partner, Hunton & Williams LLP
12:45 p.m., The View from Congress: Hon. Frank Pallone, Jr. (D-NJ), Ranking Member of the House Energy and Commerce Committee
1:00 p.m., Panel Discussion: Sports Betting in a Post-Christie World – Legalization and Regulation:

Andrew Brandt, Executive Director, Jeffrey S. Moorad Center for the Study of Sports Law at Villanova University

Michael Pollock, Managing Director, Spectrum Gaming Group

Sara Slane, Senior VP of Public Affairs, American Gaming Association

Daniel Wallach, Shareholder, Becker & Poliakoff