Five things we learned from the US Senate committee debate on sports betting

The US Senate Judiciary Committee hearing on the nation’s sports betting industry was held yesterday, 17 December, with the much-anticipated event threatening to fall apart as senators probed on totally unrelated topics.

The theory that federal regulations were the most effective way to protect players from gambling-related harm was the headline topic within the committee, with concerns raised around student athlete harassment, problem gambling rates and the use of AI.

The committee was chaired by senator Dick Durbin, who declared it impossible to watch sports without “being barraged by gambling adverts” and pushed on the importance of action being taken, insisting operators “must play a greater role in preventing addiction”.

“It is critical that Congress looks into sports betting impacts on America and determine how the industry should be regulated moving forward,” he added. 

Five witnesses provided testimony in front of the 21-member committee. Among them were NCAA president Charlie Baker, ex-NFL player Johnson Bademosi and Dr Harry Levant, director of gambling policy at the Public Health Advocacy Institute in Northeastern University, Boston.

David Rebuck, the former director of New Jersey’s Division of Gaming Enforcement and Keith S Whyte, National Council on Problem Gambling (NCPG) executive director, also took part.

However, some senators took the opportunity to take aim at Baker over transgender women being allowed to take part in college sports, in what was a strange twist in Washington.

Here, EGR Global analyses five key takeaways from the near-two-hour hearing, including a divided response to the SAFE Bet Act and reports of betting-related harassment of NCAA athletes. 

Rebuck’s rebuttal 

Rebuck was the only witness to advocate for states being allowed to regulate themselves, insisting to the committee that the system currently in place is a successful one. 

Harking back to the days before PASPA was repealed in 2018, Rebuck reflected on how individuals with a desire to wager on sports would have to do so via illegal means. While he conceded black market operators remained a significant threat to date, it was one that can be thwarted by state and tribal government. 

“Before legalisation, millions of people wagered billions of dollars annually through illegal operations, committed fraud, evaded taxes and many instances were tied to organised crime. These illegal operators offer no protections,” Rebuck noted. 

“I urge the committee to respect the successes the states have achieved in regulation in the past. Federal oversight is clearly not needed. Federal cooperation on certain issues have already begun.” 

Rebuck conceded he did not underestimate the challenges that came from regulating sports betting, but stood firm in his stance that it was a challenge best left to individual states, many of which have already adopted best practices, such as self-exclusion schemes and partnerships with universities for more advanced research. 

He also claimed the industry already recognised the importance of responsible gambling efforts, citing the recently formed Responsible Online Gaming Association (ROGA) as an example of the sector’s own response to problem gambling. 

AI’s “dangerous” impact 

Advancements made in technology over the past six years since sports betting was legalised in the US are a concern, according to Levant, as he explained during the session.

He stressed the need for greater regulation and urged Congress to enact what he dubbed “much-needed legislation to bring comprehensive public health reform and regulation to support the gambling industry”.

He also outlined the severity of the issue the US faces in response to the sports betting boom, insisting it was a public health emergency comparable to the opioid crisis. 

“With every other addictive product, government regulates advertising, promotion, distribution and consumption,” Levant explained. “Sadly, with gambling, the exact opposite is occurring.” 

He continued by highlighting the damaging impact of AI technology within the sector. 

“What has been launched on the American people is a newly created, AI-generated online gambling business model which delivers a fundamentally different, effectively designed and currently dangerous product to every phone, tablet, computer and TV,” Levant commented.

“The gambling industry has expanded to include specific partnerships, which includes sports leagues, teams, owners, players, the world’s largest media and tech companies, social media, AI and state governments themselves. All are acting in concert to deliver online gambling at lightspeed and ensure the action never stops. 

“The new AI-fuelled business model will inexorably result in increased gambling addiction and gambling related-harm, I see this every day in my practice as a condition.” 

Not such a SAFE Bet 

As expected, the hearing did not conclude without mention of the Supporting Affordability and Fairness with Every Bet (SAFE Bet) Act, introduced in September by Congressman Paul D Tonko and Senator Richard Blumenthal. 

The proposed legislation looks to implement a minimum federal standard across the nation for all states to adhere to, with its remit covering advertising, affordability and the use of AI as well as forming a public health response to gambling-related harm. 

Some of the SAFE Bet Act’s most notable features include the suggestion that states that wish to offer sports betting must apply to the Attorney General of the United States as well as a ban on both NCAA athlete-player prop bets and on sports betting broadcast advertising between 8am and 10pm. 

Senator Blumenthal directly asked all five witnesses whether they supported the SAFE Bet Act and was met with mixed responses. 

Baker and Bademosi both answered “yes”, noting that neither was familiar with every aspect of the bill, but agreed with what they had seen. 

Rebuck could not give his backing to the Act, arguing that all the issues raised in the legislation are ones that can be tackled at state level, rather than federal level. 

Whyte remained neutral on the Act, as is required by the NCPG, but conceded it had positive aspects, while Levant was fully behind it given he helped write it. 

Make America GRIT again 

Whyte used his five-minute address to senators to talk up the importance of another piece legislation introduced by Blumenthal: the Gambling Addiction Recovery, Investment, and Treatment (GRIT) Act. 

Published back in January, the Act would form the first-ever federal government-funded stream dedicated exclusively to preventing, studying and treating problem gambling. 

Whyte bemoaned the fact that many state and tribal governments have failed to invest in problem gambling programmes, insisting that it is evident “they have not provided nearly enough support”. 

He continued: “The NCPG therefore strongly supports the gambling addiction recovery, investment and treatment act, introduced by Senator Blumenthal this year. The GRIT Act provides critical funding to prevent, treat and research gambling addiction without increasing taxes or government bureaucracy.  

“Put simply, the GRIT Act returns nearly half of the sports betting exercise tax revenue to state health agencies. Increasing access to problem gambling treatment is the most important aspect of grit. The NCPG estimates every dollar spent to prevent and treat gambling addiction saves government at least $2 in criminal justice, healthcare related social costs.  

“The evidence is overwhelming that expanded sports betting has led to increased harm on a national scale and it is therefore essential for congress to pass Senator Blumenthal’s GRIT Act.” 

Prop bet problem 

The discourse surrounding player prop bets for NCAA athletes has rumbled on for some time and Baker made sure to point out the states that have recently banned such bets, such as Ohio, Louisiana and Maryland.

The NCAA chief also reflected on the betting-related abuse student athletes are subjected to on a regular basis, noting “four different surveys show 10-15% of division one student athletes have been harassed by bettors, more so in basketball and football”.

“There’s no doubt that the rise of sports betting has impacted the NCAA and student athletes in a significant way, but none of the consequences are as challenging as the harassment and coercion student athletes are experiencing,” Baker added.  

“Many have received death threats from bettors, and they also receive other, in-person threats and accusations directed at them while they’re leaving or coming onto the field of play.” 

Bademosi also addressed the harassment of athletes from bettors and pitched the idea that a federal ban on betting on negative outcomes could go some way to curtailing such treatment. 

“Fans wouldn’t gamble on negative outcomes and therefore would not have an incentive to heckle players or encourage negative outcomes in a game,” the former Cleveland Browns star explained. 

Industry reaction 

Tuesday’s hearing has prompted responses from across the sector, including the American Gaming Association (AGA), which issued a statement expressing its frustration over the lack of an “industry witness”.

Joe Maloney, the AGA’s vice president of strategic communications, said: “Today’s hearing notably lacked an industry witness.  

“This unfortunate 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.  

“We remain committed to robust state regulatory frameworks that protect consumers, promote responsibility, and preserve integrity of athletic competition.” 

Before the hearing got underway, the iDevelopment & Economic Association trade body shared similar sentiments to Rebuck as it expressed concerns over federal intervention within the sports betting industry. 

“Proposals by Congress to regulate sports betting represent unnecessary federal interference in a system that is working effectively,” the group argued. 

“Imposing federal mandates on sports betting would risk undermining this progress and introduce confusion and inefficiencies in a regulatory environment that is functioning well.  

“Federal intervention threatens to stifle innovation, disrupt state economies and jeopardise the benefits that regulated sports betting has delivered to communities across the country.” 

ROGA executive director Dr Jennifer Shatley acknowledged the need for collaboration when it came to prioritising player safety. 

The organisation, which represents Bally’s, bet365, BetMGM, DraftKings, FanDuel, PENN Entertainment, Hard Rock Digital, and Fanatics Betting and Gaming outlined its ambitions regarding its responsible gambling efforts. 

“Over the last year, ROGA and its members are creating a strong foundation to help address issues that may impact players’ experience,” Shatley remarked. 

“We as an industry will continue to invest in research and technology to evolve responsible gaming programs, tools and resources.  

“Furthermore, we are working closely with our advisory committee, state regulators and local entities to help the industry comply with all applicable laws and regulations and support operations according to industry standards.”