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The US Senate Judiciary Committee held a hearing Tuesday entitled “America’s High-Stakes Bet on Legalized Sports Gambling.”
As the title suggests, it wasn’t set up to be a fair and unbiased review of the gaming industry’s modernization into US online casino and sports betting.
Five witnesses testified, but no one from the industry was among them. American Gaming Association SVP of Strategic Communications Joe Maloney bemoaned that the leading industry trade association did not receive an invitation to participate.
Today’s hearing notably lacked an industry witness.
American Gaming Association SVP of Strategic Communications Joe Maloney
“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,” Maloney stated in a response to the hearing. “We remain committed to robust state regulatory frameworks that protect consumers, promote responsibility, and preserve integrity of athletic competition.”
The committee met following the September introduction of the SAFE Bet Act. Authored by Sen. Richard Blumenthal, a member of Judiciary, the bill looked to roll back all 39 state regulations of sports betting and establish a federal framework.
Although unlikely to lead to further action this year in a lame-duck session, the hearing provided industry stakeholders further warning of areas federal lawmakers see as concerning about sports betting and online gaming.
“With the advent of online sports betting, everyone’s cell phone is a sportsbook providing betting access 24 hours a day, seven days a week,” Judiciary Chairman Dick Durbin said. “A person with a gambling problem can chase the action at the click of a button and rack up ever-increasing losses, whether on an NFL game or professional table tennis. I believe gambling operators must pay a greater role in preventing addiction on the front end by helping identify problem gamblers and directing them to help.”
Athlete harassment highlighted by witnesses
Four of five witnesses ed federal intervention in sports betting. However, none wanted to prohibit sports betting all together.
NCAA President Charlie Baker would a federal ban on individual college player prop bets.
“Should this committee develop legislation regulating sports betting, we strongly encourage banning prop bets on college sports,” Baker said. “We also encourage federal authorities to do more to crack down on black market betting sites. We believe these sites are where many of the underage students who report betting are placing their bets.”
Baker noted that NCAA surveys show 10% to 15% of Div. I student-athletes have faced harassment by sports bettors, with many receiving death threats. Thanks to NCAA lobbying, 20 of the 39 states with legal sports betting already prohibit prop bets on college athletes.
“We believe that when bettors can’t gamble on college athlete’s individual performances, they are far less likely to attempt to scrutinize, coerce or harass student athletes,” Baker said.
Johnson Bademosi, who spoke for the National Football League Players Association, said Congress has a role to play in ing policies that reinforce the integrity of the games while also protecting athletes.
He said players associations collectively ask for a prohibition on negative bets, preventing the purchase of biometric player data for the purposes of gambling and to ensure due process by notifying the player and their respective labor union of any potential gambling violation.
“Each of these recommendations is critically important,” Bademosi said. “A prohibition on negative bets would ensure fans are not gambling on negative outcomes and therefore do not have an incentive to heckle players or encourage negative outcomes at a game.”
Witnesses testify on need for stronger responsible gaming measures
Keith Whyte of the National Council on Problem Gambling recognized that state and tribal governments historically have overseen gambling. However, he contended they are not investing enough in problem gambling programs or creating strong enough responsible gambling regulations.
Whyte noted that, although $134 million of public funding was invested in state problem gambling problems in 2023, that is only 50 cents per capita. He said that is much less than public funding devoted to substance abuse.
“It is clear that state governments have not provided nearly enough ,” Whyte said. “And it’s also true that public health is a shared responsibility between the states and the federal government.”
Dr. Harry Levant, a certified gambling counselor and director of gambling policy at Northeastern University’s Public Health Advocacy Institute, spoke of his issues as a gambling addict earlier in life.
“We are presently witnessing the early years of a public health crisis and the time is now for Congress to act,” Levant said. “We have known for more than 12 years that gambling is an addictive product and gambling disorder an addiction similar to heroin, opioids, tobacco, alcohol and cocaine. With every other addictive product, government regulates the advertising, promotion, distribution and consumption.”
Levant claimed he did not oppose sports gambling legalization. But he objected to the way the market has evolved without federal intervention.
“The gambling-industry business model is designed to deliver constant and non-stop action on every phone, tablet and computer,” Levant said. “With the use of technology and AI, the industry and its sports and media partners have turned every micro-moment in each game or event into more and more gambling action.
“The gambling industry and its sports partners have taken sports away from the children, families and American people. Sports have become the equivalent of a nonstop slot machine.”
Longtime NJ regulator defends state rights to regulate gambling
Former longtime New Jersey Division of Gaming Enforcement Director David Rebuck was at the forefront of creating regulations for sports betting and online casino gambling that served as guidelines for many states.
While he serves as a consultant for the AGA, Rebuck isn’t an advocate for the industry so much as an advocate for state rights to regulate sports betting.
“I am here today as a proud advocate for state-led regulation of legal gaming, including sports wagering, and to explain why the states and tribal jurisdictions that oversee sports wagering, and not the federal government, are best equipped to address the issues presented,” Rebuck said.
Rebuck contended that states and the industry can handle the responsible gambling and regulatory standards for sports betting and online gaming without federal intervention.
“I do not underestimate the challenges that come with regulating sports wagering, such as responsible gambling and ensuring compliance with regulatory standards,” Rebuck said. “However, states are already addressing these challenges head on with many adopting best practices like mandatory self-exclusion, partnership with addiction treatment providers, partnerships with universities such as our partnership with Rutgers University to engage in evidence-based research and order best-designed practices reducing gambling harms.”
Rebuck added that operators also recognize the critical importance of reducing problem gambling harm in sustaining their operations and invested $20 million this year to create the Responsible Online Gaming Association.
Federal lawmakers express concerns on online gaming expansion
Durbin opened the proceedings by citing National Council of Problem Gambling estimates that 2.5 million adults may have a severe gambling problem and another five-to-eight million may have mild problems.
“Over $30 billion was bet on sports in the third quarter of 2024 alone, a nearly 30% increase over the previous year,” Durbin said. “But at what cost to the bettor? At what cost to the sport? At what cost to the school or the athlete?”
Durbin also brought up recent betting scandals and fan abuse of athletes related to sports wagering.
“It is critical that Congress looks into sports betting’s impact on America and determine how the industry should be regulated going forward,” he said.
Sen. Marsha Blackburn asked Levant how to keep children from participating in sports betting.
Blumenthal called the sports betting boom one of the most severe public health problems today. He criticized operators for attempts to maximize profits.
“The nomenclature and techniques and sophistication of the trading practice here make Wall Street look like child’s play,” Blumenthal said. “The risk-free bet … the targeting of losers, customizing bets to those who are losing and throttling back the winners. The plethora of techniques is staggering here, all to the benefit of the corporations who are profiting here.”
The gaming industry got a small reprieve in that Sen. Lindsey Graham, an outspoken critic of gambling, missed the hearing with an illness.
For most of the last half hour of the hour and 45-minute hearing, Sens. John Kennedy and Josh Hawley took attention away from criticisms of sports betting by questioning Baker on NCAA policies regarding transgender student-athletes.
Witnesses lukewarm on SAFE Bet Act
In one of the final moments related to the actual topic of the hearing, Blumenthal asked witnesses if they ed the SAFE Bet Act.
“Right now we have a patchwork of half-hearted regulations,” Blumenthal said. “The SAFE Bet Act would, in effect, also provide more public-health benefits … Those minimum standards would be set by the Department of Justice. States would still have responsibility but they’d have to meet those minimum standards that would eliminate the kinds of promotions, ads, pitches and deceptive techniques that right now are so rampant.”
Only Levant, who helped author the bill, fully ed the SAFE Bet Act. Baker said he ed the elements with which he was familiar. Bademosi said he was not familiar with the whole bill, but he ed the parts related to athletes.
Whyte said the Council ed another Blumenthal bill, the Gambling Addiction Recovery Investment and Treatment Act. It would return nearly half of federal sports betting excise tax revenue to state health agencies.
Rebuck pointed out that the US Supreme Court gave states the right to regulate sports betting by overturning the Professional and Amateur Sports Protection Act in 2018. New Jersey led that charge in Murphy v. NCAA.
“I believe, after six and a half years of litigation for the states to earn the constitutional rights to have sports wagering, that we are entitled to do the best we can to regulate and deal with the issues that are highlighted here.”
Durbin closed the hearing by noting it was the last scheduled for the Judiciary Committee this year. In the new year, committee leadership will change as a result of Republicans winning the Senate in November.
