Two new states entered the sports wagering marketplace in November: Pennsylvania and Rhode Island.  Pennsylvania’s Hollywood Casino at Penn National Race Course accepted the first sports wager in Pennsylvania in mid-November.  Five other casinos in Pennsylvania have applied to offer sports wagering and will soon follow Hollywood Casino.  Pennsylvania has legalized on-line sports wagering, although no casino has rolled out its product yet.  The expected launch is in early 2019.  Rhode Island quickly followed Pennsylvania into the marketplace, with the Twin River Casino accepting the first sports wager in Rhode Island on November 26, 2018.  Rhode Island does not permit online sports wagering and its current law limits the number of locations for sports wagering to two.

Looking forward to further expansion, Michigan’s House has passed both online gambling and sports wagering bills.  With a limited number of days remaining before the expiration of the session year, it remains to be seen if Michigan will get legalization passed before a new governor takes office in January. 

New York Assemblyman J. Gary Pretlow recently announced that he will introduce a bill in 2019 to authorize sports wagering in the state of New York.  Looking to the south, Arkansas approved a constitutional amendment in November that includes sports betting.  The licensing at four locations will be overseen by the Arkansas Racing Commission and it must begin accepting applications no later than June 1, 2019.  There are several other states that may move forward with legislation authorizing sports wagering once 2019 begins with new legislative sessions.

While many states have already legalized sports wagering and several more are quickly moving towards doing so, it appears that Congress may not be willing to cede all regulatory authority to the states.  Senator Orrin Hatch introduced a bill earlier this week that would provide for federal oversight of sports wagering.  The draft legislation would require any state that wants to authorize sports wagering to apply for permission to the U.S. Attorney General when implementing new laws and regulations.  The bill does allow betting on college sports, but bars any betting on other amateur sports such as high school athletics.  The bill would also require any operator to utilize official league data from the major sports leagues through 2022.  Other features include modifying the Wire Act to allow for sports betting information to flow across state lines, permitting interstate sports wagering compacts to be entered into by states and tribes (although still subject to Attorney General approval), and shifting the .25% existing excise tax to be placed in a “wagering trust fund” for appropriations for sports betting matters.  Senator Hatch’s bill is the first attempt to maintain federal regulatory oversight and if Congress does pass a bill, there likely will be significant changes as discussions among the different interest groups develop.

The American Gaming Association has been critical of federal regulation of sports wagering.  Chris Cylke, Vice President of Government Relations for the AGA recently stated: ““Since the Supreme Court’s ruling in May, the American Gaming Association has consistently maintained that federal legislation regarding sports betting is not necessary.  That underlying position remains unchanged. At the same time, we remain committed to maintaining an open and constructive dialogue with policymakers considering sports betting legislation at any level of government.”

There has also been recent activity regarding the issue of sports integrity and monitoring of the wagering to prevent fraud in wagering activity.  In late November, several operators, including MGM Resorts, Caesars Entertainment, William Hill and others created the Sports Wagering Integrity Monitoring Association (“SWIMA”) and appointed former New Jersey Assistant Attorney General and Deputy Director of the NJ Division of Gaming Enforcement George Rover as the organization’s Chief Integrity Officer.  SWIMA stated its two primary goals are to provide a safe and secure betting environment for consumers and to protect the integrity of sports betting and its related activity, identify bad actors and discourage activities that profit from unfair betting markets.  The AGA praised the formation of the association;  “The formation of the Sports Wagering Integrity Monitoring Association (SWIMA) serves as another important milestone toward realizing the benefits of a legal, regulated sports betting market in the United States, which provides robust consumer protection, increased transparency and additional tax revenues for state and local governments,” said Sara Slane, AGA’s senior vice president of public affairs. “Today’s announcement comes at a critical time as dozens of states and sovereign tribal nations are poised to pursue legal sports betting in 2019. Moving forward, SWIMA will provide an important hub for all stakeholders to work together, further demonstrating the industry’s commitment to upholding integrity across all facets of a legal, regulated sports betting market.”

 

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