Gaming lawyer: ‘Problematic’ for states to act on sports betting before Supreme Court ruling
Buck Wargo, CDC Gaming Reports · March 10, 2018
A gaming and sports law attorney on Thursday said states risk alienating and influencing the U.S. Supreme Court by passing legislation authorizing sports betting before the high court hands down a decision that could legalize it nationwide.
Daniel Wallach, an attorney with the South Florida firm Becker & Poliakoff, spoke during a panel session on sports betting at the International Masters of Gaming Law Conference in Las Vegas. He said 21 states across the nation have either passed or introduced bills that would enact sports betting, all of which are contingent on the court ruling in favor of New Jersey’s case to legalize sports betting.
Wallach was in the courtroom in December when the Supreme Court heard oral arguments on the matter, and he expects New Jersey to win the case. It’s challenging PASPA, the 1992 federal law that prevents state governments from legalizing sports betting with the exceptions of Nevada, Delaware, Oregon, and Montana. Only Nevada is allowed to take single-sports wagers.
“I wonder what the court is thinking, seeing all of these states jump the gun and effectively telling the court how it will rule,” Wallach said. “I think a little bit less aggressiveness would have been called for.”
Wallach, who said it appears the court may not reach a decision until the end of its term in June, said while it’s possible the aggressiveness of states could undermine their hope to repeal PASPA, it’s likely the justices have made their decision and are finishing their opinions.
“But all of this state activity certainly can’t be helpful (to) the ultimate outcome,” Wallach said.
While New Jersey could win its case and receive the ability to offer sports wagering in-state, Wallach said there’s no guarantee the ruling will be so broad as to enable sports betting to proceed in other states. The other states’ recent legislative action may be moot even with a New Jersey victory. That would leave the issue to Congress, and Wallach and other panelists agreed that nothing will happen on that front.
“It’s not on the top 25 list in Congress and, absent something dramatic and unanticipated, Congress is not going to do diddly,” said Robert Stocker II, the Michigan gaming law attorney who moderated the panel. “There are (midterm) elections this year, so nobody is going to do anything, and then there’s the presidential election in 2020. The next three years we won’t see anything at the congressional level.”
National sports wagering has historically been opposed by the professional sports leagues and the NCAA, with the recent exception of the NBA, which has sought a 1 percent integrity fee of all wagers on league games.
Wallach estimated the opponents only have a 25 percent chance of winning the case, and he suggested supporters of sports wagering compromise and be willing to compensate the leagues, as a way of getting their support. Instead of the 1 percent fee proposed by the NBA, it could be 0.25 percent, Wallach said. Gaming companies, however, have opposed a fee as a burden that would be worth more than 20 percent of revenues.
“I see a scorched-earth battle between the gaming industry and the sports industry that’s going to end up undermining the success of several of these bills (in state legislatures),” Wallach said in an interview afterward. “A quarter point would be the smart plan for everyone involved. If that’s the cost of doing business, that’s better than facing defeat in half of the states in play.”
Panelist Dan Shapiro, vice president of strategy and business development for William Hill Race & Sports Book, said that he expects a favorable decision from the Supreme Court on sports betting, a sentiment shared by most of the panel.
“We are planning a future where PASPA will no longer be valid,” Shapiro said. “We are investing a lot across the U.S. in licensing and technology. We’re bullish on it, and (we) hope to expand.”
What happens next, however, will be determined by how disgruntled the major sports leagues are after the court process, panelists said. If the leagues lose, Shapiro said, they could take their fight to Congress, because they would like to see uniformity in regulations.
Marie Jones, a New Jersey gaming lawyer with the firm Fox Rothschild, said that if states are able to proceed with sports betting after the Court’s decision, she doesn’t envision the Justice Department going after the states under the Wire Act. She speculated that Congress will be silent as well.
“With all that dysfunction, they’re not going to do anything,” Jones said.
Sports wagering will ultimately be a blend of land-based, mobile, and online platforms tied to brick and mortar operations, Wallach said, based on bills currently working their way through state legislatures, and there will likely be no interstate option due to the Wire Act. The one concern is whether states will allow customers to sign up for mobile and online accounts from home or require them to go to a brick and mortar location, as Nevada does.
Wallach said 10 states could be ready to go with sports wagering in time for the NFL season if the Supreme Court rules in the favor of New Jersey. He foresees 30 states could be allowing sports betting within five years.
Buck Wargo, CDC Gaming Reports · March 10, 2018
A gaming and sports law attorney on Thursday said states risk alienating and influencing the U.S. Supreme Court by passing legislation authorizing sports betting before the high court hands down a decision that could legalize it nationwide.
Daniel Wallach, an attorney with the South Florida firm Becker & Poliakoff, spoke during a panel session on sports betting at the International Masters of Gaming Law Conference in Las Vegas. He said 21 states across the nation have either passed or introduced bills that would enact sports betting, all of which are contingent on the court ruling in favor of New Jersey’s case to legalize sports betting.
Wallach was in the courtroom in December when the Supreme Court heard oral arguments on the matter, and he expects New Jersey to win the case. It’s challenging PASPA, the 1992 federal law that prevents state governments from legalizing sports betting with the exceptions of Nevada, Delaware, Oregon, and Montana. Only Nevada is allowed to take single-sports wagers.
“I wonder what the court is thinking, seeing all of these states jump the gun and effectively telling the court how it will rule,” Wallach said. “I think a little bit less aggressiveness would have been called for.”
Wallach, who said it appears the court may not reach a decision until the end of its term in June, said while it’s possible the aggressiveness of states could undermine their hope to repeal PASPA, it’s likely the justices have made their decision and are finishing their opinions.
“But all of this state activity certainly can’t be helpful (to) the ultimate outcome,” Wallach said.
While New Jersey could win its case and receive the ability to offer sports wagering in-state, Wallach said there’s no guarantee the ruling will be so broad as to enable sports betting to proceed in other states. The other states’ recent legislative action may be moot even with a New Jersey victory. That would leave the issue to Congress, and Wallach and other panelists agreed that nothing will happen on that front.
“It’s not on the top 25 list in Congress and, absent something dramatic and unanticipated, Congress is not going to do diddly,” said Robert Stocker II, the Michigan gaming law attorney who moderated the panel. “There are (midterm) elections this year, so nobody is going to do anything, and then there’s the presidential election in 2020. The next three years we won’t see anything at the congressional level.”
National sports wagering has historically been opposed by the professional sports leagues and the NCAA, with the recent exception of the NBA, which has sought a 1 percent integrity fee of all wagers on league games.
Wallach estimated the opponents only have a 25 percent chance of winning the case, and he suggested supporters of sports wagering compromise and be willing to compensate the leagues, as a way of getting their support. Instead of the 1 percent fee proposed by the NBA, it could be 0.25 percent, Wallach said. Gaming companies, however, have opposed a fee as a burden that would be worth more than 20 percent of revenues.
“I see a scorched-earth battle between the gaming industry and the sports industry that’s going to end up undermining the success of several of these bills (in state legislatures),” Wallach said in an interview afterward. “A quarter point would be the smart plan for everyone involved. If that’s the cost of doing business, that’s better than facing defeat in half of the states in play.”
Panelist Dan Shapiro, vice president of strategy and business development for William Hill Race & Sports Book, said that he expects a favorable decision from the Supreme Court on sports betting, a sentiment shared by most of the panel.
“We are planning a future where PASPA will no longer be valid,” Shapiro said. “We are investing a lot across the U.S. in licensing and technology. We’re bullish on it, and (we) hope to expand.”
What happens next, however, will be determined by how disgruntled the major sports leagues are after the court process, panelists said. If the leagues lose, Shapiro said, they could take their fight to Congress, because they would like to see uniformity in regulations.
Marie Jones, a New Jersey gaming lawyer with the firm Fox Rothschild, said that if states are able to proceed with sports betting after the Court’s decision, she doesn’t envision the Justice Department going after the states under the Wire Act. She speculated that Congress will be silent as well.
“With all that dysfunction, they’re not going to do anything,” Jones said.
Sports wagering will ultimately be a blend of land-based, mobile, and online platforms tied to brick and mortar operations, Wallach said, based on bills currently working their way through state legislatures, and there will likely be no interstate option due to the Wire Act. The one concern is whether states will allow customers to sign up for mobile and online accounts from home or require them to go to a brick and mortar location, as Nevada does.
Wallach said 10 states could be ready to go with sports wagering in time for the NFL season if the Supreme Court rules in the favor of New Jersey. He foresees 30 states could be allowing sports betting within five years.
