sports betting

Experts call for thought-out approach to sports betting regulation in the US

Jake Williams, head of legal for the US at Sportradar, said that alignment with the major US sports leagues was a good idea for sports betting stakeholders, but stopped short of taking sides in a hot debate over the presence or absence of an integrity fee and official data.

Speaking at last month’s Betting on Sports conference, Williams defended the way the sporting leagues had been approaching the mechanism of an ‘integrity fee’, while suggesting that Australia is an example of why it might be worth the gambling industry to consider getting the sports on side.

He said: “I think the leagues in the beginning had certain policy considerations they wanted to push and if you’ve read any articles or watched any clips of Roger Goodell, Adam Silver or any of the other commissioners, they talk about the integrity of the game first and foremost and then further down the line they will talk about their intellectual property, they’ll talk about other policy aspects.”

Before adding: “I’m from Australia and I’ve seen this idea of an integrity fee (usually termed ‘product fees’ in Australia) work relatively well there in terms of having alignment with the sports leagues there engaged and active with sports betting.

“In terms of that mechanism, there has been a lot of push back certainly that one per cent of turnover is a bad idea and will stifle sports betting – I think that’s a separate argument. In terms of a mechanism of having sports leagues aligned with operators, I think that’s a good idea.”

Representing Sportradar, the only sports data company that works with US sports leagues to redistribute official data for betting purposes outside of the US, Williams also expressed his view that the use of official data will continue to be a talking point and needs to be well thought out. The landmark NBA and MGM Resorts agreement may cause a push towards US leagues and operators engaging in commercial negotiations to handle certain key policy objectives such as use of official league data.

To explain this further, he detailed: “If a legal regulated sportsbook in the state of New Jersey, Mississippi, wherever it may be, wants to offer bets on the FIFA World Cup and you have a mandate that they must take official betting data from the sports league or federation putting on the event, what do you expect that bookmaker to do? I don’t know whether you can call up someone in Lausanne or Zurich to get access to the official betting data feed.”

He concluded: “Nowhere else has official data been mandated in law and if we are going to go down that route, which the US league’s prefer and the operators have pushed back on, then we will have to have a well thought out approach for this brand-new concept in the US. It may take a state doing it to see how it plays out.”

Williams was part of a panel that was largely agreeable in its assessment of both the Wire Act, whose “days are numbered” according to Princeton Global Strategies Managing Partner George Rover, and the need for cross-state information sharing to prevent suspicious betting activity, but one which became fractured with conflicting opinions on the aforementioned ‘integrity fee’.

Rover said: “For the leagues now to say, they’re entitled to a financial windfall, by simply saying you owe us money for this, I just don’t think they’ve made the case. And I really do think that they’ve created their own issue by not trying to work with the state of New Jersey or regulators before the litigation and even after it when they lost.”

He added: “I think the leagues do have a lot of gall to ask for an integrity fee. They battled the state of New Jersey for nine years. I was there when that was occurring. Not once did they want to come to the table of the regulator or the state about resolving the issue. Not once. Total radio silence. Even after the case no conversations with regulators in the state of New Jersey to try and resolve the issues.”

The comments came after Daniel Wallach, gaming and sports law attorney at Becker & Poliakoff, argued that the rhetoric around the fact that the leagues opposed betting needs to ‘be put to bed’ if the industry has any hopes of progressing on the issue.

“The league is a stakeholder now,” said Wallach, “and they’re the only stakeholder outside of federal law enforcement that has multi-jurisdictional investigative and monitoring resources at its disposal.

“They (the NFL, NBA, MLB, NHL and NCAA) bring something to the table that no stake licence holder and no state regulator can possibly match, which is the ability to investigate and monitor, and provide intelligence about all these activities over and across state lines. The jurisdiction of the state regulator stops at that border and there is no mandatory sharing of information across those state lines.”

The pair were also in disagreement over the need for federal involvement in the expansion of sports betting across the country, with Rover predicting: “There will be a strong push by people in the industry, and actually a lot of the regulators, that the federal government should stay out of it and let the states handle it.”

However, Wallach countered that the current state by state approach invests all of the discretion in betting operators to determine what constitutes a suspicious bet, and queried how quickly this message would be communicated to betting operators in other states.

Instead, he suggested that a federal framework “could provide a national integrity platform through which all stakeholders would be required to share anonymised betting data in real time so that it can be aggregated and evaluated by regulators, the leagues and stakeholders, and compared to global betting transactional data, to form a true early warning system.”

Andrew Winchell, chief of staff for New York Senator John Bonacic, concurred that individual state rules to maintaining integrity could be easily circumvented without cooperation. For example, he questioned the point in having a mandatory report for bets over $10,000 when someone could quickly place five bets of $9,000 in five different states.

“The only way you catch people who are trying to spread out major bets, or if there is a match-fixing issue, is to have some sort of interstate compact for integrity or a federal framework dealing with integrity,” said Winchell. “The match is going to be in one place, the bets are being struck in another so figuring out if something untoward is happening will be difficult at best.”

Williams, Rover, Wallach and Winchell were speaking on the ‘Betting on Americas’ track alongside Joseph W. Grad, Founder of Grad Gaming Law, and session moderator Sue Schneider, a Chief Advisor to next year’s Betting on Sports Americas conference in New York (23-25 April 2019).