On Thursday, two federal lawmakers announced their plans to file legislation that would make drastic changes to the U.S. sports betting industry. The Supporting Affordability and Fairness with Every Bet Act, aka the SAFE Bet Act, would get Washington involved in the market. Among other things, if passed, the proposal would set restrictions on advertising and require operators to conduct affordability checks on certain players.
The billâs sponsors are U.S. Rep. Paul Tonko, D-New York, and U.S. Sen. Richard Blumenthal, D-Connecticut. Both lawmakers have called for changes in sports betting for years, though not quite to the extent the 50-page document details.
âThis relationship between the gambling industry and sports has reached intolerably dangerous levels, and itâs well past time for Congress to just step up and make a difference,â Tonko said Thursday at a press conference on Capitol Hill, not far from where Maryland sports betting is legal.
Tonko filed the bill, HR 9590, which has been assigned to two committees: The House Committee on Energy and Commerce, and the House Committee on Natural Resources. The latter panel will be involved because it typically deals with tribal matters.
Whatâs In The SAFE Act Proposal
For starters, the bill would require any state that has legalized sports betting to seek approval from the federal government to do so. Each state would need to submit its laws and name the state agency responsible for oversight to the U.S. Attorney Generalâs office. The attorney general would then have 180 days to review the application, then either approve or reject it. Approved states could operate sports betting for three years before needing to reapply.
Approved states would have to ensure operators are meeting the federal standards at a minimum and can enact rules going beyond that. States would still have the right to tax operators.
âState regulation is faint-hearted and half-baked,â Blumenthal said. âThatâs why we need a national standard. Not to ban gambling, but simply to take back control over an industry that is out of bounds, literally operating outside the bounds of decency and respectability.â
One of the federal standards involves advertising restrictions. Sports betting operators, such as DraftKings Maryland Sportsbook, would not be able to run commercials at times when children are likely to watch or listen. That would be between 8 a.m. and 10 p.m. local time, or during any live sporting event. Operators also could not promote such inducements as new customer bonuses or free bets.
Operators also would not be able to take player prop bets on college athletes, a move already taken by Maryland Lottery and Gaming this year. Sportsbooks also could not take wagers on a game after it starts. The latter would include a ban on the use of artificial intelligence to set lines on microbets, which are bets on the outcome of a specific play or series during a game or match. AI technology also could not be used by sportsbooks to track a bettorâs wagers, nor could it be used to craft unique promotional offers to individuals who might sign up for Maryland sportsbook promo codes.
In addition, the bill would require operators to restrict customers from making more than five deposits in a 24-hour period, or use credit cards for making deposits. The SAFE Bet Act also would mandate sports betting apps to conduct affordability checks on betters who deposit more than $1,000 over 24 hours or $10,000 or more in a 30-day span. Operators would need to essentially perform a credit review on the bettor and confirm that the deposit was not more than 30% of their monthly income. Similar checks are required in Great Britain.
SAFE Act Opponents Quick To Respond
Gaming industry groups and supporters came out with their opposition to the SAFE Bet Act as soon as it was announced. Both the iDevelopment and Economic Association and the American Gaming Association criticized the legislation as an overreach that would threaten jobs and tax dollars for participating states.
âiDEA remains committed to working with lawmakers, regulators, and stakeholders to enhance player protections in a way that empowers states and preserves the benefits of a well-regulated, competitive market,â the trade group said in a statement. âWe urge Congress to reject this misguided federal mandate and instead support state-based solutions that are already working across the country.â
The AGA added the bill would create a ânationwide prohibitionâ on sports betting, which is legal in more than 30 states including Maryland sports betting apps.
âSix years into legal sports betting, introducing heavy-handed federal prohibitions is a slap in the face to state legislatures and gaming regulators who have dedicated countless time and resources to developing thoughtful frameworks unique to their jurisdictions and have continued to iterate as their marketplaces evolve,â it said.
There was also opposition to the bill inside Congress. U.S. Rep. Dina Titus, a Nevada Democrat whose district includes most of the Las Vegas Strip, said her colleaguesâ proposal âreinforces the outdated and unwarranted prejudice against gaming.â Titus added that the proposal would undermine licensed operators trying to compete against offshore operators, which donât pay taxes and are not held to the same standards.
âWhile the SAFE Bet Act is perhaps well-intentioned, pre-empting state gaming regulators by outlawing most forms of advertising and restricting the types and methods by which customers can place bets is a misguided approach,â said Titus, the co-chair of the Congressional Gaming Caucus.
Our Analysis
Thereâs no such thing as a perfect bill, and the SAFE Bet Act is far, far from that standard. But also keep in mind: Most bills that become laws get amended along the way. Some are changed drastically through the process, and some are filed in hopes of spurring changes within an industry.
Responsible gaming advocates have called for many of the steps the bill outlines in hopes of protecting individuals at risk of developing addictive or other gambling problem behaviors. However, many of the legislationâs proposals seem draconian, such as the outright ban on in-game wagering. A key reason why the major sports leagues that were once opposed to legalized sports betting now partner with sportsbooks, such as BetMGM and Caesars, is that in-game wagering increases fan engagement.
Also, while legalized sports betting is a relatively new concept nationwide, sports betting itself is as old as sports itself. People with the means still will be able to wager on markets that the SAFE Bet Act would ban. Those who might be flagged by affordability checks would also go elsewhere, either offshore or to a local bookie, and not face such limitations. However, they also might not receive some of the player protections that a regulated market provides.
I did find some items in the bill intriguing. While states would need to gain approval from the U.S. Attorney General, the bill also lets the Attorney General approve âinterstate sports wagering compacts,â which would allow two or more states or tribes to enter into an agreement. That would be a boon for sports betting exchanges handcuffed by the Wire Act. Thereâs also language to establish a national self-exclusion list, a move that is long overdue.
Even though Iâm not a fan of banning college player prop bets nor of setting a national age limit at 21, another provision within the SAFE Bet Act, I admit there is some logic to having national standards for those. I donât believe banning player prop bets will keep student-athletes from being harassed through social media, but those wagers make up just a small percentage of the legal market. A consistent standard across the country would help keep sportsbooks from inadvertently offering markets not allowed in certain states; that would reduce their risk of getting fined for violating state rules.
And a law banning 18-year-olds from betting wonât stop them from doing so. It just directs them to the unregulated side of the industry. However, only a few states and the District of Columbia allow adults who are that young to sign up for accounts. Many in the industry, including Caesars, already have policies in place to only allow those 21 and up to place bets. A national age limit is a good idea, if it encompasses all types of gaming, such as horse racing, lottery, fantasy sports and casinos.
Conclusion on Federal Sports Betting Proposal
The SAFE Bet Act is one of thousands of bills that will be introduced this year, but only a few will make it to President Joe Bidenâs desk. Considering this bill does not yet have any sponsors from either party, its odds are long for passage this year. But donât expect Tonko or Blumenthal to go away anytime soon.
Tonko was one of the key architects of the Horseracing Integrity and Safety Act, which was passed in late 2020. However, Tonko and U.S. Rep. Andy Barr, R-Ky., worked for nearly six years to get it over the finish line. It also took several other lawmakers, including influential leaders such as U.S. Sen. Mitch McConnell, R-Kentucky, and the late U.S. Sen. Dianne Feinstein, D-California, to get on board.
What that means is thereâs still time for the sports betting industry to make some changes on its own to further protect at-risk individuals from developing or worsening destructive behaviors and to tone down on the advertising. The more they can accomplish that, the lesser the chance a bill like the SAFE Bet Act passes.
However, with Tonko and Blumenthalâs announcement, the clock has officially started.
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