The US gaming industry has long opposed PASPA, the 1992 federal law that prohibited sports betting in almost all states. But now the lobbying effort to kill PASPA (Professional and Amateur Sports Protection Act) has gone into full gear.
This week the American Gaming Association (AGA), the foremost lobbying group for casinos and other gaming companies, hired a Boston-based strategist, who has previously worked on the presidential campaigns of John Kerry in 2004 and Hillary Clinton in 2008, to aid in the effort to get sports betting legalized.
“There are few laws that have failed more spectacularly than PASPA,” AGA president Geoff Freeman tells Yahoo Finance. “It was passed under the auspices of protecting the integrity of games… But in the 25 years since it was enacted, we’ve seen trillions of dollars bet underground on sports, and there’s no way to track it. It’s all happening in the dark, in unregulated markets… PASPA is making the games we all enjoy less safe.”
Of course, everyone would expect Freeman to say that. The AGA exists to advocate on behalf of its members, most of which are big brick-and-mortar casino companies like Las Vegas Sands (LVS), Wynn Resorts (WYNN), and Caesars Entertainment (CZR), though also British bookmaker William Hill and Japanese video game maker Konami, among others.
The AGA estimates that about $90 billion will be bet on football games this season (pro and college), with 98% of the bets made illegally under PASPA.
And while the state-by-state tax benefits of repealing PASPA have been a popular talking point for years, a recent Nielsen study commissioned by the AGA shows that major TV networks, too, should also support legalized sports betting because they stand to gain viewership and ad dollars.
If sports betting were legalized, the AGA concludes using Nielsen’s data, the number of regular-season sports viewers betting on games would jump from 40 million to 57 million.
Wagers placed in casinos are on the rise, and many say that repealing PASPA would help the casinos grow even more. On the other hand, repealing PASPA would also be the first step in opening the flood gates to iGaming (Internet betting) companies, which could actually cut into the casinos’ businesses. The second step would be trying to amend the Federal Wire Act, which makes the use of Internet for sports betting a federal crime, so that it would not apply to state-authorized sports betting.
On the potential competition of iGaming to casinos, Freeman says, “Our industry would not support a repeal of PASPA unless we also thought it was good business,” and that there is “consensus” across the casino industry about repealing PASPA. As for lobbying for modification of the Wire Act, “The fact is we need to deal with PASPA first, that’s where our efforts are focused. Once we succeed in getting that done, we will cross that other bridge.”
In other words: Any concerns about potential competitive threats from mobile-based gaming operators like DraftKings and FanDuel take a back seat until PASPA is conquered.
Las Vegas Sands CEO Sheldon Adelson, for one, has said that he virulently opposes daily fantasy sports. Nevada’s Gaming Control Board ruled last fall that daily fantasy sports companies are gambling operators, which led DraftKings and FanDuel to leave the state. But this month a different DFS company, USFantasy, which uses a pari-mutuel structure like horse racing betting, opened up a window in a number of Vegas casinos.
The major American sports leagues, Freeman says, are on board with repealing PASPA too, though maybe not all of them are saying so. NBA commissioner Adam Silver has been a vocal advocate for legalizing and regulating PASPA; he wrote a New York Times op-ed in 2014 on the topic.
Freeman says he has spoken with Silver on the issue, but as for other league commissioners, “I trust they are probably not far behind. Whether they’re willing to say that publicly is a different issue, but I’m optimistic.”
For more from Freeman on the effort to legalize sports betting, including the gaming industry’s view of daily fantasy sports, watch the above Sportsbook video.