What Is The GAME Act?
Lost in the debate about sports betting recently was the congressional GAME Act. What is the GAME Act? The GAME Act, which stands for the Gaming Accountability and Modernization Enhancement Act, is a nonsensically-named attempt on the part of New Jersey rep Frank Pallone, Jr., to establish an alternative avenue to sports betting legalization if the state’s Supreme Court challenge of the Professional and Amateur Sports Protection Act (PASPA, 1992) didn’t bear fruit. The GAME Act – aka HR 4530 – would have effectively repealed PASPA, and it was introduced in May 2017, designed to be considered concurrently to the build-up in the PASPA case.
Naturally, the SCOTUS overturned PASPA as unconstitutional and in violation of both the 10th Amendment and the long-standing governmental “Equal Sovereignty Doctrine”, rendering the GAME Act moot. However, given that the proposal was debated in congress for an entire session and garnered lots of bipartisan support nationwide, perhaps the bill had some small influence on that Supreme Court decision. We shall never know. Now, the question is whether or not the GAME Act – or something like it – will rise to replace the now-defunct PASPA. The federal government has made no secret of its desire to continue regulating sports betting throughout the country (which is beyond their purview to begin with, but that’s a different story).
What Will Happen If The GAME Act Is Passed?
Right now, the GAME Act – which is still technically on the table – doesn’t really add anything to the conversation. Since PASPA was overturned and the federal government hasn’t replaced it with anything yet, many states have taken the initiative to set up their own sports betting rules and regulations. By the end of 2018 (PASPA was overturned on May 14 of 2018, remember), 8 states were offering brick-and-mortar sports betting services for residents and visitors. These, in chronological order, were Nevada (which already had full-service, single-game sports betting up and running for decades), Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, and New Mexico. Other states legalized (Arkansas) or partially legalized (New York, Connecticut) the pastime before the end of 2018, but their front-facing betting lounges were delayed a bit into 2019. As for the rest of the states, most of them are also considering sports betting legislation, and the activity should be supported pretty much throughout the US by 2020-2022 or so.
It is unclear what the GAME Act would do to alter the landscape now that PASPA is gone. The GAME Act had specific provisions in its language that all states in the country would have the ability to establish, monitor, and regulate its own wagering industry, and it also codified the right of the states to individually offer Internet-based sports betting to residents. This would all still be geo-fenced in accordance with the Interstate Wire Act (1961) and the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), but since those federal laws were not also overturned by the Supreme Court, the states must adhere to them anyways. The only real thing a law like the GAME Act (or whatever replaces it) brings to the table is perhaps a flat “integrity fee” system, which local state sportsbooks vehemently oppose near universally, as do most of the states that have already legalized sports wagering. Plus, there’s nothing stopping any of the major US sports leagues (NFL, NCAA, MLB, NBA, NHL) from individually negotiating “integrity fees” with any state they wish to lobby for the privilege. Plus, the federal government is already getting 5% of every state’s sportsbook revenue off the top, and no law is likely to increase that figure in the current climate.
How Would The GAME Act Help The States?
Before PASPA was overturned by the Supreme Court, the GAME Act – if passed – would have significantly helped the states by giving each one the opportunity to offer sports betting on their own terms, provided they complied with other existing federal laws. But this is essentially what happened the second that the SCOTUS struck PASPA down, obviating the GAME Act almost entirely. In the current context, the GAME Act – which could still become law (but likely won’t in its current form) – wouldn’t really do anything at all to help the states. In fact, such a law, implemented now, would be a decided hindrance to the states, as it would return the ultimate purview of sports betting back to the federal government – an entity that, as PASPA proved for 25 years, cannot be trusted to manage the financial affairs of its constituent members’ gambling industries. As a general rule, federal laws do not “help the states”, regardless of their industry of application, as such laws as a matter of course diminish individual state sovereignty.
How Would The GAME Act Impact Daily Fantasy Sports?
One of the areas the GAME Act differs from previous gaming-related laws is its classification of daily fantasy sports (DFS) as gambling, something not even the UIGEA did, even as it almost entirely dismantled the online poker industry. The DFS industry often uses the UIGEA’s differentiation between daily fantasy contests as “games of skill” (rather than constituting gambling, which typically comprises “games of chance”) as a legal defense against anti-gambling legislation that could keep fantasy websites out of certain state markets.
This could lead to the unintended consequence of the GAME Act losing support from the professional sports leagues, which have recently softened their stance on sports betting in light of the practice’s increasing popularity and the PASPA overturn, as the legalization of sports wagering is resulting – as predicted – in higher-than-ever viewership numbers. The leagues have, for the most part, formed solid working relationships with the major DFS operators, which professional sports executives view as partners in driving engagement with their dedicated fan bases.
That being said, if the GAME Act (or something like it) passes, it would not necessarily mean that DFS would be in any danger of being unable to operate in any state market. In fact, the fantasy sports industry could see a boom like it never has before by opening up the possibility of integrating itself into the casino industry that would also likely get a boost by the passage of the law.
Will The GAME Act Be Passed Into Law?
Now that you know what the GAME Act is, you’re probably curious if it will ever be passed into law. As things currently stand, the answer is almost certainly “no.” However, that doesn’t mean that the federal government is content to allow the states to continue operating their own “non-unified” sports wagering industries. Indeed, the opposite seems true, with several congresspersons already offering up alternative, sweeping federal sports betting laws. New York senator Chuck Schumer, one of the busiest bodies in congress, has already proffered a “framework” – along with fellow senator Orrin Hatch (R-Utah) – that would essentially handcuff states post-PASPA. Dubbed the “Consumer Protection and Sports Integrity” bill, it would override a number of things currently left up to the states. For example, this nonsense would:
– Prohibit anyone under 21 from betting on sports. Many states – particularly those with tribal gaming presences – set their age minimums to 18. Schumer conveniently omits any discussion re this point.
– Prohibit “targeted advertising” to “young people” (without defining what constitutes either of those terms, apparently leaving such nebulous designations up to the federal government’s “interpretation.”
– Force states and sportsbooks to employ “approved” sporting data providers.
– Force states to share all their data with the federal government in order to combat “match-fixing.”
– Force sportsbooks to only offer wagers “approved” by the leagues in question.
– Force sportsbooks to use “official league data” (which is an added cost, as this requires licensing rights).
– Force states to seek federal approval before offering any sports betting product or service (which, ostensibly, gives the federal government, as with PASPA, the sole discretion re which states are allowed and not allowed to offer sports betting).
It is clear that the federal government – or at least powerful, influential figures within that government – intend to apply an overarching rubric to state-by-state legal sports betting. This will lead to more expensive wager prices (as house takes will be increased to cover the increased overhead), less choice, and less ability for states to cater to the needs of their own residents, as sports betting is not and never has been a one-size-fits-all proposition. So no, the GAME Act will not be passed into law. But something far worse probably will. What is the GAME Act, then? In the near future, it will probably be a fond memory of what could have been.