What Is The GAME Act?
The Gaming Accountability and Modernization Enhancement Act, otherwise known as the GAME Act, is a piece of legislation introduced by the US Congress in May 2017 aimed at repealing all federal prohibitions on legal sports betting and gambling in general. However, with the current talk about legalizing sports betting, we may not have to worry about this here in the near future.
The bill, put forward by the House Energy and Commerce Committee, chaired by Representative Frank Pallone (D-New Jersey), the bill’s sponsor and chief architect, would also allow the states to pass laws legalizing online gambling within their own jurisdictions. The GAME Act would affect these changes by repealing the Professional and Amateur Sports Protection Act of 1992 (PASPA), which bans state-sanctioned sports betting in all but four states: Nevada, Delaware, Montana and Oregon. If passed, the GAME Act would give regulatory power to the individual states, but gambling operators in those states would need to submit proof of their compliance with federal banking laws and consumer protection mechanisms to the Federal Trade Commission.
As it stands right now, the GAME Act exists as a draft for discussion purposes only, but so far the bill has received a fair share of support from states looking to expand legal sports betting and online gambling with legislation of their own. The American Gaming Association (AGA), the lead lobbying group for US sports betting, is also behind the GAME Act, but the political outlook for the bill is uncertain, given the current situation in Washington, D.C. No definite timeline for legislative action on the bill has been decided as of yet, but the AGA has made the GAME Act one of its primary focuses this year have committed to put the bill on President Donald Trump’s desk before the end of his first term.
What Would Happened GAME Act Do If Passed?
The GAME Act’s scope is comparatively far-reaching in that, if it successfully repeals PASPA, single-game sports betting, whether land-based or on the internet, will be legal nation-wide rather than solely in four states that already had regulatory laws on the books prior to 1993. Outside Nevada, which regulates all forms of sports betting and has since the 1940s, gambling on sporting events has been strictly limited to Delaware, Montana and Oregon, which authorize different forms of sports lotteries but cannot expand into the full gamut of sports betting offerings. If the GAME Act is passed, US gambling laws will more closely resemble those of the UK, which regulates sports betting as a widely practiced pastime of millions of its citizens each year.
As we have established, gambling on sports is more or less prohibited across the country under PASPA and other laws like the Federal Wire Act of 1961 and the UIGEA, but several states have begun pushing back in recent years. The fact Nevada and the other four aforementioned states and their gaming industries were allowed to keep sports betting while other states, even those with legal commercial casinos, were not has led to a resurgence of the Equal Sovereignty doctrine. These states, which include California, Mississippi, West Virginia and others, have all proposed or are preparing to pass legislation that would obviate the ban on sports betting if PASPA is repealed.
Contention regarding PASPA’s selective prohibition on sports betting is also a central tenet of New Jersey’s Supreme Court case, in which the Garden State’s Congressional delegation and Governor Chris Christie will argue PASPA violates the 10th Amendment on the grounds that it effectively treats different states differently. At the time of PASPA’s passage, New Jersey was given a year’s grace period in which to pass legislation regulating sports betting, but its legislature failed to do so. New Jersey has been one of the fiercest agitators for the states’ right to regulate gambling on sporting events ever since.
How would the GAME Act help the states?
A New Jersey victory in its anti-PASPA Supreme Court case or the GAME Act being signed into law by President Trump would be a boon to any state that wanted to cash in on the worldwide sports gaming industry, estimated to be worth hundreds of billions of dollars. Among the many advantages of the GAME Act is the effect it would have on the bottom line for many states in need of new sources of budgetary funding, as Nevada has demonstrated time and again that the sports betting industry can provide hundreds of millions in taxable revenues. The current legal climate for sports betting in the US has driven American bettors to rely on offshore sports gambling websites that operate outside the reach of the US legal system, depriving the states of untapped revenue streams and exposing American gamers to unnecessary financial risk.
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 Unlawful Internet Gaming Enforcement Act of 2006 (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 a “game of skill” and gambling, a “game 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 a chance at 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 passes, it would not necessarily mean the 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.
Political hurdles for the GAME Act
Though there are numerous advantages to be had for the states, the gambling industry and bettors by the passage of the GAME Act, the bill could still face some difficulties resulting from a political deadlock in Washington. Congress, busy with battles over healthcare reform, the federal budget and taxation issues, may not have the collective political will to push the GAME Act through to full passage anytime soon.
Though the short-term prospects of the law being passed could be in some doubt, an expansion of gambling and loosening the laws pertaining to sports betting was one of President Trump’s campaign talking points. Given the favorable attitude toward sports betting at the White House and in broad swaths of the American public, to say nothing of casinos and statehouses around the country, sweeping gambling reform seems like more of a possibility now than it has in decades.