Gaming industry officials have expressed concern that the Justice administration might attempt to amend legislative rules governing sports betting — which have to be filed with the secretary of state before Oct. 7 — to mandate that the state’s casinos share sports betting profits with professional sports leagues.
That’s despite legislators soundly rejecting previous attempts by the Justice administration to mandate paying “integrity fees” to the leagues or require that the casinos enter into contracts with those leagues.
Industry concerns were heightened by the abrupt resignation of Lottery Director Alan Larrick and the ongoing suspension of Lottery general counsel Danielle Boyd, who had both championed sports betting rules that do not include compensation to the sports leagues.
Earlier this month, West Virginia Gaming and Racing Association President John Cavacini said the sports leagues are trying to use the rule-making process to force policies that the Legislature rejected in the regular session.
“It would be very hard for the tracks to go back and start all over with a new set of rules and regulations,” he said, adding, “We object to them bringing the same old stuff they lost on in January, February and March, and trying to get them through the backdoor through amending rules and regulations.”
Meanwhile Thursday in Congress, a House subcommittee hosted the first public hearing on possible federal legislation to regulate sports betting at the state and tribal level.
Those testifying included Jocelyn Moore, executive vice president of the National Football League, who said that without federal oversight, “We are witnessing a regulatory race to the bottom.”
She said the NFL is asking Congress to consider federal regulations of sports betting, including requiring operators to contract with the league for official game data, to restrict or ban “risky” in-game wagers on individual performances that she said are more susceptible to fixing, and to prevent the use of intellectual property, including league and team logos, without consent.
“Our product is widely available for unofficial data providers to abuse,” she said.
In West Virginia, Gov. Jim Justice has pushed for concessions in the state’s new sports betting law to compensate professional sports leagues, first proposing paying a portion of state profits to the leagues through an “integrity fee” and more recently proposing that the state’s casinos be required to contract with the leagues for game data.
During Thursday’s hearing, Sara Slane, senior vice president of the American Gaming Association, and Becky Harris, chairwoman of the Nevada Gaming Control Board, argued that paying fees to sports leagues would make legal sports betting uncompetitive with existing illegal and offshore markets, and said legal sports betting provides transparency to help assure the integrity of the games.
Both noted that sports betting has a low profit margin, and that paying taxes or fees to professional sports leagues could make legal sports betting uncompetitive with illegal, black market betting using bookies or offshore Internet sites.
Part of developing successful legal sportsbooks, they said, requires drawing bettors away from the illegal operators, who don’t require valid identification, who often take bets on credit, who don’t report big wins to the Internal Revenue Service, and who frequently can offer better odds.