Additional reporting by K. Morrison
When New Jersey filed briefs with the Supreme Court on the future of sports betting last August, many legal experts predicted that the conservative court would rule in favor of Gov. Christie and strike down the Bradley Act as unconstitutional.
After Gov. Christie left office, the action was renamed for the current governor, and on May 14, 2018 the High Court handed state’s rights advocates and legalized betting proponents a victory in Murphy v. National Collegiate Athletic Association (NCAA). The 7-2 decision drove sports betting interests in 46 states currently without legal sports betting into the end zone. The Professional and Amateur Sports Protection Act of 1992 (PASPA/Bradley Act) was shut out in overtime.
The sports leagues, who helped champion the law in the early 1990s, retreated to the sidelines while betting interests took to the field and to the locker rooms to start hammering out a vision for the future. Betting company stocks soared on the news, and the first of many expected mergers and acquisitions took place with the UK’s Paddy Power Betfair snatching up American fantasy sports company, FanDuel.
While the Supreme Court’s decision was predictable – about 20 states already had legislation in the works or on the books prior the Court’s final action – this is still a very important time wherein bad decisions could set some states back in the race to capture much-needed revenue streams. With potential competition all around them now, will Pennsylvania hold on to the thought they can levy a 34% tax on action? How will West Virginia integrate sports betting regulation into a lottery commission that already oversees gaming at racetracks and a casino?
For these answers and more, we turn to one of the nation’s most experienced lawyers and regulators in the matter, AG Burnett.
Mr. Burnett is currently a partner at McDonald Carano, a Nevada business and gaming institution of almost 70 years. Prior to that he was Chairman of the Nevada Gaming Control Board (NGCB) from 2012 through 2017. During that time he also served on various committees, was responsible for gaming related security investigations, negotiated and held oversight of tribal gaming compacts, and had direct involvement with the Nevada legislature on all gaming matters during his tenure.
He also worked extensively with regulators in other jurisdictions on gaming industry matters of common interest.
Before heading up the NGCB, Burnett was Senior Deputy Nevada Attorney General representing the Nevada Commission on Sports and the NGCB at the time the State Gaming Commission lifted a long-held ban on gambling on college sports in Nevada, much to the displeasure of the the NCAA and federal lawmakers who were attempting to ban all betting on college sports.
World Casino News (WCN): What do you see as the best way forward – a common national regulatory framework, or individual states setting up their own without a set of mandatory standards for intra-state pools?
AG Burnett (AG): I think the gaming states, as evidenced by the media release the chief regulators put out recently, are more than capable and able to regulate sports betting. Sports betting regulation, at its core, is the same overall style of regulation as that for other gaming industry components. The state regulators have the experience, know-how, and ability to do it and do it well. I have literally no questions on that. There are nuances to sports betting, but the regulators around the country have been studying those and are well-equipped to adapt them into their normal course of business.
(WCN): As a regulator, you found yourself in a few seemingly untenable positions over the years, such as the 2015 amicus brief request in a major Nevada operator lawsuit. My understanding is that you were between a rock and a hard place, yet somehow the GCB managed to maintain its statutory distance without the help of independent outside counsel. In light of that experience, if sports betting is regulated at the state level, do you think it’s imperative that individual boards be given sufficient budgets to employ outside counsel and remove at least that possibility of political influence over their operations?
(AG): I don’t think the addition of sports betting regulation changes that analysis. Regulators must do the jobs they are tasked with in an independent, non-political manner. Sometimes the regulators in gaming states are also lawyers themselves, as is often the case in Nevada, and that can come in handy in difficult situations. I think there’s a reason that is often the case. Some states have former law enforcement officials in gaming regulatory jobs, and I would imagine that’s for a good reason too.
(WCN): In the absence of immediate action by the US Congress, many states will move forward on their own to capture the revenue streams through taxation and fees. If individual states set up their own regulatory bodies – should they be an extension of existing land-based governing or separate bodies? New Jersey aside for the moment, do you think it’s a good idea for states like West Virginia to relegate the authority to their lottery boards?
(AG): I don’t want to step in the shoes of legislators in the various states, but in my opinion having those who currently regulate gambling be the ones who regulate sports betting is reasonable. I’m not sure why you’d reinvent wheel, unless you have a team of professionals ready, willing, and able to start regulating sports betting from scratch. Again, regulating sports betting in its basic form is very similar to regulating gaming. There is an investigative process, a licensure mechanism, and ongoing regulatory requirements to fulfill. As long as the basics are there, you have what you need to start with. There are nuances to sports betting that do require expertise, so having current gaming regulators add that expertise to their ongoing repertoire seems reasonable to me.
Be sure to read Part II on Wednesday as we go in-depth on some burning questions and ask for Mr. Burnett’s reasoned insights and opinions on issues such as:
- Illegal bookmakers’ incentive to play straight
- How revenue gains will likely be spent
- College sports’ vulnerability to corruption and whether they should be included
- Match-fixing, need for “integrity fee” tax