Congressional sports betting hearing FAQ: What to know

A House Judiciary subcommittee will hold a hearing Thursday in Washington to examine whether federal sports betting guidelines are needed. AP Photo/Pablo Martinez Monsivais

A House Judiciary subcommittee will hold a hearing Thursday in Washington to examine whether federal sports betting guidelines are needed as more states elect to open legal sportsbooks.

The hearing -- titled "Post-PASPA: An Examination of Sports Betting in America" -- is scheduled for 10 a.m. ET and will be livestreamed on the House Judiciary Committee's website.

The hearing comes just over four months since the U.S. Supreme Court struck down a federal statute that had for 26 years prohibited states from authorizing Las Vegas-style sports betting. In its opinion, the Supreme Court said Congress could regulate sports betting, if it elects to, but for now, the decision is up to states.

Here are some answers to some frequently asked questions about the first congressional hearing in a decade focused on sports betting:

Isn't sports betting already legal?

Not nationwide. In May, the Supreme Court invalidated the Professional and Amateur Sports Protection Act of 1992, a federal statute that had restricted state-sponsored sports betting primarily to Nevada. States are now allowed to authorize sports betting. Delaware, Mississippi, New Jersey and West Virginia have joined Nevada and begun offering sports betting since the ruling, and Pennsylvania and Rhode Island are expected to be among the next wave of states to open sportsbooks.

So why are they having this hearing?

The major professional sports leagues and the NCAA support a uniform federal framework to guide states interested in offering sports betting. The House Judiciary Subcommittee on Crime, Terrorism, Homeland Security and Investigations will listen to testimony and consider whether federal intervention is warranted. It is not known whether the hearing will be followed by new sports betting legislation.

Who is testifying?

The witness list includes:

• NFL executive vice president of communications and public affairs Jocelyn Moore.
• Professor John Warren Kindt, University of Illinois.
• American Gaming Association senior vice president of public affairs Sara Slane.
• Stop Predatory Gambling national director Les Bernal.
• Nevada Gaming Control Board chairwoman Becky Harris.

What do the sports leagues want?

While only the NFL will be represented at the hearing, each of the major professional leagues and the NCAA are somewhat on the same page in believing that a federal framework is needed.

Major League Baseball, the NBA and PGA Tour, which have teamed up on a state-level lobbying campaign, released a joint statement in late August, supporting the suggested federal sports betting guidelines introduced by Senate Minority Leader Chuck Schumer, D-N.Y. The NFL and NCAA also released a statement applauding Schumer and Sen. Orrin Hatch, R-Utah, who also is pursuing federal action.

Schumer's guidelines mirrored the leagues' requests in many ways:

• Sportsbook operators should be required to use official league data to settle bets.

• Sports leagues should have input on what types of bets are offered.

• All parties -- the sportsbooks, leagues and regulators -- should share information and report suspicious activity like unusual betting patterns.

What about the 'integrity fees?'

The term "integrity fee" first appeared in January in an Indiana sports betting bill, backed by Major League Baseball and the NBA. The original fee was 1 percent of the amount wagered on their respective sports that would be paid by bookmakers to the leagues. After blowback from the gaming industry, the leagues have reduced their request to as low as 0.20 percent in New York, and now regularly refer to the fee as a royalty. No state that has passed sports betting legislation has included any fee based on the money wagered to this point, but MLB and the NBA are still pursuing the issue in their state-level lobbying efforts.

What do the bookmakers want?

They certainly don't want anything to do with any "integrity fees" and often point to the slim margins Nevada sportsbooks operate at as reason why. Nevada sportsbooks have had a net win of around 5.52 percent of the amount bet since 1984, according to UNLV's Center for Gaming Research.

The casino industry, represented by the American Gaming Association, believes sports betting should remain a state issue and opposes legislated fees and requirements, in favor of commercial deals between leagues and sportsbook operators, similar to the NBA's recent partnership with MGM.

"The casino industry is working with stakeholders to ensure the proper protections for consumers, and the integrity of bets and sporting contests are included in state policy, universally implemented by all operators in those states, and overseen by effective state and tribal gaming regulators," Slane said in a statement responding to Schumer's announcement.

Is federal legislation coming?

Hatch, the conservative Utah senator, said in late August that he was working on a new sports betting bill and that legislation would be coming "in weeks," but nothing has surfaced. No other federal bills are believed to be active. It's wait and see, for now.