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Presentation Recap: Jackpot! How D.C. Can Successfully Introduce Legalized Sports Betting and Navigate the Changing Regulatory Landscape
On January 9th, the DC Bar Association hosted a presentation by Ifrah Law entitled Jackpot! How D.C. Can Successfully Introduce Legalized Sports Betting and Navigate the Regulatory Landscape. For an hour and forty-five minutes a four-person panel discussed the District of Columbia’s legalization and regulation of sports betting in the wake of Murphy v. Nat’l Collegiate Athletic Ass’n. Ifrah Law’s Founding Member and online-gaming expert Jeff Ifrah moderated the panel of experts, which included Joe Asher, the CEO of sports-book operator William Hill US; Ridgely Bennett, Chief Counsel for the D.C. Office of Lottery and Gaming; and Keith Whyte, Executive Director of the National Council on Problem Gambling in Washington, DC.
Following Mr. Ifrah’s opening introduction, the panelists recounted events leading up to the Supreme Court’s 2018 decision in Murphy, which struck down a federal statute from the early 1990s called the Professional and Amateur Sports Protection Act (PASPA). As Mr. Asher explained, PASPA effectively prohibited state-sponsored sports betting everywhere in the U.S. except Nevada. In 2011, stakeholders and politicians in New Jersey began advocating for sports betting as an antidote to New Jersey’s lagging horseracing and casino industries. In 2014, New Jersey repealed state prohibitions on gambling, which effectively made sports gambling legal in certain places. The major sports leagues sued on grounds that New Jersey had acted in violation of PASPA. Despite a series of bruising losses in the lower courts, then-Governor Chris Christie took the fight all the way to the Supreme Court, where he ultimately prevailed.
According to the panelists, the Murphy decision helped to accelerate a shift in favor of sports betting that had already begun before Murphy was decided. Prior to Murphy, sports commissioners were almost unanimously opposed to sports betting due to concerns that it would threaten the integrity of sports contests and jeopardize the well-being of student athletes. But NBA Commissioner Adam Silver brought a new perspective. Having spent a lot of time in Europe, he saw that legalized gambling seemed to work in the United Kingdom. He also understood that a blanket prohibition on sports betting in the U.S. simply drove avid bettors to offshore operators. Asher credits Silver with helping to shift public opinion on sports betting, which had already softened due to America’s love for sports and the increased prevalence of fantasy sports.
For his part, Ridgely Bennett recounted the DC Government’s swift response in the wake of Murphy. Bennett explained that, within one year of the Supreme Court’s decision in May 2018, DC’s Sports Wagering Act of 2018 became law. The implementing regulations took effect just four months later in late-August 2019. Bennett predicts that DC’s sports betting market will be active sometime in March 2020.
Notably, Bennett described DC’s unique operational model in contrast to the privately-owned tax model found in states like New Jersey, Nevada, and Pennsylvania, and the government-operated model found in states like Delaware and Rhode Island. Private business and government will act in parallel under DC’s hybrid model. Major sports venues will be licensed as Class A Operators, whereas non-gaming businesses (e.g., bars and restaurants) that provide sports betting will be licensed as Class B Operators. Class A licensees will be able to operate in their respective venues and within an exclusion zone that covers a two-block radius around the operator’s venue. By contrast, Class B licensees will be allowed to operate only within their establishments. The DC Lottery will supplement private operators by offering sports betting products through licensed lottery retailers and a city-wide mobile app.
Keith Whyte addressed issues related to problem gambling. First, he noted that roughly 15,000 DC residents suffer from a gambling disorder. Most are young adult males of a lower socioeconomic status who are members of a racial or ethnic minority group and have a history of substance use and military service. Notwithstanding these numbers, the DC Government offers no formal programs or service to residents who suffer from a gambling addiction. Fortunately, DC’s new sports betting law provides much-needed funding for gambling-related prevention and treatment programs. Whyte commented further that sports betting is different from other types of gambling: while participation in other types of gambling tends to decline with increases in education and income, participation in sports betting increases dramatically with education and income. According to Whyte, a recent survey of 28,000 individuals suggests that college graduates are twice as likely to engage in sports betting as compared to those with a high-school education or less. These data indicate that different outreach strategies may be needed to reach problem gamblers involved with sports betting. Early summaries of the survey data are available at https://www.ncpgsurvey.org/.
Roughly eighty-five registrants attended the event, including seventy-nine who attended in person and six by webinar. Many of the attendees gathered beforehand for cocktails and hors d’oeuvres compliments of co-sponsors Ifrah Law and the Arts, Entertainment, Media and Sports Law Community of the DC Bar.