8TH DEC 2017 | WRITTEN BY: CHRIS SIEROTY
The U.S. Supreme Court next year is expected to overturn a federal ban on sports betting and gaming regulators in Massachusetts agreed on Thursday to research how a possible state-wide sports betting industry would work.
Ed Bedrosian, executive director of the Massachusetts Gaming Commission (MGC), said that although there is a lot of interest in this case, he would take a cautious approach to educating the commission, the legislature and the governor.
“The outcome of this case could have implications for sports betting in Massachusetts,” Bedrosian told the MGC on Thursday. “There are many issues to be decided … should we legalize sports betting.”
Bedrosian told commissioners those issues include tax rates, regulatory restrictions, number of licenses, who gets the licenses, and whether to allow online sports betting or restrict it to in-person wagering at brick-and-mortar casinos.
On Monday, the Supreme Court heard oral arguments in the case of Christie v NCAA, where outgoing New Jersey Republican Governor Chris Christie is challenging the Professional and Amateur Sports Protection Act (PASPA).
PASPA restricts sports wagering to Nevada and allows partial exemptions for Delaware, Montana and Oregon. Attorneys for New Jersey claimed PASPA was unconstitutional because it violates states’ rights.
“If the Supreme Court strikes down PASPA, I would not expect Congress to act to ban sports betting altogether, given the change in attitudes since 1992, when PASPA was enacted,” said Mark Hichar, a partner with Hinckley Allen law firm based in Boston and Providence, Rhode Island.
Another issue to be considered, according to Hichar, is the federal Wire Act and its impact on online betting.
“If PASPA is struck down, the Wire Act would still function to prohibit communication of sports betting by phone or internet across state lines,” Hichar told GamblingCompliance.
The Supreme Court is expected to rule by the end of June, granting states such as Massachusetts a narrow window of time to assess their options.
Bedrosian told commissioners that MGC staff would draft a white paper on sports betting and provide the legislature with a comprehensive overview of this emerging topic.
That idea was supported by MGC chairman Stephen Crosby, who said he spoke recently with legislative staff on Beacon Hill who did not know what the case means for the state.
Crosby requested that Bedrosian’s report give commissioners “the lay of the land for each possible outcome.”
“It appears New Jersey may win, but it is very hard to tell what the Supreme Court will do,” said commissioner Lloyd Macdonald.
Macdonald suggested the high court justices could side with the NCAA or narrowly tailor their decisionto allow sports betting in New Jersey and not nationwide.
“I would underscore the word cautious as being the characterization of our approach here,” Macdonald said. “Before we spend significant resources on this I think we should wait and see what happens with the case before the court.”
Commissioner Enrique Zuniga suggested Bedrosian take a look at what other states have been doing to prepare for the possibility of legal sports betting.
“There has been a lot of activity with states passing laws to [allow for] sports betting should PASPA fall,” Zuniga said.
Crosby added that if there was a “competitive consideration we ought to get the legislature enough of a heads up that if they wanted to prepare … they’d have enough time.”
Neighboring Connecticut passed a law earlier this year mandating state officials to prepare regulations for sports betting, even though further legislation would be required to implement the regime.
Pennsylvania and Mississippi also passed legislation this year to prepare themselves for the outcome of the Supreme Court case.
Meanwhile, a 2013 casino law already allows New York’s four casino-resorts to set up sports wagering lounges as soon as the federal ban is overturned.
Consideration of the impact of the case comes as major casino-resorts are being developed by Wynn Resorts near Boston and MGM in Springfield. Penn National’s Plainridge Park Casino opened for business two years ago.
“This is important to Massachusetts casinos,” Hichar said of sports betting. “Although sportsbooks are not as profitable to casinos as slot machines, casino sportsbooks provide considerable indirect benefit.”
For example, Hichar said, “they increase casino traffic, since those visiting casino sports books are likely to attend with friends and relatives – all of whom may visit other casino gaming and non-gaming offerings.”