Sports Wagering Market Integrity Act of 2018
A BILL
To acknowledge the rights of States with respect to sports wagering and to maintain a distinct Federal interest in the integrity and character of professional and amateur sporting contests, and for other purposes.
Sec. 2 Findings
Congress makes the following findings:
In 1992, Congress enacted the Professional and Amateur Sports Protection Act (Public Law 102–559; 106 Stat. 4227) to ban sports wagering in most States, finding that “sports gambling conducted pursuant to State law threatens the integrity and character of, and public confidence in, professional and amateur sports, instills inappropriate values in the Nation’s youth, misappropriates the goodwill and popularity of professional and amateur sports organizations, and dilutes and tarnishes the service marks of such organizations.”.
On May 14, 2018, the Supreme Court of the United States held in Murphy v. NCAA, 138 S. Ct. 1461 (2018), that the prohibition of State authorization and licensing of sports wagering schemes under the Professional and Amateur Sports Protection Act (Public Law 102–559; 106 Stat. 4227) violates the 10th Amendment to the Constitution of the United States.
After the decision in Murphy v. NCAA, 138 S. Ct. 1461 (2018), any State may legalize and regulate sports wagering, as determined by the State, consistent with section 1084 of title 18, United States Code (commonly known as the “Wire Act”), section 1955 of that title (commonly known as the “Illegal Gambling Business Act”), subchapter IV of title 31, United States Code (commonly known as the “Unlawful Internet Gambling Enforcement Act of 2006”), and other Federal law.
Since the decision in Murphy v. NCAA, 138 S. Ct. 1461 (2018), the States of Delaware, Mississippi, New Jersey, New Mexico, Pennsylvania, Rhode Island, and West Virginia have joined the State of Nevada in accepting sports wagers, and more than 2 dozen other States are considering legislation to legalize sports wagering.
Even before the decision in Murphy v. NCAA, 138 S. Ct. 1461 (2018), there was a significant legal sports wagering market in the United States, with $4,870,000,000 wagered on sports in the State of Nevada in 2017. The legal sports wagering market will continue to grow as legal sports wagering becomes more widely available.
Overshadowing the legal sports wagering market is a much larger illegal sports wagering market that circumvents the taxation, anti-money laundering controls, and other regulations of the legal sports wagering market. The American Gaming Association estimates that people of the United States illegally bet over $150,000,000,000 annually on United States sporting events.
The estimated size of the illegal sports wagering market suggests that the laws and enforcement efforts that for decades have sought to curtail illegal sports wagering have come up short.
The expansion of legal sports wagering after the decision in Murphy v. NCAA, 138 S. Ct. 1461 (2018), presents an opportunity to significantly reduce the illegal sports wagering market by pairing enhanced authority for law enforcement to shut down the illegal sports wagering market with policies that incentivize participants in the illegal sports wagering market to shift their activity into the legal sports wagering market, as available, so that such activity can be appropriately regulated and taxed.
All forms of gaming have historically been regulated predominantly at the State level, but sports wagering, which often involves individuals across numerous States placing sports wagers on a sporting event that takes place in yet another State, affects interstate commerce more than other forms of gaming that are generally contained within the walls of a gaming establishment.
While each State may decide whether to permit sports wagering and how to regulate sports wagering, there is an important role for Congress to set standards for sports wagering and provide law enforcement with additional authority to target the illegal sports wagering market and bad actors in the growing legal sports wagering market.
Sec. 3 Definitions
In this Act:
Amateur athletic competition— The term amateur athletic competition has the meaning given the term in section 220501 of title 36, United States Code.
Anonymized sports wagering data— With respect to a sports wager accepted by a sports wagering operator, the term anonymized sports wagering data means—
a unique identifier for the transaction and, if available, the individual who placed the sports wager, except that such identifier shall not include any personally identifiable information of such individual;
the amount and type of sports wager;
the date and time at which the sports wager was accepted;
the location at which the sports wager was placed, including the internet protocol address, if applicable; and
the outcome of the sports wager.
Gambling disorder— The term gambling disorder means—
gambling disorder, as the term is used by the American Psychiatric Association in the publication entitled “Diagnostic and Statistical Manual of Mental Disorders, 5th Edition” (or a successor edition);
pathological gambling;
gambling addiction; and
compulsive gambling.
Governmental entity— The term governmental entity means—
a State;
a political subdivision of a State; and
an entity or organization, including an Indian Tribe, that has governmental authority within the territorial boundaries of the United States, including Indian lands (as defined in section 4 of the Indian Gaming Regulatory Act (25 U.S.C. 2703)).
Indian Tribe— The term Indian Tribe has the meaning given the term “Indian tribe” in section 4 of the Indian Gaming Regulatory Act (25 U.S.C. 2703).
Interactive sports wagering platform— The term interactive sports wagering platform means a person or entity that offers licensed sports wagering over the internet, including through an internet website and mobile devices, on behalf of a licensed gaming facility.
International regulatory entity— The term international regulatory entity means any entity responsible for the regulation of sports wagering outside the United States.
International sports wagering operator—
In general— Except as provided in subparagraph (B), the term international sports wagering operator means any person that—
accepts sports wagers; and
is located outside the United States.
Exception— The term international sports wagering operator does not include a sports wagering operator.
Interstate sports wagering compact— The term interstate sports wagering compact means a compact to offer sports wagering in accordance with this Act between—
2 or more States with a State sports wagering program;
1 or more States with a State sports wagering program and 1 or more Indian Tribes; or
2 or more Indian Tribes.
Licensed gaming facility— The term licensed gaming facility means a person licensed by a State regulatory entity or an Indian Tribe licensed by a State regulatory agency.
National exclusion list— The term national exclusion list means the list maintained by the National Sports Wagering Clearinghouse, in cooperation with State regulatory entities and sports organizations, under section 106(c)(13).
National self-exclusion list— The term national self-exclusion list means the list maintained and administered by the National Sports Wagering Clearinghouse, in cooperation with State regulatory entities, under sections 103(b)(6)(A)(ii) and 106(c)(12).
National Sports Wagering Clearinghouse— The term National Sports Wagering Clearinghouse means the entity designated by the Attorney General under section 106(b).
Official— The term official means a referee, umpire, judge, reviewer, or any other individual authorized to administer the rules of a sporting event.
Sporting event— The term sporting event means any athletic competition.
Sports organization— The term sports organization means—
a person or governmental entity that—
sponsors, organizes, schedules, or conducts a sporting event; and
with respect to the sporting event and the participants in the sporting event—
prescribes final rules; and
enforces a code of conduct; and
a league or association of 1 or more persons or governmental entities described in subparagraph (A).
Sports wager—
In general— Except as provided in subparagraph (C), the term sports wager means the staking or risking by any person of something of value upon the outcome of a sporting event, including the outcome of any portion or aspect thereof, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome.
Inclusion— With respect to an amateur or professional sporting event, the term sports wager includes—
a straight bet;
a teaser;
a variation of a teaser;
a parlay;
a total or over-under;
a moneyline;
a betting pool;
exchange wagering;
in-game wagering, including in-game wagering on—
a final or interim game score;
statistics; or
a discrete in-game event;
a sports lottery; and
a proposition bet.
Exceptions— The term sports wager does not include—
any activity excluded from the definition of the term bet or wager under section 5362 of title 31, United States Code; or
any activity that does not violate a provision of the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.).
Sports wagering— The term sports wagering means the acceptance of a sports wager by a sports wagering operator.
Sports wagering operator— The term sports wagering operator means—
a licensed gaming facility that offers sports wagering; and
an interactive sports wagering platform.
Sports wagering opt-in State— The term sports wagering opt-in State means a State that administers a State sports wagering program.
State— The term State means—
a State;
the District of Columbia; and
any commonwealth, territory, or possession of the United States.
State regulatory entity— The term State regulatory entity means the governmental entity—
established or designated by a sports wagering opt-in State under section 102(a)(2)(A)(ii); and
responsible, solely or in coordination with 1 or more other governmental entities, for the regulation of sports wagering in the applicable sports wagering opt-in State.
State social gambling law— The term State social gambling law means a State law that allows sports wagering that—
is not conducted as a business;
involves 2 or more players who compete on equal terms; and
does not provide a benefit to—
a player, other than the winnings of the player; or
a person who is not involved in a sports wager.
State sports wagering program— The term State sports wagering program means a program administered and overseen by a State pursuant to an application approved by the Attorney General under subsection (b) or (e) of section 102.
Suspicious transaction— The term suspicious transaction means a transaction or an arrangement that a sports wagering operator or the National Sports Wagering Clearinghouse, as applicable, knows or has reason to know, as determined by a director, officer, employee, or agent of the sports wagering operator or National Sports Wagering Clearinghouse, is or would be if completed—
a violation of, or part of a plan to violate or evade, any Federal, State, or local law (including regulations); or
sports wagering by or on behalf of an individual described in clause (iii), (iv), or (v) of section 103(b)(4)(A).
Suspicious transaction report— The term suspicious transaction report means a report submitted to a State regulatory entity, the National Sports Wagering Clearinghouse, or a sports organization under section 103(b)(13).
Tribal-State compact— The term Tribal-State compact has the meaning given the term in section 11(d) of the Indian Gaming Regulatory Act (25 U.S.C. 2710(d)).