Last week’s FBI arrests related to an illegal NBA gambling ring have reignited discussions about the need for stricter federal oversight and a potential ban on prop bets across the United States. However, despite this fresh momentum, Congress has left major sports betting proposals stagnant in committees for months, a familiar story since the Supreme Court’s 2018 decision to overturn the Professional and Amateur Sports Protection Act (PASPA).
The recent scandal has led to renewed calls for federal intervention, with some lawmakers pressing for NBA Commissioner Adam Silver to provide additional insights. Yet, sports betting topics have largely faded from Congress’s agenda since PASPA’s fall. State legislators, on their part, have been reticent to modify the sports betting landscape substantially once legalized, often preferring to leave adjustments to regulatory bodies.
Since PASPA’s reversal, the industry has mostly escaped significant federal attention, save for a Congressional hearing in December. Senator Dick Durbin, chair of the Senate Committee on the Judiciary, where the hearing took place, asserted that it wouldn’t be the last discussion on the matter. However, the hearing deviated from its primary topics, and no further meetings have been scheduled since.
State lawmakers have shown a tendency to let the industry self-regulate after legalization. Seven years post-PASPA, 39 states now have some form of legal sports betting. Despite the overall hands-off approach, some states have attempted to exert more control. A notable example is Maryland’s proposed legislation earlier this year to repeal online sports betting entirely, although it never progressed to a committee hearing. Similarly, a Vermont legislator’s bill met the same fate.
In contrast, states like Connecticut have attempted to refine their sports betting laws, proposing measures such as setting a maximum hold for sportsbooks and allowing consumers to opt out of certain wagers. Despite these efforts, many such bills did not advance.
Where state legislatures have taken action, it often stems from fiscal motivations. Several states, including Illinois, have increased sports betting taxes post-market launch. Illinois adjusted its tax structure from a flat 15% to a tiered system ranging from 20% to 40% based on revenue, while also introducing per-bet fees. Ohio, Louisiana, and Maryland have implemented similar tax hikes.
State regulators, rather than legislators, have been more proactive in shaping the sports betting industry. Agencies like the Massachusetts Gaming Commission and Ohio Casino Control Commission have become pivotal in monitoring and enforcing industry standards, especially regarding advertising and prop bets. New York and Illinois, for instance, have recently tightened advertising rules.
When it comes to prop bets, regulators have also made significant strides, particularly concerning college sports. In recent years, the Ohio Casino Control Commission, Maryland Lottery and Gaming, and Louisiana Gaming Control Board have revised their rules to prohibit this bet type in NCAA games.
At the federal level, the most comprehensive proposal is the Supporting Affordability and Fairness with Every Bet Act (SAFE Bet Act), introduced by Senator Richard Blumenthal and Representative Paul Tonko. Despite its introduction in the past two sessions, the bills remain unexamined in their respective committees. This legislation aims to create a national framework for gambling advertisements, restricts collegiate player prop bets and in-play betting, and limits artificial intelligence in targeting bettors.
Tonko, upon reintroducing the bill, emphasized that the goal was not to stymie the industry’s record-breaking revenue nor to prevent Americans from wagering but to address the overlooked impact of gambling-related harms. This sentiment echoes the broader concern over public health risks associated with gambling.
The proposal also mandates states to collaborate with federal entities in combating illegal gambling operations. State regulators have already issued numerous cease-and-desist orders to illicit operators, seeking federal cooperation to bolster their efforts.
Prop bets have emerged as a focal point following the NBA gambling arrests, with NCAA President Charlie Baker among the most vocal advocates for a nationwide ban on collegiate prop bets. Representative Michael Baumgartner proposed a ban on college prop bets in February, gaining some traction. However, states like North Carolina and New Jersey have seen limited progress on similar bills.
Baumgartner remarked to the Washington Post that prop bets opened the door to illegal activities potentially compromising the integrity of games. Nonetheless, the scandal also highlighted the effectiveness of regulated sportsbooks and integrity monitors in identifying suspicious betting activity, showcasing the benefits of a legal market.
Other federal initiatives on gambling remain stalled as well. Tonko’s 2023 Betting on Our Future Act, which sought to treat sports betting advertisements like tobacco ads, failed to move forward. Blumenthal has been advocating for colleges to cease sports betting partnerships since 2022 and also co-sponsors the Gambling Addiction Recovery, Investment and Treatment Act (GRIT Act). This act aims to allocate the existing 0.25% federal excise tax on sports bets towards problem gambling treatment and research. Despite being introduced in 2024, it has yet to see significant legislative movement.
Rep Dina Titus from Nevada has consistently pushed to repeal the federal excise tax, arguing it unfairly advantages offshore and illegal operators. Since 2018, sportsbook operators have paid over $500 million in excise taxes, a figure some lawmakers see as counterproductive to fostering a competitive and legal betting environment in the U.S.
This ongoing debate highlights the complex interplay between state and federal responsibilities in regulating the rapidly expanding sports betting industry. While the current landscape shows a preference for state-level regulatory action, the push for federal oversight remains a contentious issue, reflecting broader concerns about economic interests, public health, and the integrity of sports.
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