Congress to Consider Lifting Ban on Sports Betting

FanDuel and DraftKings said they reached an agreement with the National Collegiate Athletic Association to end fantasy sports contests at the conclusion of this weekend's basketball tournament
Washington D.C.

With the growing popularity of fantasy sports betting websites and the corresponding questions over their legality, a congressional committee looks to reconsider the wide bans on sports betting currently causing such confusion.

Calling the current laws on the books “obsolete,” U.S. Rep. Frank Pallone Jr., D-NJ, said existing federal laws are “in desperate need of updating.”

In a statement sent to ESPN, Pallone said the Committee on Energy and Commerce would soon be looking at the laws to see how they can be updated to reflect today’s needs. “The laws need a wholesale review to see how they can actually work together and create a fairer playing field for all types of gambling, both online and offline, including sports betting and daily fantasy sports,” Pallone told the site. “At the same time, we must ensure the laws are actually creating an environment of integrity and accountability, and include strong consumer protections. I plan to continue discussions with the key stakeholders and then will introduce comprehensive legislation to finally update these outdated laws.”

As ESPN notes, “Three statutes — the Professional and Amateur Sports Protection Act of 1992 (PASPA), the Federal Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) — are the core of a patchwork of federal laws touching on sports betting. The potential new legislation would attempt to harmonize these laws.”

Bu the immense popularity of daily fantasy sports betting has made its nebulous legal status a major stumbling block for states grappling with the issue  with the result that this form of sports betting is unevenly treated from one state to the next.

Most states have begun writing laws to regulate — or in some cases ban — fantasy sports betting causing much confusion, even for private financial institutions. Recently Citigroup decided to block use of its credit services for fantasy sports due to the uncertainty over the legal status of the fantasy sports industry.

States have been all over the place on the matter, as well. The Texas attorney general, for instance, recently said fantasy sports sites run counter to Texas law. On the other hand, California leaned toward making fantasy sports betting legal. Even Nevada, a state renowned for gambling, considered a ban on fantasy sports betting.

Many states also eye fantasy sports betting as a big source of new tax revenue. But this goal is in question where it concerns conflicting federal laws on the subject.

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