Bills to Regulate Sports Betting Introduced in Senate and House

Updated October 1, 2024. Originally posted September 19, 2024.

Last month, far-reaching proposals to regulate sports betting were introduced in the U.S. Senate and the House of Representatives by Senator Richard Blumenthal and Representative Paul Tonko which mark "the first comprehensive legislation that would address the public health implications inherent in the widespread legalization of sports betting." The bills, called the Supporting Affordability and Fairness with Every Bet (SAFE Bet) Act, would establish a broad federal scheme imposed on State gambling authorities to limit sports betting advertising, address problem gambling, and focus on other "public safety" measures.

The SAFE Bet Act would establish a general nationwide prohibition on sports betting with an exception for States that receive approval from the Department of Justice (DOJ) to operate a sports betting program consistent with the requirements of the proposed legislation. DOJ approval of a State's application would be valid for three years and would be renewable. To receive approval, a State would have to show that it meets minimum federal standards related to sports betting advertising, controls on customer deposits, general consumer-protection requirements, and the use of artificial intelligence (AI) by sports betting operators. The following is a high-level summary of the key standards.

Advertising Limits. The bills' advertising standards include prohibitions on broadcast advertising between 8 AM and 10 PM (local time) and during live sports events. Also, advertisements could not utilize common promotional mechanisms such as "bonus," "no sweat," or similar offers. Advertisements also could not instruct the audience how to gamble or explain how wagers work.

Financial Limitations and Consumer Protection. The financial limitations, which the summary suggests are designed to address "affordability" concerns, would prohibit operators from accepting more than five deposits from a customer in a 24-hour period and would ban deposits via credit card. Sports betting operators also would be required to conduct "affordability checks" on customers before accepting wagers above certain thresholds by verifying that a customer's proposed deposits would not exceed more than 30% of the customer's monthly income. In addition, before accepting a wager, operators would be required to check a National Self-Exclusion List, which the federal Substance Abuse and Mental Health Services Administration (SAMHSA) would create based on data from State sports gambling regulators.

AI Standards. The bills' AI standards would prohibit the use of AI to track individual customers' gambling habits. Operators would not be able to use AI to create individualized offers and promotions for customers, either. The use of AI to create gambling products (e.g., microbets) would be prohibited, as well.

State Regulatory Entities. The bills would require States to establish or designate a public entity as the "State Regulatory Entity." This entity would regulate sports wagering operators and enforce the State's sports wagering laws.

Notably, the bills also would bar outright all proposition ("prop") bets featuring college and amateur athletes.

Separately, the bills would authorize SAMHSA to conduct a "National Sports Betting Survey" to examine use rates and outcomes of sports betting and would require a report from the Surgeon General on the public health impacts from sports betting. The bills also would clarify that States are not preempted from enacting stronger standards than the minimum federal standards it would impose. The bills provide for a maximum civil penalty of $10,000 or three times the applicable sports wager per violation. Additionally, the Attorney General would be able to revoke approvals before the end of the three-year term upon finding that a State's program does not meet the required standards.

The bills were referred to the Senate Judiciary Committee and the House Energy and Commerce Committee and Natural Resources Committee. It is unclear whether any legislative hearings will be held in the few remaining days of the 118^th Congress.