Proposed Sports Betting Bills In Connecticut And Kansas Enable Sports Leagues To Sue In Event Of Cheating

Proposed Sports Betting Bills In Connecticut And Kansas Enable Sports Leagues To Sue In Event Of CheatingThough the prospective sports betting bills on the table in the states of Connecticut and Kansas take several stabs at reducing the leverage of the pro sports leagues in some areas, they give plenty of powers to the leagues in return.

For instance, these two states (among a few others of the nearly two dozen states looking to pass or having already passed sports betting legislation) proposed bills which diverged from the so called “blueprint” for sports betting regulatory legislation approved by the NBA and Major League Baseball, particularly in regard to the leagues’ desired “integrity fees.” However, whatever reductions to those usurious royalties the leagues have requested may be contained in these bills, the leagues nevertheless retain some fairly far reaching authority according to the language of the proposed pieces of legislation. One of the centerpieces of the remaining concessions to the leagues present both in Connecticut’s Senate Bill 540 (S 540) and Kansas’ Senate Bill 455 (SB 455) is the power reserved to the professional sports leagues to pursue legal action against individuals thought to be guilty of involvement in cheating.

This language is eerily similar to provisions of the much maligned Professional and Amateur Sports Protection Act of 1992 (PASPA), which also enabled the professional sports leagues that were so in favor of the law to initiate suits against separate from any criminal cases the states or the federal government might bring. That feature of PASPA, which is the subject of a case brought before the U.S. Supreme Court by the state of New Jersey, was apparent bad enough that the US Department of Justice issued an opinion that the power vested in the sports leagues to pursue private suits against cheaters was “particularly troubling.” At any rate, if the SCOTUS justices return a verdict in favor of New Jersey in the Murphy v. NCAA case then PASPA will be declared unconstitutional for violating the rights of the 46 states not allowed to regulate sports betting and will accordingly be stricken from the legal rolls.

If PASPA gets pulled down, whether on the basis of a Supreme Court decision or by a Congressional repeal (that is the backup plan in case New Jersey does not succeed in the former), then states like Connecticut and Kansas would presumably be free to pass whatever sports gambling regulatory laws their legislators wish. That being said, it appears that – by virtue of each of those states’ decision to leave in a provision for the sports leagues they’re attempting to curry favor with – that allowing the leagues to have that kind of punitive power is something the states can live with. This illustrates just what is and isn’t acceptable for state lawmakers when it comes to crafting their own sports betting legislation as part of a compromise with the leagues, easily the best funded and most powerful of the interest groups concerned in the national sports wagering conversation.

As for Connecticut’s S 540, which was first introduced toward the end of March and was featured in a public hearing in the General Assembly on April 2, the bill gives the leagues’ legal arms plenty of leeway as to how and where and for what they can take a presumed cheater to court. According to the language of the proposed bill, any individual or entity that violates the regulations established by the Connecticut Lottery Corporation regarding sports betting “shall be liable to the relevant sports governing body.” The leagues accordingly can sue cheaters – and that means anyone involved in any activity “intended to influence a betting outcome of a sporting event for purposes of financial gain” - “at law or in equity” in any court of their choosing, providing it is of “competent jurisdiction.”

Kansas’ SB 544 is a lot more of the same where that came from. SB 544 says the sports governing bodies have cause to sue “any person who knowingly engages in, facilitates or conceals conduct” intended to influence the outcome of a wager on a sporting event for the purpose of financial or monetary gain. Just like in the case of the aforementioned Connecticut proposal, the prospective Kansas sports betting bill enables the pro sports leagues to sue cheaters for either recompense in the form of money damages or other “equitable remedies” – namely an injunction. The leagues also aren’t limited in pursuing any other types of claims for damages or “injuries” resulting from the state’s operation of sports wagering.

Even though these proposals are already officially noted and have been entered into the record in their respective states, it is worth pointing out that such provisions are nothing new in spirit, though they may differ in their material application. To wit, the Sports Bribery Act of 1964, a federal law, establishes punishments of a sizeable fine and a prison sentence of not more than five years (or both) for individuals that attempt, carry out or conspire to “put into effect any scheme in commerce” to influence a sporting event by way of a bribe. This particular law have been used to punish cheaters in various sports since the ‘60s and for good reason: it covers all the bases that a sports league would need to worry about in terms of bad actors trying to fix the outcome of a game via point shaving or some other method.

Further muddying the waters of the whole situation is the fact that both states already have laws on the books that are designed to combat cheating in sports wagering situations. In Kansas, State Statute 21-6507 makes it illegal to “confer, or offering or agreeing to confer” any kind of benefit to a participant or official in a sporting event for the purpose of getting that player not to give their best efforts in a contest, and guilty parties can face felony charges. It’s pretty much the same story in Connecticut, where attempting to fix a sporting event – that is, trying to prevent a “publically exhibited sporting event” from being conducted in accordance with the rules - is a felony offense.

So what gives - why did the state legislators of Kansas and Connecticut decide to run with proposed sports legalization bills that do practically the same thing? The answer, of course, is that the proposed bills in question give the power to the individual sports leagues themselves the same authority that was once the province of federal prosecutors only. It’s clear that these provisions in the Kansas and Connecticut regulatory bills are carrots being dangled to entice the sports leagues to get on board with a program that focuses more on the state’s need for funding than on the league’s desire to extract rents and royalties for “use” of their product by sportsbook operators.

At any rate, the last time anybody at the federal level raised proverbial eyebrow in a similar situation was when PASPA, which enjoyed the overwhelming support of the NBA, MLB, NFL and NHL as well as the NCAA, gave the leagues the ability to enforce its provisions separate from any government authority to do the same. Whether or not PASPA will be struck down by the Supreme Court or repealed by the Congress is a different matter, but it is probably not a wise move on the part of the states to repeat some of the mistakes of that much maligned law just to get the support of the leagues. No matter if PASPA remains the law of the land, if these individual state bills we’ve been discussing pass or don’t pass – none of that matters as far as the leagues’ bottom lines, as fans will still line up by the droves to bet on sports in sports betting states.