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 118th Congress.

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Photo of Gerard J. Waldron Gerard J. Waldron

Gerry Waldron represents communications, media, and technology clients before the Federal Communications Commission and Congress, and in commercial transactions. Gerry served as chair of the firm’s Communications and Media Practice Group from 1998 to 2008. Prior to joining Covington, Gerry served as the…

Gerry Waldron represents communications, media, and technology clients before the Federal Communications Commission and Congress, and in commercial transactions. Gerry served as chair of the firm’s Communications and Media Practice Group from 1998 to 2008. Prior to joining Covington, Gerry served as the senior counsel on the House Subcommittee on Telecommunications. During his work for Congress, he was deeply involved in the drafting of the 1993 Spectrum Auction legislation, the 1992 Cable Act, the Telephone Consumer Protection Act (TCPA), CALEA, and key provisions that became part of the 1996 Telecommunications Act.

Gerry’s practice includes working closely on strategic and regulatory issues with leading IT companies, high-quality content providers in the broadcasting and sports industries, telephone and cable companies on FCC proceedings, spectrum entrepreneurs, purchasers of telecommunications services, and companies across an array of industries facing privacy, TCPA and online content, gaming, and online gambling and sports betting-related issues.

Gerry has testified on communications and Internet issues before the FCC, U.S. House of Representatives Energy & Commerce Committee, the House Judiciary Committee, the Maryland Public Utility Commission, and the Nevada Gaming Commission.

Photo of Corey Walker Corey Walker

Corey Walker advises clients on a broad range of regulatory, compliance, and enforcement matters in the media, technology, satellite and space, and telecommunications sectors. Corey also provides strategic counsel to leading media, sports, and technology companies on gaming matters, with a focus on…

Corey Walker advises clients on a broad range of regulatory, compliance, and enforcement matters in the media, technology, satellite and space, and telecommunications sectors. Corey also provides strategic counsel to leading media, sports, and technology companies on gaming matters, with a focus on sports betting, fantasy sports, and online gaming.

Corey represents clients before the Federal Communications Commission in connection with a range of policy and compliance issues, including satellite and earth station operations, radiofrequency (RF) spectrum use and availability, and experimental licensing for new and innovative technologies. He also advises clients on structuring transactions and securing regulatory approvals at the federal, state, and local levels for mergers, asset acquisitions, and similar transactions involving FCC and state telecommunications licensees and companies holding private remote sensing space system licenses issued by the National Oceanic and Atmospheric Administration.

Corey also maintains an active gaming and sports betting practice, and routinely counsels companies on state licensing and compliance matters, including those that pertain to fantasy sports and online gaming.

Photo of Conor Kane Conor Kane

Conor Kane advises clients on a broad range of privacy, artificial intelligence, telecommunications, and emerging technology matters. He assists clients with complying with state privacy laws, developing AI governance structures, and engaging with the Federal Communications Commission.

Before joining Covington, Conor worked in…

Conor Kane advises clients on a broad range of privacy, artificial intelligence, telecommunications, and emerging technology matters. He assists clients with complying with state privacy laws, developing AI governance structures, and engaging with the Federal Communications Commission.

Before joining Covington, Conor worked in digital advertising helping teams develop large consumer data collection and analytics platforms. He uses this experience to advise clients on matters related to digital advertising and advertising technology.