A lot has changed since the Supreme Court allowed the states to make their own decisions on sports betting (see my blog post from May 2018.)
As predicted, Delaware and New Jersey raced to a photo finish with legalization on June 5th and June 11th respectively. Those states were soon followed by Mississippi, West Virginia, New Mexico and Rhode Island in 2018.
We are going to take a deeper dive into two “states” – the Commonwealth of Virginia and the District of Columbia. Through these two bills, I am going to explain why it is important to advocate if you are in the sports betting industry.
Virginia – Senate Bill 1238 (VA SB 1238)
The Chief Patron (Virginia’s term for primary sponsor) is my Senator, Chap Petersen
This bill, had it passed, would have established the Virginia Sports Betting Department to regulate sports betting. Some key provisions included: a three-year initial license with a fee of $5,000; licensees must operate only at a racetrack or off-track betting facility (i.e. no online gambling); and that localities must approve sports betting.
I think the big issue for this bill would have been the online option. In this version, companies like DraftKings and FanDuel would be ineligible to compete for licenses. The other issue is that localities must approve sports betting via referendum, which means local elections and grassroots advocacy.
The bill that ultimately killed this and the other sports betting bills – VA SB1126.
SB 1126 created a legislative study committee (the Gaming Study Commission) post-session. For the uninitiated, members of the legislature and the administration along with three “non-legislative citizens” meet to discuss the issues and draft a report due before the start of the 2020 session. There is language in the bill to keep the gaming lobby off of the study committee.
“Prior to accepting appointment, each appointee shall attest that no conflict of interest exists with respect to his service on the Commission and a potential applicant for a license or permit to conduct gaming in the Commonwealth. Nonlegislative citizen members shall be citizens of the Commonwealth.”
Study committees and work sessions are often where bills are written, and real advocacy work happens. Most state legislatures (including Virginia) are sprints, not marathons. It is important to remember that it is the work you put in before the race that determines how you finish.
Washington, D.C. – DC B23-0025 – Sports Wagering Procurement Practices Reform Exemption Act Of 2019
This bill passed the D.C. City Council on Tuesday February 19th and, pending the Mayor’s signature and Congress’ approval, makes D.C. the first jurisdiction in the DMV tri-state area to legalize sports gambling.
The bill was not without controversy, however. The final version of the bill awards a sole-source contract to Intralot, the company that runs D.C. Lottery, thus bypassing an open and transparent procurement process.
I personally know very little of Intralot, I do think the idea of betting from anywhere is exciting. Well, not from anywhere, because you have to wait for Maryland to catch up before betting live from a Washington Redskins game. I am, however, very wary of bypassing procurement processes. It has been my experience that sole-sourcing hurts startups, small businesses, taxpayers and the governments that award them. This bill bars all other companies from even bidding.
Given Virginia’s and Maryland’s failure to act during this legislative session, if I were a DC resident or company interested in the D.C. sports betting market, I would be urging the Mayor (and sadly Congress) to veto this bill and get the procurement process piece right.
About the Author – Michael O’Brien is the founder and principal of MOB Advocacy. He has more than ten years’ experience as a state and local lobbyist. Michael has lobbied governors, mayors, legislators, state and local agencies and regulators in more than 40 states.
About MOB Advocacy – MOB Advocacy is a full-service, nationally-scoped state and local government relations firm. We design and implement legislative, regulatory and procurement solutions tailored to meet any organization’s unique needs and specific goals.
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