Jon Kyl’s Return To The Senate Has Many Gambling Enthusiasts On Alert
Recently, Jon Kyl was tapped to fill the seat of late Senator John McCain. Online gambling and sports betting enthusiasts are probably less than thrilled with the choice.
Kyl not a friend of online gambling
Kyl was the junior senator from Arizona from 1995 to 2013. During his initial tenure, he championed legislation that targeted online gambling operations.
The Unlawful Internet Gambling Enforcement Act (UIGEA) didn’t make gambling illegal. Instead, it focused on the processing of payments and passed the issue of legalized and regulated online gaming to the states.
Kyl, with support from the major sports leagues and the NCAA, was successful in passing the legislation in 2006. The UIGEA and the subsequent prosecution of online gambling sites brought the industry to a standstill.
The UIGEA included language that unintentionally exempted daily fantasy sports sites from the UIEGA. Hence, the rise of popular DFS sites, DraftKings and FanDuel.
Kyl thought internet gambling “would be a very difficult kind of activity to regulate because we don’t have jurisdiction over the people abroad who are doing it.” His remedy was “to simply pull the plug at the point of entry into the United States.”
To be fair, the UIGEA set the stage for regulated online gaming in such states as Nevada, Delaware, and New Jersey. Pennsylvania is set to join the trio soon.
And since the overturning of PASPA, sports betting is taking the Eastern US by storm. Joining Nevada in the sports betting market are New Jersey, Delaware, Mississippi, and West Virginia.
Kyl’s appointment may impact sports betting
When the Supreme Court overturned PASPA, Justice Samuel Alito made it clear that the federal government could regulate sports betting. If it chooses not to, however, then regulation is left to the states.
Once several states started discussing regulating sports betting, the major sports leagues set out to get a piece of the profit pie through integrity fees. The leagues quickly realized collecting integrity fees was unlikely to happen. That is when they switched their tune and began touting the benefits of federal legislation.
Two senators have gone on record in support of such legislation: Orrin Hatch and Chuck Schumer. Knowing Kyl’s history in supporting online gaming regulation, it would not surprise anyone to see Kyl join the duo.
McCain’s term ends in 2023. According to the Senate website, Kyl is set to serve through the end of the term. However, it is possible that a special election for McCain’s seat will happen in 2020.
The leagues most likely support Kyl’s appointment because there is a direct connection to the Senator. After Kyl left the Senate, he went into private practice and was an advisor to Covington & Burling. The law firm represents several top sports leagues and has tackled such issues as sports data for clients like the NFL.
Federal sports betting legislation won’t happen soon
It is unlikely there will be any significant movement on national sports betting legislation in the near future, if at all. There is a contentious mid-term election ahead where both Republicans and Democrats are busy fighting for every seat.
Congress has not been capable of late in passing major legislation that supports the President’s agenda. It seems far-reaching that a federal sports betting law is the sword the Republican-controlled Legislature wants to bet on.
For now, the sports leagues will have to settle for the increase in revenue projected from sports betting activity. For instance, the American Gaming Institue recently released a report that estimates the NFL will grow by $2.3 billion thanks to legalized sports betting.
Photo by Christopher Halloran / Shutterstock.com
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