Recent NBA-related gambling scandals have led to the arrest of several individuals by the FBI, reigniting discussions on sports betting regulation in American society. Despite calls from lawmakers to strengthen federal legislation, history shows that related bills rarely pass. Since the Supreme Court overturned the Professional and Amateur Sports Protection Act in 2018, Congress has only held a few hearings, with the main reform momentum coming from state regulatory agencies. Currently, 39 states have legalized sports betting, with state regulatory bodies being more active in rule adjustments, advertising restrictions, and prop bet management, while several federal proposals remain stalled at the committee stage.
Background and Reform Initiatives
The FBI recently arrested individuals related to illegal NBA gambling rings, sparking a new round of calls for strengthened sports betting regulation. Some lawmakers have requested that NBA Commissioner Adam Silver testify and are pushing for federal legislation. The most comprehensive federal proposal, the "Affordability and Fairness in All Bets Act," has been submitted to the Judiciary Committee and the Energy and Commerce Committee, but has not yet entered the deliberation process. This proposal advocates for a national advertising framework, prohibits prop betting on college sports, and restricts AI-assisted betting.
Federal Legislation Stagnation
Seven years after the Professional and Amateur Sports Protection Act was invalidated, Congress only held one sports betting hearing in December 2023, and no substantial legislative action has been taken. Several proposals, such as the "Betting on the Future Act" and the "Gambling Addiction Recovery, Investment, and Treatment Act," have been long stalled. Reasons for legislative stagnation include established state regulatory systems, industry lobbying resistance, and congressional priority sorting. Even though some lawmakers argue that federal regulation is crucial for reducing public health risks, political consensus is hard to form.
State Regulatory Practices and Outcomes
State regulatory agencies have become the actual reform drivers, with most of the 39 legalized states adjusting rules through these bodies. Regulatory agencies in states like Massachusetts and Ohio closely monitor operations, while states like New York and Illinois have tightened advertising regulations, and several states prohibit NCAA match prop betting. States also increase revenue by raising tax rates, such as Illinois adjusting to a tiered tax rate of 20%-40%. State-level reforms focus more on practicality and can respond quickly to market issues.
Industry Impact and Development Trends
Scandals, especially concerning prop betting, have drawn significant attention, with the NCAA chairman advocating for a nationwide ban on college sports betting. Legal sports betting companies help expose illegal activities through betting pattern monitoring, demonstrating the transparency advantages of regulated markets. Future reforms are likely to continue to be state-led, with the federal level possibly limited to establishing a basic framework. States continue to explore best practices in balancing fiscal revenue, consumer protection, and industry development.
