LEXINGTON, KY–The Association of Racing Commissioners International (ARCI) announced the official launch of the Sports Betting Regulators Association (SBRA) during the closing session of the 88and Annual Horse Safety and Fair Sport Conference.
ARCI President and CEO Ed Martin explained that the formation of SBRA had been in the works for several years and had been organized in response to a growing need to support government agencies responsible for regulating sports betting. in their jurisdiction. Sports betting in the United States continues to grow and is now legal in 33 states.
“With some of the sports that people are allowed to bet on, there’s no transparency,” Martin explained. “States have a responsibility to ensure that anything they allow people to bet on is up. This is a new era and this is an area where horse racing regulators have a considerable experience.The world has changed in the past two years and there is a need.More and more states have embarked on the regulation of sports betting.
SBRA’s goal will be to ensure standards and best practices are in place to promote integrity and transparency in sports betting. Martin said SBRA will operate as a stand-alone committee of ARCI that will be open to all sports betting regulatory entities, including those that are not already members of ARCI. SBRA’s policies will mimic rules and standards already established by ARCI in horse and greyhound racing.
“This is an extension of what ARCI will be working on,” Martin said. “We will in no way diminish what we do on the horse racing side. The perception is that we are part of the racing industry, but the reality is that we serve the general public. Based on the integrity issues that exist in human sport, and when you look at the comparison of what’s being done in horse racing with respect to transparency of officials and anti-doping, it’s this transparency that provides consumer protection for the public that is betting on and supporting these sports.
Martin said SBRA will hold its first meeting on July 10 in Boston in conjunction with the National Conference of Gaming State Legislatures.
Also during Wednesday’s session of the ARCI conference, Ben Liebman, government attorney-in-residence at Albany Law School, reviewed ongoing federal legal challenges to the Horse Racing Integrity and Safety Act. .
Liebman reviewed the two court cases that challenged HISA – the federal lawsuit filed by the State of Oklahoma in April 2021 and another lawsuit filed by the National Horsemen’s Benevolent and Protective Association (NHBPA) that was dismissed in March 2022 when US District Court Judge James Wesley Hendrix said that while the Court recognized that HISA pushes the boundaries of public/private collaboration, the law as it is constructed remains within current constitutional boundaries.
Liebman said one of the main issues regarding the HISA’s constitutionality case is the question of how subordinate the Horse Racing Integrity and Security Authority is to the Federal Trade Commission ( FTC).
Liebman used an example comparing HISA and the FTC to the Financial Industry Regulatory Authority (FINRA) and the United States Securities and Exchange Commission (SEC). FINRA, a private self-regulatory authority that regulates 624,000 financial brokers, is overseen by the SEC. Liebman explained that before a rule created by FINRA takes effect, the SEC must approve that rule. The ability of the SEC to control and supervise FINRA makes FINRA constitutional.
“You have a very strong belief that because of the way FINRA has operated, the authority of HISA should have the powers that are granted to FINRA,” Liebman said. “That question becomes a question of whether the Authority controls the regulation of racing or whether it is controlled and subordinate to the Federal Trade Commission.”
Liebman added that while the FTC can review and approve rules set forth by HISA and can suggest changes, it cannot promulgate rules itself and has no power over authority members and their terms. This raises the question of whether the FTC has sufficient authority over HISA. In the NHBPA case, Judge Hendrix said that, based on the current wording of the law, HISA is subordinate to the FTC because only the FTC can approve its rules and because the decision-making process satisfies due process. .
Another issue that could arise in ongoing court cases relates to anti-requisition, which means that Congress cannot take over a state’s machinery of government and force it to do its bidding. Liebman said the court must determine whether HISA would cause states to lose their ability to fund their racing integrity programs and whether it would strip law enforcement of federal service through mandatory cooperation. Liebman admitted that this problem alone would probably not lead to a total invalidation of HISA and its power.
Liebman listed several changes that could be made to HISA to help it defend its constitutionality, including ending the Mandatory Cooperation Clause, giving the FTC power over Authority member terms, and the ability to remove members, giving the FTC greater rule authority or even the ability to promulgate rules itself and making all or nearly all Authority members unaffiliated with the racing industry .
“Even if the higher courts change the concepts of delegation and public control of private regulatory power, it is hard to imagine that most of HISA cannot be saved because it looks so much like FINRA,” he said. -he declares. “It is unimaginable that a court decision would blow up the country’s current system of financial regulation. Maybe the Authority doesn’t always win and maybe they won’t get what they want, but chances are they will get what they need.