Lawmakers propose bill to regulate sports betting operators in the U.S.

• A bill addressing sports betting at the federal level has been introduced by two U.S. lawmakers.
• The proposed legislation would focus on affordability, advertising and artificial intelligence.
• The sports betting industry has brought benefits, including tax contributions, and state regulations are sufficient, according to operators.

Over the past six years, sports gambling has grown rapidly in the United States, prompting two lawmakers to propose federal regulations on the activity.

On Thursday, Rep. Paul Tonko and Sen. Richard Blumenthal presented the SAFE Bet Act, which aims to establish federal standards for sports betting operators and address the potential negative effects on public health that may arise from legalizing this activity.

In a press conference on Thursday, Tonko stated that the relationship between the gambling industry and sports has become dangerously high and it's time for Congress to take action.

In 2018, the Supreme Court overturned the federal ban on sports betting, and since then, the industry has grown rapidly. Now, 38 states have legalized sports betting, and in 2023, the industry generated a record $11 billion, representing a 44% increase from the previous year, as reported by the American Gaming Association.

New revenue has been generated for states through taxes as a result of the influx of billions of dollars.

Operators are spending large sums of money to attract customers through advertising, promotions, and incentives due to the rapid expansion.

Sports betting ads are everywhere, from social media to billboards and podcasts, prompting you with endless promotions, Tonko said.

At the press conference, Gordon Douglas, a lawmaker, stated that he has witnessed the difficulties of gambling addiction through his own experience with his son, Andrew, who is a 28-year-old athlete and coach. According to Gordon, Andrew signed up with a gambling company and was bombarded with promotions and advertisements from at least six other companies.

"He transformed into a person who would say anything to obtain money for gambling," he stated. "He reached a point where he wanted to end his life because he saw no escape."

An estimated 7 million people in the U.S. have a gambling problem, with one in five problem gamblers having attempted suicide, according to the National Institutes of Health and National Council on Problem Gambling.

The odds of bankruptcy filing in states with legal betting rose by 25% to 30%, according to a July report.

The lawmakers assert that their aim is not to prohibit sports gambling, but rather to ensure public safety while enjoying it as a leisure activity through the establishment of a national standard.

Blumenthal stated on Thursday that state regulation is weak and inadequate, which is why a national standard is necessary. This standard should not involve banning gambling but rather taking control of an industry that has gone astray.

The bill focuses on three crucial aspects related to sports betting: advertising, affordability, and artificial intelligence.

Blumenthal stated that AI is being utilized to its fullest potential in order to generate the highest profits within this specific industry.

He stated that he intends to forbid the utilization of AI to monitor players' gambling behaviors and personalized promotions.

The bill is also proposing modifications to advertising, such as prohibiting sportsbooks from advertising during live sports events that encourage gambling with "no sweat" or "bonus" bets.

The legislation would restrict customer deposits to five per day and require gambling operators to verify that customers wagering over $1,000 can afford to do so.

Richard Daynard, a law professor and president of the Public Health Advocacy Group at Northwestern, stated that the gambling industry is using a playbook created by the tobacco industry, which poses a direct threat to public health.

The sports betting industry is facing opposition from operators who argue it has brought benefits.

The American Gaming Association's senior vice president of government relations, Chris Cylke, stated that the bill is a "slap in the face" to state regulators and gaming operators who have invested considerable time and resources in developing the framework as the market changes.

Clyke stated that regulated sports wagering operators in the U.S. are contributing billions in state taxes, safeguarding consumers from unscrupulous neighborhood bookies and illegal offshore websites, and collaborating with over 5,000 state and tribal regulators and other stakeholders to maintain a commitment to responsibility and enjoyable gaming experiences.

Rep. Dina Titus, D-Nev., has publicly opposed the bill, stating that the SAFE Bet Act is outdated and unnecessary.

Douglas wants to prevent others from falling down a similar path as his son, who received help from his family.

""We should limit access to this type of gambling by doing what is right," he said."

If you're feeling suicidal or in distress, call the Suicide & Crisis Lifeline at 988 for immediate help from a trained counselor.

— CNBC's Contessa Brewer contributed to this report.