SAFE Bet Act: Inside The Federal Sports Betting Bill
A growing sports betting addiction crisis in the U.S. has led to a proposal for federal guardrails.
In September 2024, a new piece of legislation called the SAFE Bet Act (H.R.9590) was introduced into Congress. It is the first comprehensive legislation that would address the public health threats created by the widespread state-by-state legalization of sports betting.
A U.S. Supreme Court ruling in 2018 struck down a 1992 federal prohibition on sports betting.
The bill would require states that offer sports betting to meet “minimum federal standards” in advertising, affordability and artificial intelligence, among other provisions.
Sports betting addiction statistics show that 30-40% of online bettors experience gambling problems, with as many as two-thirds of NFL bettors in particular experiencing problems.
About 20% of American adults have an online sports betting account, according to a 2024 St. Bonaventure/Siena Research survey. That equates to around 51 million online sports bettors.
So, as many as 20 million Americans are experiencing problems related to sports betting. The severity of addiction can vary. A life-threatening gambling addiction can take years to develop. Studies show that 40% of people with a gambling problem consider suicide.
The vast majority of sports betting industry revenue comes from people experiencing problems.
Let’s dive into what’s in the SAFE Bet Act.
Federal Sports Betting Standards
Essentially, the federal government would have decision-making power over whether a state can sanction online sports betting apps. The SAFE Bet would:
Establishes a prohibition but creates an exception for states with an approved application from the Department of Justice to operate a sports betting program.
Establishes penalties for non-compliance.
States with existing sports betting industries will have one year to comply.
States must submit a sports betting application to the Attorney General, with applications including detailed attestations that show how the state has met the federal standards.
Each application approval is valid for three years and can be renewed.
Requires that states offering a sports betting program meet minimum federal standards concerning advertising, affordability and artificial intelligence
About 30 states have sanctioned online sports betting, with a handful of other jurisdictions allowing only in-person bets. Notably, California and Texas, the two most populous states, hadn’t sanctioned sports betting at the time of the SAFE Bet Act’s introduction.
Some online sports betting states also allow dangerous online casino gambling. The SAFE Bet Act deals with only sports betting and not online casino gambling.
Sports Betting Advertising
Sports fans have become inundated with betting advertisements on social media, TV, print and radio since 2018, fueling an addiction crisis. Celebrities like LeBron James have endorsed gambling apps, which lure young people to sports betting. The SAFE Bet Act would:
Prohibits sports betting broadcast advertising between 8 a.m. to 10 p.m. local time
Bans sports betting advertising during live sporting events.
Prohibits sports betting advertisements designed to induce gambling with “bonus,” “no sweat,” “bonus bets,” “odds boosts,” or similar promotions.
Prohibits sports betting advertising designed to induce use of gambling products showing the audience how to gamble or explaining how wagers work.
Bans reckless or purposeful targeting of problem gamblers, individuals suffering from gambling disorder, or individuals ineligible to place a bet, including those under 21.
The SAFE Bet Act seeks to curb the sports gambling industry in parallel to a class-action lawsuit against DraftKings over an allegedly misleading and reckless advertisement.
Sports Betting Affordability
Studies have shown that residents of sports betting states have worse overall financial health, including a greater likelihood of bankruptcy and lower credit scores. The SAFE Bet Act would:
Bans sportsbooks from accepting more than 5 deposits from a user in a 24-hour period.
Prohibits operators from accepting deposits via credit card.
Requires operators to conduct affordability checks on customers before accepting wagers in excess of $1,000 in a 24-hour period or $10,000 in a 30-day period and verify that proposed deposits do not exceed more than 30% of the individual's monthly income through the application of a reasonable lender standard.
Requires operators to check a national self-exclusion list before allowing bets.
Five deposits in a 24-hour period into a single sportsbook is an especially modest proposal, considering that most online sports betting states license many different gambling apps.
Some sportsbooks allow customers to set their deposit limits, but that places the onus on the player and not the sports betting app. The proposed legislation would change that.
Sports Betting AI
There’s widespread anxiety about AI across various industries, especially with gambling. However, online sportsbooks are proficient at siphoning money from players without the use of AI or with relatively limited/primitive use of the evolving technology.
Betting app algorithms (akin to AI) already do an extraordinary job of harming sports fans, so while AI can boost the addictiveness of the products, it isn’t necessarily a boogeyman. Still, the SAFE Bet Act would seek to prevent AI use for sports betting from getting further out of control.
Prohibits the use of AI to track individual player’s gambling habits.
Prohibits the use of AI to create individualized offers and promotions to customers.
Prohibits the use of AI to create gambling products, such as microbets.
It appears the details of how to ban the industry’s use of AI would be left to the states.
Microbetting, such as betting on a single pitch of a baseball game, requires AI to fully automate betting odds and lines with accuracy (and greater profitability for the betting app), allowing for faster gambling with less friction. DraftKings recently acquired SimpleBet, a micromarket pricing company, for up to $195 million to bolster its machine-learning capabilities.
Bottom line: With or without AI, betting apps cause immense harm to many users.
In-Game Betting
Related to creating guardrails for in-game gambling advertising and in-game microbetting via machine learning, the SAFE Bet Act would ban any in-game bets.
The bill states that it would prohibit “a state sports betting regulatory from approving, or a sports wagering operator from accepting” a bet on any sporting event that has “commenced.”
This federal guardrail would help consumers because in-game betting is highly addictive and promotes rapid wagering. Furthermore, the sportsbook has an extraordinary advantage with information when setting the odds for these bets.
Short time delays in sports broadcasts also often give sportsbooks a huge advantage.
Prop Bets
Most online sports betting states allow prop bets on college teams and athletes, which has created abuse and even threats toward student-athletes. The NCAA has pushed for a complete prohibition on college props, with the betting industry fiercely opposing this proposal. The SAFE Bet Act would prohibit all prop bets featuring college and amateur athletes.
National Sports Gambling Self-Exclusion
There is currently a patchwork of state self-exclusion lists for online sports betting, and often, states have separate lists for online betting and entering a brick-and-mortar casino.
Most troubling is that a person struggling with online sports gambling addiction can simply visit a neighboring state to bet again after registering for a self-exclusion list in their home state.
The SAFE Bet Act would authorize a ‘National Self-Exclusion List’ at the Substance Abuse and Mental Health Services Administration (SAMHSA). No timeline for the list was mentioned.
SAMHSA would maintain and administer the list based on data from each state’s sports gambling regulatory entity.
There have been many instances of state-licensed online sportsbooks taking bets from people on a sports betting self-exclusion list in violation of state law and regulations. The fines for these violations have been mere slaps on the wrist. The SAFE Bet Act appears to leave enforcement of not taking bets from self-excluded players to the states.
Signing up for a self-exclusion list typically also prohibits a sportsbook from sending you direct marketing materials. Many sportsbooks have also violated this rule.
Studying Sports Betting
Since 2018, advocacy groups, nonprofits, colleges and universities and others have published seemingly countless studies about the harmful impacts of sports betting.
Under the SAFE Bet Act, federal agencies would be tasked with investigating the harms caused by the widespread state sanctioning of online sports gambling. The SAFE Bet Act would:
Requires a report from the Surgeon General on the public health impacts associated with widespread legalization and promotion of sports betting, focusing on youth.
Requires the Centers for Disease Control and Prevention, in coordination with other appropriate agencies, to enhance and expand infrastructure to track gambling addiction.
Authorizes SAMHSA to conduct a national survey on use rates and outcomes of betting.
FAQ
What does the SAFE Bet Act stand for?
The legislation’s name is an acronym for the “Supporting Affordability and Fairness with Every Bet Act of 2024.” It would establish guardrails for the online sports betting industry.
Can a state adopt stronger sports betting regulations?
Yes, states and tribal governments are not preempted from enacting stronger standards regarding sports betting. For example, some state policymakers have considered banning betting app push notifications.
Does the legislation create a national legal betting age?
The SAFE Bet Act doesn’t appear to create a nationwide legal age for traditional sports gambling. The legal gambling age in most states is 21, but some online sports betting states recklessly permit wagering at 18. Many tribal casinos with sportsbooks also allow betting before a person turns 21. The legislation doesn’t address DFS (daily fantasy sports) gambling, where the legal age is widely 18.
Who are the sponsors of the SAFE Bet Act?
The legislation was authored by Rep. Paul Tonko (D-NY-20) and Sen. Richard Blumenthal (D-CT). Both policymakers come from states with widespread online sports gambling addiction.
How did the gambling industry respond to the SAFE Bet Act?
The AGA, the casino industry lobbying group, responded harshly to the legislation’s introduction. The group issued a statement on Sept. 12, 2024.
“Today’s regulated sports wagering operators are contributing billions in state taxes across the U.S., protecting consumers from dangerous neighborhood bookies and illegal offshore websites, and working diligently with over 5,000 state and tribal regulators and other stakeholders to ensure a commitment to responsibility and positive play. Six years into legal sports betting, introducing heavy-handed federal prohibitions is a slap in the face to state legislatures and gaming regulators who have dedicated countless time and resources to developing thoughtful frameworks unique to their jurisdictions, and have continued to iterate as their marketplaces evolve.”
It’s misleading to say that states developed sports betting laws and regulations unique to their jurisdictions, as many states essentially imitated frameworks from states that had already legalized sports gambling.
It’s also misleading to claim that the so-called regulated sports betting industry has committed to “responsibility.” A mounting betting addiction crisis plagues the U.S.
Does the SAFE Bet Act address player limiting?
No, the legislation doesn’t address sportsbooks banning players who win bets.
Does the legislation mention parlays?
No, the SAFE Bet Act wouldn’t prohibit the offering of parlay bets. These wagers are bad for consumers because sportsbooks have their highest winning percentage on parlays. These bets are especially harmful for many people because of the near-miss effect.
Will the SAFE Bet Act pass?
It’s unclear if the legislation will pass and be signed into law, especially as a stand-alone measure. If it passes, it would likely be included in a larger piece of legislation. The SAFE Bet Act could also be amended as it works through the legislative process.
It will be a long process to put into law any of the SAFE Bet Act’s provisions.
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