Sen Blackburn says hearings on sports betting are likely to start in ‘few’ as Congress weighs federal action

Sen. Marsha Blackburn says Congress isn’t done looking into the rapid expansion of sports betting markets and predictions.

In fact, Wednesday’s hearing may be just the beginning.

Blackburn, R-Tenn., who chairs the Senate Commerce Committee on Consumer Protection, Technology, and Data Privacy, told Fox News Digital/OutKick after hearing that lawmakers now have to decide where Congress should step in and where states should continue to control. Also, he stressed the importance of protecting the integrity of American sports before the problem gets worse.

“One of the things that should be considered today [was] we look at the impact on the integrity of sports and games and say, okay, how do we make sure we keep fair play,” Blackburn said.

The hearing, titled “No Sure Betting: Protecting the Integrity of Sports in America,” examined the rise of legal sports betting, sports-related prediction markets, gambling addiction, social media advertising and recent scandals involving professional and college sports cheating.

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Blackburn said one of the biggest takeaways was the need to find the right role for government regulators in comparison to the country’s sports officials.

“You heard well today about the regulation of speculative markets, the difference between what you have as betting and playing,” Blackburn told Fox News Digital/OutKick. “And we’ll have to analyze what part of that should be federal and what’s left to state regulators.”

That question remained at the heart of the case.

Sports betting is currently regulated primarily at the federal level. But the prediction markets, which allow users to trade contracts tied to future events, have argued that they fall under federal commodity law and the Futures Trading Commission.

That distinction has become more important as some betting markets have entered into contracts for sports-related events.

To critics, that looks a lot like sports betting by a different name.

“You have to ask that legitimate question, what portion of this prediction market participation is going to fall on that bet?” Blackburn said. “And what part is called just another name, betting? And then what is the rest of the traditional prediction market, if there is such a thing at this time, and it should stay with the CFTC.”

American Gaming Association President and CEO Bill Miller was very specific during the hearing.

Miller accused the speculation markets of operating as “backdoor sports betting operations” and said they undermined national and international sports programs that have been built since the Supreme Court struck down the anti-sports betting act (PASPA) in 2018.

“They operate sports books on a national level without the restrictions and structures that have been created in Tennessee or any other state that has chosen to legalize sports betting,” Miller said.

Polymarket is one of the leading speculative market companies operating across the United States. (Spencer Platt/Getty Images)

Former attorney Patrick McHenry, who now serves as senior counsel for the Coalition for Prediction Markets, has stepped down.

McHenry argued that prediction markets are very different from sportsbooks because users trade against odds, while the platform collects fees for the activity.

“In a casino or a sports book, the house sets the odds and the profit when the customers lose,” McHenry said. “In the prediction market, participants trade with each other, while the platform receives transaction fees to facilitate the market.”

Several senators weren’t buying it.

Sen. John Curtis, R-Utah, said he would have a hard time explaining the difference to people back home.

“If I heard that in Utah, I would say I think there’s a possibility, I’m going to put money down, and I have a chance to make a lot of money or lose money with that,” Curtis said. “Tell me how that’s not gambling.”

Sen. Jacky Rosen, D-Nev. puts it even more clearly.

“If it walks like a duck and quacks like a duck and looks like a duck, it’s probably a duck,” Rosen said.

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But the prediction markets were part of the listening.

Blackburn also made it clear that he is concerned about young people being exposed to online gambling content.

In his opening statement, Blackburn said sports bring families together and teach young people “cooperation, discipline, sacrifice, and fair play.” But he cautioned that fans don’t want to wonder if games are rigged or if a player misses a free throw “to make another buck on the side.”

He also pointed to the explosion of legal sports betting on mobile devices.

“What was once limited to a few places is now available in almost every corner of the country,” Blackburn said during the hearing. “It’s carried with you day and night. It’s on your cell phone.”

Currently, sports betting is legal in 39 states and Washington, DC Prediction markets are legal in all 50 states.

Blackburn then turned to the young people.

“Our young men are in trouble, with over a third of boys between the ages of 11 and 17 admitting to gambling in the past year,” said Blackburn. “60 percent of those who have seen online gambling content say they have identified it through their social media algorithms. [them]. They didn’t want it. This is not safe. It has to stop.”

He added during the hearing that “advertising to children is disgusting.”

Sen. Blackburn noted that young Americans are at high risk of becoming addicted to gambling. (Getty Images)

After the hearings, Blackburn told Fox News Digital/OutKick that companies can’t just say they target kids when they advertise in places where kids spend time.

“I think they need to clarify this for you,” Blackburn said. “I thought whether it was sports or it was predictive marketing, the fact that they both advertise on these social networks – now we know who the main audience and the target audience are when it comes to these platforms like Instagram, like Snapchat, TikTok.”

Blackburn said those platforms are designed to capture young users and keep them hooked.

“You look at the fact that you have these ads and these ads that come up and the processes that are going on to give things back to these kids,” Blackburn said. “It’s not a one-and-done thing… Repetition.”

This, he said, is where the industry’s defenses are insufficient.

“It’s not enough to say, ‘We don’t market to youth and we don’t market to young people under the age of 18 or 21,’ when those are the places they advertise,” Blackburn said.

Dr. Harry Levant, director of gambling policy at the Public Health Advocacy Institute and a recovering gambling addict, presented some of the most compelling evidence at trial.

He warned that microbetting, betting on instant in-game events, is extremely dangerous.

“The human brain is not designed to absorb an addictive product every 10 seconds or less,” Levant testified.

Levant argued that sports leagues, gambling companies, data providers and technology companies have created a model that pushes fans into regular in-game betting.

“Sports has become like a non-stop gambling machine because of these data agreements,” said Levant.

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Scott Sadin, founder and CEO of Integrity Compliance 360, also testified that some bets are more vulnerable to fraud than others.

“I would definitely categorize a few types of markets as very vulnerable or vulnerable,” Sadin said. “In general, player forums, microbetting, in-game markets, situations where one or more individuals can have more influence than a group.”

That’s important because recent scandals have already raised concerns about athletes, insider information and suspicious betting patterns.

Blackburn cited “high-profile examples of match-fixing in the NBA and MLB” in his prepared opening statement and said they challenge the American public’s trust in the integrity of sports.

One of the clearest examples is the federal case involving Cleveland Guardians forwards Emmanuel Clase and Luis Ortiz, who were charged in connection with an alleged scheme to defraud certain stadiums so bettors could place bets. Both players have pleaded not guilty, and MLB said in March that the pitchers will remain on unpaid disciplinary leave pending the league’s investigation and legal action.

Several high-profile gambling scandals have rocked American professional sports leagues in the past few years. (Kyle Ross/Imagn Images; David Dermer/Imagn Images; Troy Wayrynen/Imagn Images)

Tennessee Sports Wagering Council Executive Director Mary Beth Thomas testified that Tennessee has already moved to ban high-risk betting. He said the state prohibits betting on individual college players, live betting sites for college sports and betting tied to injuries or penalties.

Thomas also said Tennessee regulators have investigated about 25 integrity cases involving suspicious betting activity that could indicate the use of insider information. He said 17 of those cases have been closed and referred to sports governing bodies or law enforcement, including 13 referred to the FBI.

Blackburn praised Thomas during the hearing and pointed to the work being done by state regulators. But he also said Congress now has to decide whether that state-by-state approach is enough.

“That’s one of the issues that we as a committee will need to address,” Blackburn told Fox News Digital/OutKick. “What will be the federal minimum and the states can set their own regulation accordingly? Do we want to do this, or is this a task that should be left directly to the states?”

Blackburn said the committee is not finished.

“This was the first of what I think will be many trials,” he said.

Blackburn said states are already exercising their authority, including suing certain speculators. But he warned that inaction could push more gambling into offshore or illegal areas without real supervision.

“One of the concerns is that you’re going to see a lot of illegal and illegal things, that there’s not going to be any governance or oversight,” Blackburn said.

That is why, in his view, Congress cannot ignore this issue.

“Making sure that the laws that exist in the physical environment are replicated in some way in the physical environment is going to be important for Congress to step in and take action,” Blackburn said.