How federal decriminalization of marijuana may enhance interstate sports activities betting offers
A new administration could mean a new approach to some sensitive issues in both areas marijuana and Sports betting.
With Michigan Vote in October to take the state into account Gaming control board lawful interstate and tribal treaties for Online poker, a key question that has haunted the world of sports betting, surfaced again: When will interstate sports betting compacts appear?
Sports betting compacts are currently not feasible due to the Wire Actbut could be a Joe Biden Change of management signal?
The marijuana industry can provide some insight.
Background information on the challenges facing the marijuana industry with federal law
As you most likely know, the legal marijuana industry has in the United States.
To begin 1996, States have legalized medical marijuana in spite of that Controlled Substances Act of 1970 federal law declaring the substance had no accepted medical use and was a criminal offense he owned or distributed. Despite the federal ban, medical marijuana is now legally in 34 Conditions.
Another 15th States, along with that District of Columbia and Guam now allow the sale of recreational marijuana – an adoption trend that began in 2012.
Like the expansion of state-regulated sports betting, the marijuana industry’s scalability has been hampered by state barriers. For example many Banks I have been extremely reluctant to even open accounts for marijuana companies for fear of offending federal agencies about the looming federal crime.
Similar, but not the same
While sports betting had fewer banking problems than the marijuana industry. In spite of widespread government legalization and public support, both industries are unable to achieve their full potential.
The Sports Betting Challenge addresses the uncertainty surrounding the Wire Act, which clearly positions the activity differently from other gambling activities that are widely believed not to fall within the scope of the obsolete law.
Where is the focus?
While the Biden government has a proven record of supporting the decriminalization of marijuana, and some believe it will or should support full legalization, confidence seems to be growing that federal marijuana policy will change.
The House passed a law that would further decriminalize the substance December 4th. The Senate doesn’t seem ready to follow suit anytime soon.
A small but important difference
The difference between decriminalization and legalization may be subtle, but it is significant.
Decriminalization removes criminal penalties, but allows civil law violations. This law would effectively leave marijuana unregulated at the federal level.
legalizationOn the other hand, the creation of a regulatory environment would be made possible.
Change of tide
The United Nations recently voted to remove marijuana from its narcotics list. This, along with a feeling that the Biden government could be more hospitable to the marijuana industry, has boosted marijuana stocks.
The marijuana industry, despite its tremendous growth, has long struggled for profitability. Indeed, the need to effectively replicate an industry from scratch in each and every state is quite costly.
Congress has recognized the challenge of restricting a growth industry due to federal law that no longer appears to be serving its intended purpose, with more than half of the nation’s states supporting the activity.
For more than two years, Congress tried to pass the law SAFE Banking Act (Secure and Fair Enforcement). The bill passed the house 321-103 on September 25, 2019, but suffered in the Senate. The bill would amend federal laws to allow banks and credit unions to safely conduct business with cannabis and cannabis-related companies.
With no legalization or enactment of laws like the SAFE Banking Act, marijuana companies that use banks find the few financial institutions ready to go into business and often have to pay additional fees.
A new season
The start of a new presidential administration could bring about the changes necessary to decriminalize marijuana at the federal level that would relieve the marijuana industry.
While legalization is likely the preferred route, decriminalization coupled with some move by Congress could take the growth of the industry to new levels.
What are intergovernmental compacts?
Intergovernmental treaties are essentially agreements between states that allow operators to group players from different states together. This type of relationship allows for increased liquidity as players are placed in the multistate pool.
The states still collect tax revenues based on the location of the weather. Interstate Compacts have been a popular addition to the regulated online poker industry since 2012.
What about sports betting?
President-elect Biden has proposed that at least the previous interpretations of the Wire Act (which only apply to sports betting) be reversed. The next president also articulated, according to the CDC Gaming Reports, that he “does not support adding unnecessary restrictions to the gaming industry as the Trump administration has done”.
That failed Hatch-Schumer Invoice and then Romney-Schumer The bill contained changes to the Wire Act that would have enabled interstate sports betting compacts similar to those in poker.
Despite widespread opposition to both iterations of the bills, interstate tradeoffs are something that many in the industry seem to hope will be feasible at some point. Changes to allow for intergovernmental compacts can create a more competitive environment for consumers and allow smaller operators to increase their footprint.
How could that come together
While sports betting (or the decriminalization of marijuana) is unlikely to have a very high place on the Biden government’s list of immediate priorities, a move that enables interstate monetary movement in the marijuana industry could spell readiness to allow the interstate transition of other legal transactions, such as those made possible by interstate sports competitions.