Making a federal case – Devo Rides (Part 12)

May 27, 2018

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by Trey Nosrac

Part 1 | Part 2 | Part 3 | Part 4 | Part 5
 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11

He sat in a white wicker rocking chair on the front porch of his historic family farmhouse, waiting for me to chauffeur him on a series of errands. My new friend looked like a Norman Rockwell painting. The only clues this was not 1919 were aviator sunglasses fastened to his salt and pepper buzz cut, and a yellow T-shirt with the words “think BIG” in black script letters above his small pocket.

In the car, I clapped three times and said, “I’m impressed, everything you predicted for the past two months came true. Your predictions on the world of legal gambling proved perfect. The Professional and Amateur Sports Protection Act (PASPA )is toast. You told me why it was toast, exactly when the court would rule, exactly how each Supreme Court judge would vote, and what states were ready. I mean, come on man, nobody sees the future like that without a crystal ball.”

“Trey, that’s not the future, just another step toward it.”

“You saw it all with the PASPA call, but I’ve asked you three times how this court ruling is going to work for horse racing and all you do is dance.”

“I have to dance, horse racing is hard to predict. For a long time, horse racing was the ONLY legal sporting game in town, now they will have company. It’s sort of like going from being the only child to being the stepchild in a big family.”

“Nice analogy, not a good answer.”

He slipped into teaching mode, “Two aspects of the PASPA ruling were, in my opinion, very important and people are not talking about them. These are foundations of the ruling that are probably more important than the ruling itself. First, the Supreme Court rejected the PASPA statute completely, not partially. They left no grey area for challenges. This will speed up the process, maybe by a year or two. Second, you may have noticed that the Judges affirmed the ultimate power of the Federal government to legislate gambling – if they choose to do it.”

I huffed, “Blah, blah….you’re getting off track in your horse racing answer.”

He smiled, “Here is what I see right now — harness racing, horse racing, casinos will all get a short-term bump. Then, there will be problems. My short term answer is that horse racing will prosper, if it gets on the menu.”

“On the menu — what are we, a sandwich?”

“Get on the menu of federally legislated regulated gambling.”

“You see the Feds taking over? You see that as the next big move?”

“I predict that the Feds take control under the commerce clause, perhaps as early as the next election cycle. They will take control not to ban gambling, but to regulate it. The government, at every level, wants money but not headaches — so they outsource it to…”

I shrug.

He opens his hands like an evangelist, “Come on Trey, this is your big moment.”

I tiptoe in with my guess, “A major technology firm like yours.”

“Bingo, my firm or a conglomerate will be the national gambling hub. We work with the Feds and states to regulate, our data will be useful.”

I sighed, “That seems very radical and very complex.”

“You want complex? Think deep. Think ahead. Imagine 50 states with 50 gambling situations, multiple sports, international outfits, dark money, cheating, shell companies, offshoring, piracy, enforcement, multiple types of wagers and more. The gambling world, even the legal gambling world, would be chaos in the cloud-based world. There would be a race to the bottom. You want a swamp, how about a wager handled by an anonymous Internet troll on who makes the first personal foul in a Slippery Rock College basketball game.”

“Of course, you have a plan.”

He shrugged, “Logic would dictate a structure where money all goes through one portal. Each sport like horse racing, baseball, college sports, etc, has a division under the gambling umbrella. There will need to be what are called ‘limiting structures’ for legal sports gambling to be contained.”

I said, “A whole new world of gambling for horse racing, major sports, and minor sports.”

“To work, there has to be one coordinated pipeline and the government must sign off on what can flow through it. This may not be a great analogy but you cannot grab a plane and charge six people for a flight from New Jersey to Texas and just take off into the wild blue yonder. The plane must be registered, monitored, register a flight path, pay taxes, and be subject to fines. All flights and planes must be approved by the Federal Aviation Administration.”

We were silent for a minute and then I chimed in, “It’s easier to see a rogue plane than a cyber thief.”

He nodded. ”True, but we will get better at finding thieves, and if the government is behind us, that will be a much stronger deterrent.” He paused and then surprised me by switching roles, “Trey, imagine you work at my job, you develop future strategies. Assume, as I predict, the Federal government will make the rules of the road using the interstate commerce clause. What do you see as the hub, the crux, the pivotal point for your little world of horse racing?”

I said, “Give me a minute.”

I took two minutes of heavy thinking and answered, “People at the table, politicians who will vote on what sports are legal and who gets a percentage of wagered money.”

He nodded. “Today, your sport needs to identify your allies and find politicians who run on gambling legs. The politician should lean on agriculture, social benefits, historical legacy, and integrity. Have these people run political races FOR these things and let them run against others who are against gambling, against farms, against progress, and against isolation.

I winced, “Voting and politicians — that all seems like the far-off future that will never happen.”

“Trey, that is exactly what you said about PASPA when we first met three months ago. This federal question will be on the table much faster than you think. It offers real possibilities for the world of horse racing.”

I sighed. “As usual, I will be a bystander while you Masters of the Universe make your moves that will affect little galaxies like harness horse racing.”

“No, Trey. You will be a voter, and soon I will show you how you can be much more.”

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