Group Created with Sketch.
Volume 25 No. 4

Leagues and Governing Bodies

MLB brass hopes to align financial incentives between state and sport to ensure a clean game
Photo: GETTY IMAGES

MLB, NBA and PGA Tour officials have "pitched Rhode Island lawmakers for a cut of the action" on sports betting should the state legalize it, according to Patrick Anderson of the PROVIDENCE JOURNAL. The leagues proposed a 0.25% "'rights and integrity fee' of all money bet on their sports in the state, an offer they are advancing in state legislatures across the country." It is "unclear" whether the other pro leagues, including the NFL, "agree with the idea." The leagues also "want the state and its chosen gambling operator to share betting data with them and use their official statistics, which would be licensed, presumably at an additional cost." Additionally, they seek "certain kinds of bets that encourage fixing, such as wagers on someone missing a putt, to be off limits." MLB Senior VP/League Economics & Operations Morgan Sword said that such a deal would "'align the financial incentives' between state and sport to root out black market gambling while ensuring a clean game" (PROVIDENCE JOURNAL, 5/16). MLB Senior VP/Investigations & Deputy General Counsel Bryan Seeley said that the league "has spoken with a dozen state legislatures to request that a fee be included in any potential legislation." He added that MLB has "lowered its request to 0.25% of the money wagered from 1%." Seeley "likens the fee to a royalty payment." However, he added that it also "reflects increased costs for tracking betting activity and accounts for the possibility of reputational risk to the league" (WALL STREET JOURNAL, 5/16).

JUST THE BEGINNING: SPORTSNET.ca's John Shannon noted there are "plenty of hurdles to pass" before revenue from sports betting "flows to the leagues and teams." Even then, there is "no guarantee any money will flow that way, or at least substantially." The ruling "allowed for all 50 states to control sports gambling in their own jurisdictions," so there "could be 50 different sets of rules as it pertains to sports gambling." That is "assuming all the states will eventually legalize the activity." North American pro sports leagues "control their intellectual property through copyrighted names, logos, video footage and proprietary data." There is "little to no indication that the new sports gambling systems will require any of those elements" (SPORTSNET.ca, 5/15).

ABILITY TO GROW FAN BASE: MLS Commissioner Don Garber said legalized sports betting is "not just about people betting on games or having the in-game bets, prop bets." It also is a "matter of how do we build a fan base?" Garber: "To be one of the top leagues in the world, we gotta grow our fan base. We have to have more fans. We have to have higher television ratings. We have to engage with our fans. Maybe sports betting becomes one of those ways that we can build a fan base." He said MLS "could work with some of the providers to be able to provide exposure to our players and have them engage more with our games." Garber: "Ultimately that will be a positive. But it’s a day old. There’s a lot of work that needs to be done" (K.C. STAR, 5/16).

WHERE WILL BIGGEST IMPACT BE? In Charlotte, Brendan Marks writes it could be argued that NASCAR is the sport "best-positioned to capitalize on the legalization of sports gambling." The ruling opens to door for NASCAR "to make substantial changes to improve its overall health and standing among sports fans." NASCAR should "allow fans, especially those in attendance, to gamble throughout the contest." Take a "brief intermission after each stage" and "let fans scramble to on-track, parimutuel betting booths to make new picks for the next segment." It is a way to "increase viewership and engagement throughout the race, not just at the end" (CHARLOTTE OBSERVER, 5/16). GOLFCHANNEL.com's Randall Mell wrote legalized sports gambling "will change the nature of professional golf more than it will any other sport." With gambling "unshackled, with betting on golf inevitably growing more widespread, interest in the game will evolve." It will "change the nature of galleries, with fans slowly beginning to see their favorite players evolve into favorite investments" (GOLFCHANNEL.com, 5/14).

NFL was long resolute in its belief that legal sports gambling would be a threat to its integrity
Photo: GETTY IMAGES

The NFL is "shifting its focus to how gambling can help stanch the erosion of its audience -- and grow its sport to even greater heights," according to Andrew Beaton of the WALL STREET JOURNAL. The NFL was "long resolute in its belief that legal sports gambling would be a threat to its integrity." However, the arrival of legal gambling "comes at a moment when the NFL’s grip on the American public is weakening." Following the approval of the Raiders' relocation to Las Vegas last spring, league execs "set out to fully understand what legal gambling would mean." They met with sports betting industry execs to get a "comprehensive look at all aspects of bookmaking, regulation and protecting the league’s integrity." From all of that, the league’s presentation to owners this past March "focused on the potential to grow the game in key demographics, and in particular, two potential growth targets: younger fans and foreign audiences." A source said that NFL officials believe the gambling proposition will be "more appealing for younger fans -- and more lucrative to the league, when they sort through the legalese and license video to gambling platforms." Meanwhile, the NFL is "approaching the topic differently than some of its peers."  While MLB and the NBA have been "lobbying various states" for an "integrity fee" on bets, the NFL has been "more focused on licensing data to legal bookmakers." The hope is that sports books will be "legally required to use official, league-provided information" (WALL STREET JOURNAL, 5/16). ESPN's Don Van Natta Jr. cited a source as saying that the NFL is "opposed" to an integrity fee and will likely make that feeling "public in the coming days or weeks." The league "just doesn't think an integrity fee of 1% is in anyone's interest." It does not work "from a political perspective," as no organization "wants to be seen shoveling money at leagues and billionaire owners" ("OTL," ESPN, 5/15).

SHOW ME THE MONEY! THE ATHLETIC's John Middlekauff wrote the NFL "stands to prosper the most, mainly because football is the most heavily bet upon sport." The "fervor and overall consistency in which people bet the NFL is unmatched during the fall." One team president indicated the league is "all over this." Middlekauff noted the other 31 team presidents are "thinking like this as well." Middlekauff: "Cha-ching! That’s how the NFL works. The owners are true capitalists. Willing to make money off anyone, anytime. Always ready to pounce when a new revenue stream becomes available. Why couldn’t the NFL have a sports book at its stadiums?" (THEATHLETIC.com, 5/15). ESPN's Scott Van Pelt said once the NFL "abandons all the pretense that gambling's awful and follows the lead of the other leagues," it "will embrace it." Van Pelt: "Especially is they're making money off it" ("SportsCenter," ESPN, 5/15).

EVERYTHING IS IMPORTANT: THE MMQB's Peter King writes there is "no question there are some benefits for the NFL," and the league is "excited about the money potential, to be sure." They also are "excited that fans who might not otherwise be engaged in an inconsequential Cleveland-Cincinnati game in Week 15 would be engaged if they could put some money on it" and are energized "about potential TV-rating hikes for all games." However, the "operative word" among some people in the NFL is "caution." There is just "too much they didn’t know yet." The NFL is going to "figure a way to put some insurance policies in place, but insurance policies are not going to stop every chance of a Pete Rose story happening" (SI.com, 5/16).

PERFECT TIMING: In DC, Thom Loverro writes under the header, "NFL Catches Life Preserver With Legalized Sports Betting." The NFL has been "reeling from one series of body blows after another." Legalized sports betting can "put the brakes on all of this, and the NFL knows it." It can, at least for a while, "drown out the noise that has put football on the defensive, as fans play with their new shiny toy -- legalized sports betting." Loverro: "Don’t be surprised to see sports betting opportunities in NFL stadiums -- perhaps right in your seats -- from winners and point spreads to all sorts of prop bets" (WASHINGTON TIMES, 5/16).

The NWHL and CWHL seem to be stockpiling assets for a battle of attrition instead of coming together
Photo: NWHL

Veterans on the U.S. women's hockey team "want to use their influence to achieve another long-sought goal: creating a single North American women's professional league," but several obstacles will "test the players' sway, including a standoff among other influencers," according to Seth Berkman of the N.Y. TIMES. USA Hockey and the NHL have "remained on the sidelines as professional women's hockey matured in recent years." Instead of coming together, the two North American leagues -- the NWHL and CWHL -- "seem to be stockpiling assets for a battle of attrition." The four-team NWHL yesterday "added its first expansion team: the Minnesota Whitecaps," and last year the CWHL, which began play in '07, "added two franchises from China to make it a seven-team league." With the '18-19 season set to begin in five months, U.S. Olympians have "not committed to either league, hoping instead that they can quickly get women's hockey in harmony." Gold Medal-winning U.S. F Hilary Knight said, "There's definitely conversations happening behind the scenes, and I definitely see movement." U.S. F Jocelyne Lamoureux-Davidson said, "If North America can get on the same page and get one league, I also think we can get top European players to play, and that's when I think you see a huge stride in women's hockey internationally." But Berkman notes outside of a '15 outdoor exhibition, the two leagues have "shown little inclination to work together." NHL Commissioner Gary Bettman said that as long as the NWHL and CWHL continue to operate separately, the NHL "would not interfere, even though that leaves 'two leagues where neither is perhaps as strong as it should or could be.'" Lamoureux-Davidson: "It would be nice to see a little bit more of an active approach than a passive approach from some higher-up people" (N.Y. TIMES, 5/16). NeutralZone.net's Jashvina Shah tweeted, "I don’t think there’s anything wrong with two leagues. Competition is good and the NWHL gives fans in non-college hockey areas in the US a chance to watch women’s hockey."

LONG TIME COMING: NWHL Commissioner Dani Rylan said that adding the Whitecaps has been a "priority" since the league's inception in '15, adding that it "started coming together a few months ago after holding the annual all-star Weekend at the TRIA Rink," the Wild's new practice rink. In St. Paul, Dane Mizutani notes it is "still unclear where the Whitecaps will play their home games next season," but an announcement is "expected to come in the coming weeks." The Whitecaps will "initially be owned by the league" (ST. PAUL PIONEER PRESS, 5/16). In Minneapolis, Rachel Blount notes while the Whitecaps' core management team "will remain," it is "uncertain how many current and former players will return." Gold Medal-winning U.S. women's hockey players Fs Hannah Brandt, Monique Lamoureux-Morando, Lamoureux-Davidson, Kendall Coyne and G Alex Rigsby "played for the Whitecaps" in '16-17. Rylan yesterday said, "We're ready to expand. We wanted to take our time with it" (Minneapolis STAR TRIBUNE, 5/16). U.S. Sen. Amy Klobuchar (D-Minn.): "The #StateofHockey gets another all-star team! The@MinnesotaWhitecaps are the first non-east coast team to join the NWHL. It will be great to have even more athletic talent headed to our state."