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Volume 25 No. 30
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Sports Betting Fallout: Leagues Begin To Pitch Legislation To States

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).