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Leagues and Governing Bodies

Sources: NBA-MGM Betting Deal Pegged At Three Years, Over $25M

Silver and Murren appeared alongside each other yesterday to officially announce the partnershipNBAE/GETTY IMAGES

The NBA yesterday became the first major U.S. sports league with an official gaming partnership, signing a multiyear sponsorship pact with MGM Resorts Int'l. The deal, which includes rights to the WNBA, will involve MGM gaining access to official league data for use in betting, use of league marks and cross-marketing activations by both sides. The two entities also will collaborate on content integrations to appear on league platforms. Financial terms were not disclosed, though sources pegged the deal at more than $25M over three years. NBA Commissioner Adam Silver described the pact as "moderate in length," and one designed to provide the league continued flexibility in the emerging betting space. While MGM will gain exclusive rights to the designation of "official gaming partner" of the NBA, the league retains the right to license its data to other gaming operations, and likely will do so. The NBA held an existing relationship with MGM, as the company owns the WNBA Las Vegas Aces and is the title partner of the NBA Summer League in Vegas. Silver said of the MGM deal, "Rather than re-litigating the integrity fee, which is still being hotly discussed state by state, it was about finding an approach unique to us where we both feel we're being fairly treated. Once we began discussions with the states, we were realists as well and saw it was going to be an uphill battle to get the states to agree to what we thought was an appropriate framework" (Eric Fisher, Staff Writer).

DETAIL ORIENTED: The AP noted the NBA's stance has been that "getting accurate stats to bettors is critical so players know what they're betting on and so casinos will know when to pay out." MGM Resorts Chair & CEO Jim Murren said, "I know the value of data. To be able to have the official NBA data for sports bettors around the world is very valuable. I was willing to, and I've paid for that" (AP, 7/31). In N.Y., Kevin Draper notes MGM will "use official NBA data on its betting platform and work with the league to detect and prevent fraud and game-fixing." The league is "eager" to have most other gaming companies "offering sports betting use official league data and work with league officials to prevent manipulation." It is "not clear whether MGM will be able to offer betting" on G League or Summer League games, or if MGM will be "allowed to use certain NBA and WNBA highlights or game videos in its betting products" (N.Y. TIMES, 8/1). ESPN.com's David Purdum wrote now that MGM has signed up, other competitors "have a decision to make: Is the access to data that the NBA is offering worth it?" (ESPN.com, 7/31). Silver said of the MGM deal potentially not being the NBA’s only partnership, “The way to win is not by having exclusive data but it’s ultimately with the user interface and how you use the data.” He added keeping the integrity of the game is “something we’re all focused on throughout the industry.” Murren: “What I’d say to all the other casino companies is that we need to increase the fan experience, we need to ensure the integrity of the game, of the fan experience and we believe at MGM as a leader in this industry we should take the leadership (role)” (“Power Lunch,” CNBC, 7/31). Sports and gaming law attorney Daniel Wallach noted the deal "provides NBA with real-time access to anonymized account-level betting data, which has been one of the key league asks before state legislatures. Gaming industry had been opposed to this. ... Real-time access to account-level betting transactions has long been part of Adam Silver’s vision in monitoring betting markets like a securities exchange to allow for early identification of 'aberrational betting behavior'" (TWITTER.com, 7/31). 

STAMP OF APPROVAL: ESPN.com's Purdum & Rovell noted MGM casinos will be "able to use league and team logos on oddsboards at sportsbooks, something not currently done in Las Vegas." NBA logos and highlights also will "appear on an MGM sports betting app, which will be available to states that approve online sports betting." As of now, only Nevada "offers legal mobile sports betting, but sports betting operators in New Jersey are expected to launch mobile apps at some point" this month. Murren said that his company's sportsbook at the Borgata in Atlantic City would "start offering mobile sports betting at the end of the week, but no official date has been announced." The "most lucrative opportunities figure to come in three to five years when it is projected that more than 20 states will have legalized sports gambling." In the meantime, the NBA and MGM are "expected to promote the direct data feed relationship as a way to enhance the live betting product" (ESPN.com, 7/31).

EVERYONE'S A WINNER: Consumer research firm Telsey Advisory Group Managing Dir & Senior Research Analyst Brian McGill said of the NBA-MGM deal, "It is a win-win for both as it legitimizes sports betting now and the NBA gets some money. The NBA realized they are not going to beat (the casino operators), so they might as well join them." In Las Vegas, Todd Prince writes paying a fee for official data "makes sense because casino operators need it for in-game betting." Investment bank Jefferies Managing Dir David Katz said, "This is the one lever that the leagues have in this negotiation. If they want the flow of data, they have to pay the leagues for it." Union Gaming Dir & Head of North America Equity & High Yield Research John DeCree said gaming companies are "not as common household names as some other industries." DeCree added MGM's partnership with the NBA will "improve commercialization" and "expand MGM's reach to new consumers" (LAS VEGAS REVIEW-JOURNAL, 8/1). NBC Sports Bay Area's Ray Ratto said the NBA-MGM deal “sets a precedent for any other casino that wants to get involved to any level with the NBA.” Ratto: “If they wanted exclusive rights, it was going to cost a hell of a lot more than $25 million. So, basically they’re saying, ‘If you want to have a relationship with the NBA, that may not be the price, but you have to pay for the data’” (“The Happy Hour,” NBC Sports Bay Area, 7/31).

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