If there was any doubt about the strong, yet mixed opinions the sports industry has about the rising presence of legalized gambling, Calgary Flames president of hockey operations Brian Burke put that to rest just minutes into the 2015 IMG World Congress of Sports.
“We want to be real careful here,” Burke said, speaking on the opening panel of the event, held last week at the JW Marriott at L.A. Live in downtown Los Angeles. “We don’t sell heroin at our games, and this, to me, is right on the edge of that. … But this is not a hypothetical. It plays global in terms of fixing matches in soccer. It’s happened in our lifetime in NCAA basketball. It’s not a hypothetical, folks. It scares me.”
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The Calgary Flames’ Brian Burke: “We don’t sell heroin at our games, and this, to me, is right on the edge of that.”
Photo by: TONY FLOREZ PHOTOGRAPHY
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Burke’s comments spotlight the internal struggle many executives within the industry have with the prospect of increased gambling around U.S. sports. Already commonplace in many parts of Europe and Asia, nationwide sports betting in the U.S. has become a hot-button topic, particularly since NBA Commissioner Adam Silver last fall openly called for a uniform federal framework to allow for every state to participate.
Under current statutes, only four states — Nevada, Delaware, Montana and Oregon — can regulate sports betting, and of that group only Las Vegas has a meaningful presence. The theory, according to Silver and others like him, is that sunlight represents the best disinfectant and that federal legalization would regulate an often-hidden activity, as well as generate new revenue for leagues and teams.
“Our view is that legal sports betting is out there. It’s happening,” said Mark Tatum, Silver’s deputy commissioner at the NBA. “There’s hundreds of billions of dollars that are bet, and we think there should be some nationally regulated guidelines that govern the issue, because right now, it’s living in the shadows.”
The sports gambling debate arrives at a key time for the industry. As each property figures out how to attract younger fans, it is gambling that represents a popular activity among the 18-34 demographic and a key tool for engagement. But betting also has a deeply troubled past within sports, highlighted by episodes such as the 1919 Black Sox scandal, several point-shaving scandals in college basketball during the prior century, and Pete Rose’s ongoing banishment from baseball.
Further complicating the gambling debate is the meteoric rise of daily fantasy sports, and the rapid embrace of it by pro sports teams and leagues. Daily fantasy is classified as a game of skill and thus is exempt from federal laws governing online gaming. But given how openly daily fantasy companies advertise the opportunity to win large sums of money — a major DraftKings promotion last week offered a $1 million top prize for a contest connected to the Masters — the perceived distinction can get blurry.
“We have a point of view to not be associated with gambling,” said Dawn Hudson, NFL chief marketing officer and executive vice president. The NFL has allowed teams to align with daily fantasy companies but has not taken a formal position itself in the space.
Major League Baseball, conversely, just extended its equity position in DraftKings, and Commissioner Rob Manfred said he sees a clear line between games such as those and gambling.
“I kind of see that in a different category,” Manfred said of daily fantasy. “DraftKings is fantasy — it’s not gambling. I think there is a clear legal line, and quite frankly, we’ve spent some considerable effort and money to make sure we knew where DraftKings is in relation to that line, and we’re very comfortable with the idea that it’s fantasy.”
While baseball this season rolls out its expanded relationship with DraftKings, Manfred also is beginning a process to hear Pete Rose’s formal application for reinstatement to baseball. Rose in 1989 agreed to a lifetime suspension from the game after being found to have violated Rule 21 of the Major League Baseball rules for betting on baseball while serving as on-field personnel.
“I think it’s important to begin with the fundamentals when you talk about gambling,” Manfred said. “We are always going to have Rule 21. That’s always going to be the case. The question comes when you realize there’s been a massive change in terms of the legalization of gambling in the United States. What you should do with respect to off-field issues, sponsorship, ownership in teams and so forth. What I’ve said publicly is there’s been enough change in the regulatory environment that it’s important for me to have a dialogue with the owners about where they want to be in that space.”
