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Volume 21 No. 30
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PGA Tour preps for sports betting

From The Players Championship, Ponte Vedra, Fla.

The PGA Tour is teeing up options for legalized sports betting, from fees it could charge to monitor the process, to safeguards on the type of bets that would be allowed.

 

For example, “It’s in the hole!” may be a favorite cry from the gallery. But the tour doesn’t want fans one day betting on potential “negative outcomes,” such as betting on whether a player will miss a putt or miss a fairway off the tee. Such bets, the tour believes, could be manipulated by players without major implications on a tournament outcome.

Like other sports properties, the tour is waiting for a U.S. Supreme Court decision that could legalize sports betting. While the tour may be a little late to the effort compared to the NBA or Major League Baseball, it is quickly making up for lost time.

“We joined the effort five or six weeks ago and what we are doing in preparation for a court ruling is trying to make sure our voice is heard in that process,” said Andy Levinson, PGA Tour senior vice president of tournament administration. Levinson, David Miller, vice president and assistant general counsel, and Len Brown, chief legal officer, lead the tour’s gambling business strategy.

The tour wants to prevent “negative outcome” wagers such as bets on missed putts.
Photo: getty images

It’s an effort that is accelerating after PGA Tour Commissioner Jay Monahan last month publicly threw his support behind the legalization of sports gambling while aligning with the NBA and MLB.

Levinson and Miller have been on the road over the past few weeks meeting with lawmakers in states considering gambling legislation, the most recent stops coming in Kentucky and West Virginia.

Tour executives also are in talks with companies for a licensing deal that would collect and distribute data to gambling operators as the tour looks to cash in the money generated should sports gambling become legal on a statewide basis.

Notes from Ponte Vedra

Next year’s Players Championship moves to March from May, posing a calendar crunch for tournament officials who began working on the 2019 event well before the start of this year’s event. The shift means that the tour’s marquee event will be held twice in 10 months in two different climates given that the North Florida weather in March can be far different than in May.

“We are losing three months in the planning cycle,” said Jared Rice, executive director of The Players Championship.

But as the event next year moves to the front of the PGA Tour schedule, Rice expects more companies to be willing to spend more dollars compared to a later schedule when corporate budgets already have been committed to other events.

“From a building perspective, it puts more stress on our operations team,” Rice said. “From a sale perspective, we are really focused on multiyear deals. We don’t have a lull. The sales cycle has shortened considerably.”

The tour this year put a new twist on the “Partner Connect” sponsorship summit it held at The Players Championship, adding a Women in Business panel created in collaboration with the tour’s Advancing Women in Leadership Employee Resource Group.

The session, held on May 10, included a panel discussion moderated by Alex Baldwin, vice president of corporate partnerships for the tour, and included Mandell Crawley, managing director and head of private wealth for Morgan Stanley; Leesa Eichberger, head of brand marketing and sponsorships for the Farmers Group; Laura Neal, senior vice president of communications for the tour; Molly Solomon, executive vice president and executive producer at the Golf Channel; and Annika Sorenstam, World Golf Hall of Fame member and former LPGA Tour player. Panel members were asked to share career paths and defining moments.

— John Lombardo

The tour has a deal with London-based Genius Sports to monitor wagering activity in countries where gambling already is legal. “We would engage someone like that in the U.S.,” Miller said.

Like the NBA, the tour proposes a 1 percent “integrity fee” on money wagered on golf, but executives say they are open to negotiation. 

“We are having discussions about that number,” Levinson said. “These are our competitions and we feel that if betting operators are going to be making hundreds of millions of dollars off it, then it is reasonable for us to ask for a small portion of that. What comes along with that is a significant ramping up of our investment in monitoring betting activity and engaging third parties in bet monitoring. That comes with an expense and we would use those funds to offset those expenses.”

The tour also wants legislation to allow for mobile and online wagering as part of any new statewide gambling laws.

“That’s a big one,” Levinson said. “Part of this effort is to eliminate the black market that is estimated to be $150 billion. Without the ability to bet online, the offshore betting operations will continue to exist.”

Along with the oversight, the tour sees the use of mobile and online gambling as a way to increase fan interest while dramatically boosting the amount of money wagered.

“We want mobile platforms to be fully enabled,” Miller said. “Brick and mortar is not realistic to engage fans.”

The tour also is pushing for legislation to include opt-out provisions on “negative outcome” wagers such as bets on missed putts or a player missing a green. Instead, the tour wants to allow real-time shot-tracking bets such as a putt made or green hit in regulation, and the more common wager such as which player will win an event.

While the tour has outlined specific areas it wants included in betting legislation, it does not have a specific figure on how much revenue legalized gambling could generate for the tour.

“There are so many variables throughout a golf tournament and the possibility for betting markets is enormous because of the nature of our sport,” Miller said. “For us, it is an opportunity for fan engagement. If it’s legal, regulated and safe, we see it as a tremendous opportunity.”