Leagues Push For Sports Betting Role, With Or Without Fees

SAN DIEGO — The battles behind so-called integrity fees may be winding down in the developing U.S. sports betting market, but the nation’s top sports leagues are not backing down from their role in shaping the multi-billion-dollar industry.

NCAA, MLB and NFL representatives told a conference of lawmakers and gambling industry stakeholders on Friday that the leagues should have an active role in the expansion of U.S. sports betting. Stressing gambling’s pressures on athletes as well as the need for collaborative oversight and regulation, league officials reiterated their need for a leading role in regulated gambling a year-and-a-half after the Supreme Court decision that permitted single-game wagering outside Nevada.

Along with the concerns for athletes, panelists unanimously stressed the need for the leagues, which unlike the current structure of state-level laws have the capacity for nationwide precautions, to be involved in any gambling policy.

“As a sports league, our primary focus is to protect the integrity of our games, but also the need to protect the integrity of sports and monitoring from corrupt influences,” said Marquest Meeks, MLB’s senior counsel for sports betting and investigations. “As a sports league, we not only have the unique perspective, but also unique tools and recourses.”

Naimia Stevenson Starks, NCAA vice president of hearing operations, touted her group’s increasing collaborations with the FBI and other law enforcement agencies to assure integrity of competition and protections for student athletes. NFL Players Association staff counsel Joe Briggs talked about wide-ranging NFL procedures, including plans for dealing with confrontational bettors and security measures for biometric data.

Noticeably, they largely avoided discussing integrity or data fees, major contention points between leagues and operators in the first 18 months of the state-by-state expansion of American sports betting.

Integrity Fees, Data Fees Take Back Seat

Unlike previous meetings of the National Council of Legislators from Gaming States (NCLGS), the league representatives largely avoided pitches for integrity or data fees. Integrity fees, league-backed efforts to mandate states with sports betting legislate a certain portion of operator winnings go back to the leagues, have failed in all 21 jurisdictions that are taking bets now or have passed laws to do so.

Lawmakers and operators largely dismissed the need for direct compensation back to the leagues in the guise of integrity fees. Nevada had taken sports bets for decades before the Supreme Court decision, and an estimated $150 billion was wagered illegally in the U.S. each year before the ban was struck down. Elected officials and gaming interests noted the leagues had survived despite this.

With integrity fees dead in most statehouses, legislatively mandated data fees, where sports betting operators are required to compensate leagues for official league data used on bets such as player props, had become a priority for leagues, in recent years. But on Friday, data fees weren’t mentioned until near the end of a panel on leagues’ roles in sports betting, and only after it brought up during a question-and-answer session.

Meeks of MLB reiterated support for data fees as the only way to rectify the gambling outcomes of individual performances that can be difficult to quantify. A tee shot in golf, for example, would be impossible to measure without an official measurement, thus requiring a league representative to make a determination.

Several top sportsbooks, like the ones you find in New Jersey, have already struck deals with leagues, including the NBA, for player prop data. The controversy mostly surrounds legislative requirements to do so.

Just three states, Tennessee, Illinois and Michigan, have mandated data fees in their bills, but they are three of the more recent states to adopt legislation. At least a dozen states are set to consider sports betting bills in 2020. With most of these proposals still in their infancy, data fees remain a possibility for all of them.

Role Of Leagues Going Forward

Because lawmakers, who ultimately hold the fate of league fees, are largely averse, the leagues appear to be adjusting to a new reality heading in 2020.

Beyond a continuing need for collaboration, the leagues’ exact roles remain largely unknown in shaping sports betting policy, even from the perspective of the leagues themselves. Potential changes in state laws that could force the NCAA to compensate student athletes for their likeness could expand to expand to sports betting, Starks said, one of a multitude of major unknowns as the legal sports betting industry nears $20 billion in total handle since the May 2018 decision to strike down the federal ban.

Though leagues’ roles remain undetermined, it seems they will continue embracing legal gambling at arm’s length. Though the NBA and NHL have dipped their toes in gambling-centric broadcasts, the mainstream relationships between leagues and their media partners will continue to focus on the games themselves, not their betting ramifications.

Meeks said he wouldn’t envision a policy where leagues would review plays during games, such as a “garbage time” touchdown, that could have impact a point spread but would have no effect on the outcome itself.

But that too could change. Just two years ago, it seemed impossible to think leagues would even discuss gambling on their games, let alone seek to profit from it.

If there is one certainty, gambling will continue to generate billions of dollars annually. That money’s allocation between states, operators and leagues is still hard to discern, but it will be determined by their collaborations.

With direct compensation seemingly off the table, the leagues appear content to push for a role leading the multi-billion dollar industry.

“We’ve been very open about the fact that for the sports leagues, there’s also an economic goal,” Meeks said. “Just as operators are going to have the opportunity to make money and states are going to have an opportunity to generate tax revenue, for the sports leagues there are good economics for us as well. We want to see not just a transparent sports betting market, but a robust market.”