Despite their initial opposition to the legalization of sports betting in the US, the NBA and MLB are now looking for their own slice of the pie
Sports betting legalization
In what was a momentous occasion, sports betting has now been made legal in the US after a Supreme Court decision on the matter. There had been a lot of opposition to this decision, including by major sports organizations such as the NFL, MLB, NBA, NHL, and the NCAA.
Concerns were rife that the move would jeopardize the integrity of these sports. However, with the market for illegal sports betting in the US estimated to be worth $150bn (£112bn) annually, there clearly were ways in which players and staff of organizations could have engaged in sports betting in the past, albeit illegally.
This decision by the Supreme Court means that each individual state can decide whether or not they wish to legalize sports betting in their jurisdiction. It is expected that the majority of states will allow it due to the significant sums of tax revenue that will be up for grabs.
Delaware became the first state to take advantage of this legalization, with three casinos in the state opening up sports betting services on June 5, 2018. In the first 24 hours, the betting public wagered $322,135 (£240,000).
In the coming weeks and months, more and more states will be following suit. There will also be a scramble from gambling companies across the world to get in on the action.
How are sports affected?
Sporting organizations, of course, were concerned about what the legalization of sports betting would mean for their staff and players. In particular, there were concerns that college players would engage in illicit betting activities through match-fixing and the like as they are currently not paid for their efforts.
Certain states are considering not allowing sports betting on college sports, focusing instead on professional sports.
Despite fighting against the legalization of sports betting for many years, the National Basketball Association and Major League Baseball, in particular, are now trying to take advantage of this ruling in any way possible.
They seem to have anticipated this ruling and have been positioning themselves over the last few months to move quickly once the decision had been made. They have been involved with lobbying in multiple states to have an influence on the structure of sports betting legalization.
They are in favor of ‘integrity fees’ which would see them receiving 1% of every bet placed on a given event in their organization. They say this money will go towards ensuring no match-fixing takes place. This is why they are working closely with lobbyists to get these fees brought in as part of new sports the betting laws state by state.
A lot of money will flood into sports betting, so it is only natural that the NBA and MLB want their cut. This is why they are pushing so hard with state legislatures.
More than integrity fees?
These leagues are looking for more than just integrity fees. They also want influence over what kinds of bets will be allowed. They want to control the players’ stats, scores, and similar data that will be used by sportsbooks.
While there has been some backlash, the NBA’s senior vice president, Dan Spillane, justified these fees when appearing at a meeting with the gambling committee at the state Senate in Albany, New York. He talked about how there is now a lot more obligation thrust upon the league in areas such as “compliance and enforcement, including bet monitoring, investigations and education”.
Adam Silver, the NBA Commissioner, believes that integrity fees are justified as a “royalty” for their “intellectual property”.
As the league spends nearly $7.5bn (£6.35bn) annually running the NBA, they don’t think casinos and betting operators should be able to earn copious amounts of money without paying some form of compensation.
Other interested parties are now joining the NBA and MLB in their efforts to obtain integrity fees. The Professional Golfers’ Association (PGA) and the Lead1 Association which is a representative of athletic directors in 129 different colleges are also now calling for these fees to be introduced.
Having said all this, these leagues still face a big challenge to getting what they want. There is a lot of strong opposition, particularly in states such as New Jersey, where the gambling sector wields a lot of political clout.