With sports betting becoming legalized in many states following a Supreme Court decision in May, the major sports organizations in the US want to get in on the action. While the NCAA has distanced itself from the topic, many colleges across the country are looking to obtain integrity fees.
What are integrity fees?
In what was a momentous decision, sports betting was legalized following a Supreme Court decision in May 2018. Most of the major sports organizations in the nation, such as the NBA, NFL, MLB, NCAA, and PGA Tour, had actively lobbied against legalization.
They believed that allowing sports betting would lead to problems of integrity, with their events possibly being tampered with by officials, players, or other parties to gain financially through betting.
There was also the concern from these organizations that the gambling companies accepting sports wagers would be able to benefit financially from the intellectual property of their players without the players receiving any compensation.
The money received through these integrity fees would most likely go toward monitoring betting activity and establishing policies to maintain the integrity of the sport.
This is what led to the NBA, NFL, and other organizations calling for integrity fees to be included in state legislation whenever sports betting was approved. The fee would give those organizations their own piece of the sports betting pie.
Five states have already legalized sports betting, but none has included integrity fees in its legislation. The state of New York debated the possibility of an integrity fee, which would see 0.2% of every wager going towards the league on which the money was being wagered. However, ultimately sports betting in New York has not come near fruition yet.
Other states had talked about the idea of an integrity fee but struck the idea down.
What colleges want these fees?
College sport appears to be particularly vulnerable to having its integrity affected by legalized sports betting.
Participants on a college level do not get paid, although the NCAA and its member colleges make a lot of money. The fear is that players will turn to betting and game tampering to reward themselves financially. However, with billions of dollars wagered illegally on sports events each year in the United States, there has always been the opportunity there for players to engage in this type of activity if they wished to do so.
There will be extensive checks and balances in place when sports betting is legal, so it would be extremely hard to avoid suspicions being raised if illegal bets were noticed.
The NCAA has distanced itself from integrity fees, saying that it does not wish to pursue this issue, while saying that individual colleges are free to pursue integrity fees if they wish.
Talking about this issue, the senior vice president and CFO of the NCAA, Kathleen McNeely said: “We will not be going after any gambling revenue. We know it will cost money to monitor, but [association president] Mark Emmert has been pretty firm in saying he doesn’t think it’s appropriate for the NCAA to try to access that revenue.”
Now it is reported that many high-profile colleges are considering pursuing integrity fees for themselves. If only a handful started, it would inevitably lead to a large number of other colleges deciding to follow suit.
Two of the schools that have so far outlined their likely intent to pursue integrity fees are the University of Pittsburgh and Penn State. They have indicated that they most likely will lobby for these fees to “cover the cost of enhanced educational and compliance efforts.”
While sports betting has just been legalized in Pennsylvania, the president of Penn State, Eric Barron, is calling on the Pennsylvania Gaming Board to give the school time to “initiate and strengthen our policies and procedures related to sports wagering in order to educate, train, and protect our students, student-athletes, coaches, and staff members, as well as preserving the integrity of our colleges and universities and their associated athletic programs.”
He went on to propose that the state, for the time being, should copy the model implemented in New Jersey, which prevents betting on any event that involves a state school, no matter where the event takes place.
With everyone looking for a slice of the action, gambling companies will see their sports betting profits further eroded.
