The National Basketball Association (NBA) has unveiled its approach to sports betting for 2019.
This U-turn may come as a surprise to many. The NBA traditionally has been very much against the legalization of sports betting. The league joined the NFL, NBA, NCAA, and MLB in filing a lawsuit to try and prevent the federal ban on sports betting from being lifted.
Ultimately, those efforts were in vain. Therefore, the NBA has decided to embrace the sector and make the most of it.
Dan Spillane, the NBA’s senior vice president for governance and policy, has revealed the league’s plans. He outlines how the NBA will deal with public legislation and private agreements.
The league has already signed a deal with MGM Resorts that makes the casino group its official gaming partner. Under the agreement, MGM will receive perks such as official league data that others do not have access to.
MGM Resorts will help the NBA with monitoring and integrity policies. There is still a focus on introducing a license for purchasing official league data, as well as the introduction of integrity fees.
It certainly will be an interesting year for the NBA, and many of the other major sports leagues will be watching closely to see how their plans come to fruition.
The push for integrity fees
Most US professional sports leagues have pushed for integrity fees since the federal ban was ended in May 2018. They have been lobbying hard in states where sports betting legalization has been on the table. To date, no state has included a provision for such a fee in its final legislation
The integrity fee would be levied on every single sports wager placed on a league event. This money would be used to help protect the integrity of the sport and ensure that proper monitoring processes are in place to prevent the likes of match-fixing.
The main leagues pushing for the integrity fee were the NBA, MLB, and the PGA Tour. While none of the six states to legalize sports betting so far have included any integrity fees, there have been indications that other states might be considering doing so. One of these states is New York, which had been debating a sports betting bill before the 2018 legislative session ended.
The NCAA is entirely against the introduction of an integrity fee. The association issued its own thoughts on sports betting in October. The commissioner of the NHL, Gary Bettman, also is against this idea. He outlined those views as he unveiled the league’s new contract with MGM.
The MLB and NBA were asking for a 1% integrity fee on gross revenues, which would equate to about 20% of profits. This, of course, is a massive slice of the pie and would likely be a disincentive for operators getting involved in the space. The leagues have now looked at this rate again and decided to lower their proposal to a 0.25% fee.
One of the main points against their proposal for integrity fees was what the operators would be getting in return for these fees. While the leagues were saying that sports betting legalization means higher costs for them, they already have a deal in place with Sportradar to monitor global betting markets on behalf of the league.
They have been trying to portray themselves as being the victims in the legalization debate. They claim that their intellectual property is being used inappropriately because the operators are not paying the leagues for using official league data.
Talking about his views on the topic, Spillane said: “If we have a sports-betting scandal, then that is an existential threat to our business.” He believes that disgruntled bettor will take out their anger on the league rather than the casino operator if things are not going their way or some sort of controversy arises.
NBA and its commercial deals
The NBA’s agreement with MGM shows the appetite the league has for cementing partnerships in the gambling space. If sports betting is going to be offered, the league might as well benefit somewhat from it. More private deals will be made in 2019 and beyond.
The league will continue to partner with parties that fit into their vision and will help to safeguard the league’s integrity. It is likely that some sort of league data licenses will be introduced in 2019. Whether it is through integrity fees or data licenses, the NBA will be getting paid in 2019 and beyond.