Major Sports Leagues and Sportsbooks Settle Differences

Friends watching sports on TV at bar

In an interesting twist, several leading major sports leagues and sports betting operators are joining forces.

The PGA Tour, MLB, and the NBA are teaming up with FanDuel, Draft Kings, and MGM Resorts, hoping to combine their powers to get approval for their interests in Washington, DC.

The district is currently debating a sports betting legalization bill and the two groups, who have in the past had bitter battles, are lobbying together to get the bill passed.

Previous differences

For many years, the major sports leagues in the United States and sports betting operators have been fighting one another. The acrimony resulted mainly from the 1992 federal ban on sports betting. The operators were constantly pushing for an end to this ban while the major sports leagues were fighting to keep the ban in place.

Eventually, the federal ban was brought to an end by a Supreme Court ruling in May. The sports leagues had to admit defeat on the issue and sportsbooks set about creating their offerings.

There is still tension between the two groups about certain facets of sports betting. One of these is the issue of integrity fees, which the NBA, MLB, and PGA Tour, in particular, have been pushing for.

An integrity fee would be a slice of every sports wager that is placed on one of their events. Of course, such a fee would significantly decrease the sports betting operator’s margins.

Both groups have been lobbying hard on a state by state level to push their own agenda on this issue. No state has yet included a provision for integrity fees in its sports betting legislation.

Sports betting in Washington, DC

The Washington, DC, Council has been debating the idea of sports betting legalization for some time now. Council member Jack Evans first proposed legalization in the Sports Wagering Lottery Amendment Act of 2018.

This bill, which includes a 10% tax on gross revenue from sports betting operations, has won a lot of support in the district. Supporters are particularly keen to have this bill passed sooner rather than later. This is because neighboring states have yet to open their sportsbooks, so it poses a lucrative opportunity for them by leveraging their first mover advantage.

There was a provision for an integrity fee of sorts for in the original version of the bill. However, this provision was removed during council debates. The leading operator for sports betting in the district would be the Office of Lottery. However, third parties could have their own operations in partnership with local venues. The district’s major sports teams are keen for these types of partnerships.

MGM Resorts has reportedly made such a deal with Nats Park and potentially the Capital One Arena. There is very little opposition to this bill, and the mayor supports it. A final vote is expected on December 18.

Sports leagues and operators partnership

The main problem these two groups have is that the DC Council could give a monopoly on sports betting to Intralot, the district’s lottery provider. There are no casinos in the district, so the DC Lottery will be in charge of sports betting, at least at the outset.

Many are concerned that the lottery provider will choose to offer sports betting exclusively, which would generate vast sums of revenue. The lobbying alliance was organized mainly to lobby for a competitive market.

Both groups will benefit from such competition. The sportsbooks, of course, will get to offer sports betting themselves and the sports leagues will have a broader range of operators to sell advertising money and official league data to.

This alliance is focusing on preventing the lottery provider from holding a monopoly on sports betting. With the international gambling space largely moving away from the monopoly model, it would be a step backward for Washington, DC, was to establish its own monopoly on sports betting.