Who Is Entitled to Getting a Cut of Sports Betting?
One year after the US Supreme Court cleared the way for legalized gambling, the US sports industry is still in pivot mode as betting spreads in fits and starts. The major leagues, which had long fought sports betting, have won sponsorships from gaming companies such as MGM Resorts and Caesars but have had only limited success in other efforts to cash in.
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Seven states have legalized sports gambling since the May 2018 ruling cleared away restrictions outside of Nevada and several others are actively debating bills. The prospects for federal legislation anytime soon are considered dim.
“We’re probably in the third inning of a nine-inning game,” Bryan Seeley, deputy general counsel of Major League Baseball, told AFP on the sidelines of this month’s Leaders sports summit.
Leagues are bullish on the capacity of betting to boost fan excitement, Seeley said, adding that “anything we can do to increase fan engagement is good for our sport and good for our bottom line.”
But Seeley said leagues are not promoting gambling at full force in many cases, in part because state laws have not provided leagues with “integrity fees,” a share of gaming revenues.
“There’s no incentive for us to drive the sports betting market in certain states when there are laws there that both don’t give us any financial incentive, but also create integrity issues by not providing a transparent market,” Seeley said.
Online Sports Betting
Photo: MGN
With little success on that front, leagues are trying to monetize league statistics, which are expected to be especially important given the importance of online betting.
“Official data is a commercial product and we do expect to be compensated for the usage for it,” said Scott Kaufman-Ross, senior vice president at the National Basketball Association.
New Jersey casinos have seen $1.4 billion in sports bets thus far in 2019, with more than 80 percent online. As more states legalize, the trend in New Jersey is expected to hold.
The nature of betting is also changing from the traditional model practiced in Nevada focused on the outcome of a game and the margin of victory, or spread.
Leagues are eyeing the vast potential of in-play betting on items such as how many strikeouts a pitcher makes, how many points a basketball star scores, or the number of American football interceptions.
Such a system could enable a customer to place multiple bets throughout the course of a game or bet on several games at once. “In the NBA, people are as interested in how many points James Harden is going to score and how many triple doubles Russell Westbrook will have,” said Kaufman-Ross, who expects more product launches. “There will a lot of innovation a lot of product development that will create these new types of markets and products.”
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Much as with integrity fees, the leagues are meeting resistance on requirements to use official data, with Tennessee thus far being the only state to bless such a mandate. “I think it’s going to be surprising in any state where the big gaming infrastructure decides to give money away to the sports leagues,” said John Holden, a professor of management at Oklahoma State University.
But Holden said the leagues could still win out if television ratings are higher for sports teams in jurisdictions with legalized gambling.
“I would not be surprised at all if we see much higher television ratings for the major professional leagues in (these) states,” he said. “They may be striking out” on official data and integrity fees, “but when it comes time to renegotiate those television deals, that’s where they’re really going to see the benefit.”
