Posted on July 31, 2018, by Travis Pulver
When the Supreme Court lifted the federal ban on sports gambling, they didn’t necessarily make it legal. They just made it so states could decide for themselves if they wanted to make it legal or not. Since doing so will result in another revenue stream governments can tap into, why not? But state and local governments are not the only ones that can cash in.
The various professional sports leagues can as well— and it appears that the NBA is going to be the first.
According to ESPN’s Darren Rovell and David Purdum, the NBA has become the first professional sports league based primarily in the U.S. to sign an official gambling sponsor—MGM.
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NBA commissioner Adam Silver made the announcement Tuesday afternoon:
“As the landscape for sports betting in the U.S. continues to evolve at a rapid pace, MGM Resorts is a proven gaming leader for us to work with on this groundbreaking partnership. Our collaboration will result in the best possible gaming and entertainment experience for consumers through the use of accurate, real-time NBA and WNBA data, and our collective efforts to maintain and enhance the integrity of our games.”
The deal is for three years and more than $25 million. But what does the deal mean as far as gamblers are concerned? MGM will get to use “league highlights, names, logos and its direct data feed, as well as exclusively market itself as the official gaming partner of the NBA and WNBA.”
Silver has been more open to the concept of legalized gambling on sports than the other commissioners. But like them, Silver wants an integrity fee included in laws passed that legalize sports gambling.
The fee is small, .2 to 1.0 percent, and supposedly to help the league police itself. But Silver has also referred to it as something the NBA is entitled to; a royalty:
“…we also think we are due a royalty. And that if the intellectual property that is created by this league — and I know all the leagues support this position, but in the case of the NBA, we will spend roughly $7.5 billion creating NBA basketball this season.”
The fee has been referred to by one lawmaker in New Jersey as extortion. Did the leagues need to be paid to play honest games now that gambling had been made legal? Does that mean they were not honest before?
However, at the same time, Silver has a point. The casinos are going to profit off events that they have no responsibility in producing. If the NBA spends $7.5 billion on a season, the NFL and MLB likely spend at least that much. If casinos are going to profit off the product the leagues pay to produce, the casinos should have to pay some sort of fee.
Bars pay higher fees for pay-per-view broadcast. Maybe casinos should have to do something similar in reference to taking bets on games.
According to Purdum and Rovell, there was a fee worked into the NBA’s deal with MGM. But it is not known how much. However, Silver did say that the amount is not based on a percentage of whatever is wagered.