The US Supreme Court ruling earlier this year not only paved the way for each state to regulate sports betting but it also raised the hackles of the major sports leagues (NFL, NBA, MLB, NHL and NCAA) who have long opposed regulation on the grounds that making something easier to bet on would increase the risks of match-fixing.
In some circumstances this might be a valid argument, but not given what we know of the US, the leagues and our experiences of sports betting around the world.
Sports betting in the US is not a new thing. Nevada has offered sports betting for as long as anyone can remember. This, together with the number of offshore operators targeting the US and cryptocurrency sportsbooks trading under a us domain, illegal back-street bookies and references to betting in shows as diverse as Frasier and Murder, She Wrote, all suggest that sports betting is, and always has been, going on outside Nevada too.
While the leagues may have integrity concerns about sports betting proper, they appear to have been more relaxed in the case of daily fantasy sports, in which the leagues have vested interests but which Nevada and others decided is effectively sports betting by another name.
A lack of regulated betting does not prevent integrity issues: in 2007 an NBA referee was caught betting on games he officiated in. There have also been shenanigans relating to the New Orleans Saints ‘pay to injure’ scheme (2009-1 1), which offered players incentives to injure players of opposing teams and, more recently, the New England Patriots deflating footballs to make them easier to throw and catch. Then there is Brian Tuohy’s book ‘The Fix Is In’, alleging that the NFL is rigged.
If this alone were not enough, experience in other parts of the world suggests that far from increasing match-fixing, if the recommendation of the Law Commission in India is any indicator, regulated betting would be the best way of tackling integrity issues, bringing to light an activity which is best protected when done in the dark or at a distance with illegal or overseas operators.
As Jay Kornegay, VP of race and sports superbook at the Westgate Las Vegas Resort and Casino, put it recently: “People aren’t going to want to bet on something that they don’t think is fair and true.” Fact is, it could be argued that without regulated operators some of the subtler forms of match- and spot-fixing would never have come to light, in which case maybe the leagues should be paying the operators for doing their job for them.
Finally, the play and the players: the status and earnings that go with being a professional league player dwarfs anything a match-fixer could offer; this, together with the statistics, analysis and punditry (both of the professional and armchair variety) only further dilutes the leagues’ argument.
So, if not integrity then what? What is this really about? In explaining his league’s position, NBA commissioner Adam Silver said quite clearly: “We’ll spend roughly $7.5 billion dollars creating NBA basketball this season. And to the extent that product is then used for casinos, betting parlours to make money on, we feel, just in the same way a musician that receives a royalty for the music that’s being played, we should receive some sort of royalty. So, call it a royalty, call it an integrity fee, we will have additional expenses and it’s ultimately our intellectual property, and we think we should be compensated for it.”
As Mr Silver says, call it an “integrity fee”, or if it’s about intellectual property rights then a data fee, something which reared its head in West Virginia, where the NBA, MLB and the PGA Tour pushed for the mandatory use of league-supplied data (at a cost) and also wanted a say into the types of wagers allowed in the state, and which caused West Virginia Gaming and Racing Association president John Cavacini to declaim as “nothing new. It’s the same language. It’s a money grab by major league sports.”
This analysis of the league’s position appeared to be reiterated during a panel debate at G2E where MLB executive vice president Kenny Gersh suggested that the integrity fee should be called a ‘royalty’ and that leagues had already lowered their request to 0.25% of betting revenues from their starting point of 1%.
It seems that most legislators have seen through the integrity fee argument and rejected it. That does not mean that the fight is over, however. The leagues could get what they want in other ways, for example by changing where they hold events and favouring those states and stakeholders which support them. Remember that the NCAA allegedly persuaded Oregon to stop parlay sports betting in 2007 by prohibiting the state from hosting championship basketball games, following in the steps of the NBA, which did the same.
According to a number of estimates, the four major sports leagues are already going to benefit financially from regulated sports betting — from a modest $4.2 billion a year between them to an estimated $14.8 billion annually for the NFL alone — indirectly through increased fan engagement, TV advertising spend, sponsorship, merchandising and data and picture rights.
On top of this are the prospective (very lucrative) partnership deals such as the one between the NBA and MGM Resorts as its official betting/gaming partner, which in turn raises the issue of ‘poacher and gamekeeper’ and begs the question: just how much and exactly what action would the leagues be willing to take in the name of integrity, when that same action would have a direct impact on their own bottom lines?
All of this means only one thing: if the whole debate is about money, then the question becomes how far will the leagues go to secure the ‘compensation’ they feel is their due?
In this context the question of integrity is no longer about sports betting and match-fixing. It is one about the integrity of the sports leagues themselves.
Christina Thakor-Rankin is principal consultant at 1710 Gaming, working with start-up, evolving and established operators internationally, regulators and industry groups. Her work covers all aspects of the gaming and gambling cycle, from initial research, licence and operational go-live, to new markets and opportunities, consumer engagement and experience. Christina’s 20-plus years of industry experience includes management roles at William Hill, Blue Square, Tote (Sport) and Virgin Games.