A PGA exec walks into a New Jersey assembly meeting and says, “The only way that a bet can be properly settled or a line could be properly set is with the use of real official data.”
No, it’s not a joke. Those were the words of Andy Levinson, senior vice president of tournament administration at the PGA. His sterling quote came before the New Jersey Assembly Tourism, Gaming, and the Arts.
His comments came in the context of a meeting in which he and execs from other leagues had a chance to voice their opinions about a sports legislation bill that was eventually signed by Gov. Phil Murphy on June 11.
Levinson’s hardliner approach to official data won him a cameo in a promo video from USSportsIntegrity.com, a site devoted to pushing for official data. Genius Sports, a purveyor of official data, created the site.
You’ve got to give Levinson some respect for lobbing a quote like that with such confidence when you knew that the committee before him, including staunch gambling supporter Assy. Ralph Caputo, was most likely suppressing titanic waves of laughter (or vitriol) during the monologue.
Levinson’s argument is based on two major ideas.
- First, that there is so much data to be collected in PGA tournaments (144 players, four days, 100 acres walked) that a set system of data collection needs to be put in place.
- Second, without official data, there’s a risk of sportsbooks providing information that is outdated or skewed and intended to undermine the ability of a gambler to make a sound bet.
And it’s not just the gamblers who are at risk, either, Levinson said.
“If illicit interests attempt to exploit betting markets that are not based on real-time data then we are all at risk, whether it’s the leagues, whether it’s the state, the regulators or the operators,” he said.
Despite the presence of this very clear and present danger, the committee seemed unmoved and willing to pass a sports-betting bill that did not include a requirement that sportsbooks use official data.
Perhaps they didn’t fully understand the moral wasteland that lay ahead, in which unscrupulous sportsbooks would provide misleading information, leaving bettors to fend for sound data in a post-apocalypse world.
“This bill does not protect in any way the consumer who’s placing those bets because they have no assurance that the information that’s being used to settle those wagers is actually the official score or the official information,” Levinson pointed out.
After Levinson painted a morose picture of a world without official data, he closed with a plea.
“We sincerely hope that you will consider the protections for consumers and integrity of the games we discussed here today,” he said.
The Assembly sounded ready to wrap up but provided former Mets and Blue Jays pitcher Al Leiter a few minutes to speak on behalf of baseball players.
Is Levinson Crazy?
The motivations behind Levinson’s striking comment aren’t known; only conjecture can produce some scenarios.
- First, official data means that leagues will have to pay for that data and, in order to compensate for those payments, leagues would need some sort of integrity fee to cover the expenses.
- Second, the PGA is truly concerned about protecting their reputation among those betting on their tournaments. Bettors could lose interest if they think the game is rigged, a rigging, Levinson would say, that’s directly the result of unregulated data that sportsbooks provide their bettors.
Other leagues would argue that player’s integrity could be compromised by the appeal of all types of various bets. A golfer who’s out of the running on the final day may be inclined to alter the outcome of his or her final round in order to make more money than he’d earn in prize money.
While there’s probably sincerity in the argument for preserving the integrity of the game, you’d be hard-pressed to believe that other unseen factors aren’t at play.
Caputo Hammers MLB, sets stern tone
Before Levinson went before the committee, MLB rep Bryan Seeley spoke on behalf of the leagues, asking the committee to stop the bill and rework it to include an integrity that would provide the funds the league needs to run its integrity operations.
Caputo would have none of it. His righteous rant against Seeley and the MLB is essentially the seminal battle cry of integrity fee opposition, the furor of which blankets official data, too.
“Why do you think you’re entitled to an integrity fee,” Caputo asked Seeley. “Give me a reason why the state of New Jersey who … your organization fought for eight years or so and tried to kill us from doing something that we had a constitutional right to do — which the US Supreme Court says we’re right — tell me why you’re entitled to an integrity fee? What gives you the right to ask for an integrity fee other than your desire to get additional revenue?”
Legal sports betting will go live in New Jersey on June 14.
Orrin Hatch, your sports are safe.
Last week, the famed conservative senator from Utah penned an absurd op-ed for Sports Illustrated sounding the proverbial alarm over the dangers that legalized sports betting present to the realm of fair competition.
“Unlike those who have downplayed the risks of gambling in athletics, we recognize that unfettered sports betting is not a harmless activity but an existential threat to the games we know and love. At stake here is not just a couple hundred dollars in your office betting pool but the very reputation of sports.”
Hatch and others would lead you to believe that the emergence of legal sports betting will increase the likelihood that point-shaving scandals, broken kneecaps and conflict-of-interest betting will flourish like thieves coming out of their enclaves to converge on a pile of money in the street.
His argument stokes the fears of those who worry that sports betting is a dagger to the vital organs of fair play. Ironically, though, the senator started his piece by highlighting major betting scandals that rocked the country in a time when … wait for it … the illegal gambling market’s revenue far outweighed the legal industries in Nevada, Oregon, Montana and Delaware.
Looking back on history reveals that the American sports world prior to the Supreme Court of the United States’ recent decision was rife with shadiness perpetuated by mobsters and back-alley bookies. Here are few of the major scandals over the past 150 years*:
The 1877 Louisville Grays and the 1919 Chicago White Sox scandals
Both of these teams allegedly took payments from illegal gambling bosses in exchange for losing games. Until the Black Sox, the Grays were the notorious franchise, having endured a scandal in which four players took money to lose games. Those four players received lifetime bans.
More than 40 years later, the infamous “Black Sox” scandal emerged, in which eight players were accused of tanking the World Series in exchange for payments. While none of the eight were ever convicted in a court of law, all of them were banned from the game for life, a very Roger-Goodell move long before Goodell endured draft-night boos.
Contextually speaking, this type of wholesale scandal may never occur again because of two factors: the White Sox owner underpaid his players and the league prohibited players from moving to other teams if they refused to sign a contract with their current team.
Disgruntled, underpaid players who were chained to a team they hated had an opportunity to make what is assumed to be a large chunk of money and they took it.
While it’s hard to understand exactly how much the going rate would be for throwing a World Series in a post-PASPA, today’s MLB players would be hard-pressed to take money on the side when their contracts are already substantial.
1961 and 1978-79 NCAA men’s basketball scandals
One could argue that the NCAA is the most vulnerable to altered results simply because the players are not paid and we live in a time when cries for player compensation are as loud as they’ve ever been.
College basketball teams have fallen prey to a pair of bookie-backed game-throwing. In 1961, it was discovered that 22 different colleges were involved in game-fixing. Seventeen years later, the infamous Boston College scandal broke.
It was revealed that underworld ruffians with mob connections convinced members of the Boston College men’s basketball team to fix games so the Golden Eagles wouldn’t cover the spread. The infamous scandal became the subject of an ESPN 30 for 30 episode titled, “Playing for the Mob.”
2005-2008 Tim Donaghy NBA scandal
Donaghy’s dealings with an old high school friend and said friend’s boss turned out to be the worst game-fixing scandal in NBA history.
Basically, Donaghy passed inside information along to bookies and was paid $2,000 when the right team won.
After the scandal broke, research was done on the games in which Donaghy refereed and there were marked differences in the winning team’s scoring, as well as several instances in which a big jump in the betting line happened just before the game.
Donaghy spent 13 months in jail for his indiscretions and has been quite vocal since his sentencing. He provided this prophetic quote about the legalization of sports betting to the U.S. version of The Guardian in May 2015:
“I think if they do that it’s going to be watched more closely. I think that they’re going to have a better grip on it, and people are going to concentrate more on what’s going on on the floor to make sure things aren’t happening. And it’s something where the NBA needs to take advantage of this extra revenue that can be generated because behind the scenes gambling is a billion dollar a year business. So, in order to get money for extra contracts or for extra revenue, they’re going to take advantage of it.”
The bottom line: legalized, regulated gambling more likely to reduce game-fixing
If that sounds like a common-sense statement, that’s because it is. Legal sportsbooks will most likely refrain from hiring low-level henchmen to badger referees and players to throw games.
At this point, players in the major professional sports leagues (NBA, NFL, NHL, MLB) earn enough money to where the cost-benefit ratio throwing a game will dissuade them from engaging in match-fixing.
The weak point may be the referees, whose salaries are far less than the players. And considering that NBA ref salaries start out at around $150,000, low-level earners would be, in theory, the most susceptible to game-fixing.
Spread that $150K salary out over 82 games and you’re looking at less than $2,000 a game. Donaghy’s $2,000 payoff, when adjusted for inflation, is around $2,400 in today’s game. An extra $2,400 a game for a rookie NBA referee is an attractive (non-taxed) proposition.
Legendary Major League Baseball umpire Joe West said he fears that legalized sports betting will result in goons breaking the legs of non-compliant players.
What he doesn’t realize is that illegal sportsbooks have been operating across the country to the tune of billions of dollars a year and no player has yet to get an iron pipe to the legs for stealing second when he should’ve stayed at first.
In theory, any possibility of a mob shakedown of players or umpires should decrease over time as regulated, legal sports betting replaces illegal markets. How long that process of pushing out the dirty water with the clean water, though, is up for debate.
Illegal betting will decline but not disappear
Estimates of the size of the illegal sports betting market put it, most often, around $150 billion, although there’s no way to know for certain what that number is.
This past year, the Las Vegas Review-Journal published that Nevada sportsbooks took a total handle of $4.8 billion in bets.
Right now, those back-alley bookies have a serious advantage over Nevada, whose handle is about 3% of the illegal market.
However, that disparity will start to change over the next few years. Gaming consultant and former casino exec Bob Ambrose said that he sees a significant shift taking place over the next three years.
“Is the illegal sports betting market totally going to disappear in 12 months? I don’t think so. It’s going to take time. There’s no way to officially track it in terms of money spent in illegal betting operations. If you were able to track it from today to three years from now you’re going to see a marked difference”
Exactly how long it takes for legal betting to garner a bigger handle than illegal betting has a lot to do with how quickly states adopt sports betting, Ambrose pointed out.
But, even then, it’s no guarantee that states with legal sports betting will choke out illegal betting, said Greg Gemignani, an attorney with Dickinson Wright who specializes in casino law.
Legal sports betting’s success as it relates to illegal sports betting will most likely be based on fees, options, friction and guaranteed payouts.
Taxation: Illegal books have the advantage
States who choose to levy heavy taxes on sports betting may not get the influx of sportsbooks they’d hoped because high tax rates may de-incentivize business owners.
Margins for sportsbooks are thin — Las Vegas sits at about 4.52% — and big taxes like the 36 percent Pennsylvania has imposed cut into those already fragile margins.
“It’s going to depend on the cost. What’s the price difference for betting legally and betting illegally? If you overtax it you are going to limit the ability for an operator to operate in your state,” he said.
Illegal bookies operate outside the law so there are no taxes; this significantly reduces overhead costs and could make them the smarter financial choice.
Betting variety: Illegal books have the advantage
As for choices, gamblers who are already involved in illegal sports betting may not switch over to legal simply because their bookie may provide them a wide variety of betting options whereas the state they’re in may limit their play to mobile devices or certain types of bets.
“Will states offer the same kinds of things as offshore or illegal products? Some people are talking about parlay, then single parlay and some just mobile. In those states, illegal operators will offer everything,” Gemignani said.
Onboarding: Illegal books have the advantage
As for friction, a state could lose bettors to illegal books if they make it too difficult to place a bet. In Las Vegas, sports bettors have to fill out an application and provide identification in order to place a bet.
Should other states adopt a more stringent onboarding process, this could keep certain gamblers away from casinos.
Guaranteed payouts: Legal books have the advantage
While illegal books have some very clear advantages that may keep them around long after sports betting is legalized in their state, there’s one advantage that legal books have that may very well be the crucial competitive edge: guaranteed payouts.
Gemignani said he often gets inquiries from people who can’t get their money from offshore books. And, if a local bookie overextends himself or herself and can’t cover your win, you’re out of luck.
“I get calls every month that people can’t get the amount of money out of their offshore they want. The bank won’t accept the transfer or the account is locked,” he said. “You won’t face any of that with a legal operator. The money is fluid. If you want to cash out, you can.”
For Ravens, Saints, and Thunder fans, making a legal bet on your teams may not happen for a long time.
Last month, lawmakers in Maryland, Louisiana and Oklahoma axed the sports betting sections of new gambling bills that would’ve gone into effect in the event that the Supreme Court of the United States decided in favor of New Jersey’s appeal that the states be allowed to create and enact sports betting legislation.
All three states are home to professional sports franchises but they’re on both ends of the political spectrum – Maryland the blue and Oklahoma/Louisiana the red.
The story in Oklahoma
Most bills that go through the legislative process start out in a committee, then head to the House and, finally, the Senate.
Gambling-related laws typically find favor in either the House or Senate, but since both bodies have to approve, they end up dead multiple times before they make it through. Once they get the approval of the House and Senate, they go to the governor’s desk.
Lawmakers in the Sooner state were happy to pass a gambling bill earlier this month that addressed a variety of gambling issues. However, an add-on piece of legislation that would’ve allowed sports betting pending the Supreme Court decision didn’t make it through.
There are many theories as to why sports betting died in this most recent attempt, particularly considering that a 10% tax would’ve applied to revenue, bringing in a decent stream of cash for the state.
- One major factor here is the state’s First Nation tribes; they don’t want to deal with competition that an influx of sportsbooks would bring.
- Another factor that could be at stake is the conservative nature of the state – sports betting is a little too ‘sinny’ for lawmakers’ stomachs.
That second possibility is less likely, mainly because those same lawmakers voted to expand gambling for casinos in the state.
What went down in Maryland
In Maryland, things were looking good for sports betting after the House passed the bill 124-14. Blowout wins like this are common and usually aren’t so decisive when the Senate votes. And, that was the case in the Old Line State.
The Senate chose not to vote on the bill before they closed up shop for the year, which means the next time a vote can take place is January 2019. By then, there’s a good chance that sports betting could be legal and functioning in multiple states.
Louisiana bill fails
On Tuesday, a bill to legalize sports betting in Louisiana parishes was shot down 6-3 by the Louisiana Senate Finance Committee. Several committee members expressed concerns about the negative effects of gambling expansion — even though a daily fantasy sports bill advanced through the Louisiana House on the same day. Senator Danny Martiny, the bill’s sponsor, worries that his state will fall behind neighboring states, potentially losing out on a lot of tourism.
“I’m not saying this is the cure all for everything but I’m telling you right now that we will lose customers and money if Mississippi and Arkansas have sports betting and we don’t,” Martiny said.
Mississippi already passed legislation to legalize sports betting if given authority by the U.S. Supreme Court. Arkansas passed daily fantasy sports legislation in 2017 but has not introduced a sports betting bill.
What this means for a post-PASPA world
There’s a perception out there that a SCOTUS decision in favor of New Jersey that repeals PASPA will unleash a 50-state cavalcade of sports-betting bill passages.
However, the recent failures of sports betting bills in these three states indicate that eradicating PASPA may not mean that every state allows sports betting.
In some states where tribal communities are home to the state’s only casinos, expanding sports betting could be seen as a threat and, therefore, reason to lobby against opening books off reservation land.
In other more conservative states like Utah, a conservative push could stymie bills and mire sports betting in endless cycles of committee meetings, House votes, and Senate shoot-downs.
While recent polling indicates that the American public is, for the first time in decades, supportive of sports gambling, things could be much more complex on a state-by-state basis.
If you haven’t heard about official data, you will.
USSportsIntegrity.com serves as a platform for arguing the importance of sports integrity and official data. The link between the two isn’t always intuitive, which is why a primer is needed about why the site exists and what it promotes.
In a nutshell, the website hopes that state legislatures will vote for the use of official data at every sportsbook. The league will work with the providers of that data to give bettors the most up-to-date information possible about games, players and trends.
The site points out a trio of outcomes from this process. “Outcomes” is somewhat negligible; the points are more about marketing than anything else:
- Revenues from betting can be invested in sports integrity
- Market becomes more consumer-friendly
- Illegal betting dies
The first point is relatively legit; not so for points two and three. Data will be readily available through a slew of apps whose data will most likely be just as accurate as or identical to official data. As for illegal betting dying, that will have much more to do with the fall of the Professional and Amateur Sports Protection Act (PASPA) than any data.
Who runs the site?
The company behind the website is Genius Sports, the nation’s largest sports data provider. Why is this important? Because Genius Sports stands to gain the most from states passing laws that require official data.
Genius, as the premier official data provider in the country, will now have a customer base of states that will most likely be willing to hand over millions to pay for the official data contracts needed to launch sports betting within their borders.
While Genius offers a tremendous product, it’s hard to believe that they’ll be the only ones. Should sports betting become legal, there will be entrepreneurs across the country who will recognize the opportunity for big profit and will invest in agile, lean sports data startups.
How does official data make the game safer?
The website provides a series of six research, opinion and white papers that defend the company’s position on sports integrity.
If you’re a skeptic, you’ll see these documents as piles of marketing material Genius is using to get a huge payday once sports betting is legalized.
For those who are more forgiving, the material is a helpful way to understand Genius’ argument, which is as follows:
- Legit betting requires data
- That data needs to be as accurate as possible
The example the site uses is that an illegal sports book that isn’t using official data can con customers into making prop bets on games that have already finished.
It’s a tidy argument but it’s based on the concept that bettors can’t make a 100% solid decision if the data doesn’t come from a sanctioned data provider. Anyone with a smartphone can avoid dirty prop bets simply by checking the scores of a game on their phone.
The other side of the argument is that accurate data really does help bettors. You don’t want to put money on the outcome of an in-game event based on information that’s minutes old – one injury you don’t know about because of outdated data could cost bettors thousands of dollars.
Who endorses USSportsBetting.com?
At the time of publishing, the website featured a video that included monologues from an MLB and PGA rep. Both of those representatives indicated that official data was an important part of maintaining the integrity of professional sports.
Until last week, the players’ associations from the MLB, NBA, NFL and NHL had been silent about their position on sports betting. It was a curious position considering at least three of the leagues have expressed interest in raking in an integrity fee that would bring a 1% cut of all bets taken on each league’s games.
On April 12, the players’ associations broke that silence and they didn’t mince their words. Here is the players’ statement, which we’ll break down afterward:
“Given the pending Supreme Court decision regarding the Professional and Amateur Sports Protection Act (PAPSA), representatives of the MLBPA, NBPA, NFLPA and NHLPA have been working together on the legal, commercial, practical, and human consequences of allowing sports betting to become mainstream. The time has come to address not just who profits from sports gambling, but also the costs. Our unions have been discussing the potential impact of legalized gambling on players’ privacy and publicity rights, the integrity of our games and the volatility on our businesses. Betting on sports may become widely legal, but we cannot allow those who have lobbied the hardest for sports gambling to be the only ones controlling how it would be ushered into our businesses. The athletes must also have a seat at the table to ensure that players’ rights and the integrity of our games are protected.”
The associations have been working together
The odd silence coming from the players’ unions was, in fact, an aberration. Associations from the MLB, NBA, NFL and NHL were in talks with each other, according to this statement. They’ve been going back and forth about the “legal, commercial, practical and human consequences of allowing sports betting to become mainstream.”
The legal and commercial part we get. They’ve got to understand how state sports betting laws will affect game wagers. They also need to be well-versed in how each state’s legislation and gaming divisions enforce laws about age and location restrictions.
Practically speaking, they need to be clear on exactly how bets are presented and made, how the money is processed and how it gets into the league’s pockets, provided the leagues work out a deal with states.
The human consequences are important too, but, our guess is that the focus is on the first two aspects of sports betting.
Discussions about the potential of legalized gambling
From a player’s perspective, their value and brand power go up when sports gambling is legalized. Bettors putting their money on the performance of individual players will be more interested in players that outside of their local market or not a part of their favorite team.
The players also need to be concerned about (legal) wild swings in fortunes as the result of their games, as well as the possibility of players being on the take and throwing games.
These are legit concerns but the heart of their argument goes beyond these issues.
Unions don’t want leagues, casinos getting all the benefits
The final part of their statement takes aim at, most likely, the league and casinos who stand to benefit the most from legal sports betting.
As they have in past negotiations with their leagues, players want a seat at the table when it comes to formulating agreements between states, leagues and the casinos.
Their demand isn’t misguided, either. In March, an anonymous NFL exec was quoted as saying that the league should get a cut of wagers because they make the product on which people are placing bets.
The PGA Tour is betting on big data.
Over the past few weeks, they expressed their support of USsportsintegrity.com, a new website launched by sports-data behemoth Genius that would track all wagering from legal sports books around the country. The site features a video interview with PGA SVP or Tournament Administration Andy Levinson, who waxed dryly about sports betting and integrity.
“Integrity is a fundamental tenant in the game of golf. Our athletes call penalties on themselves,” he said with rather catatonic excitement. “If regulation would require more reporting and transparency from the gaming operators, then that would be a positive for all sports.”
Leagues say big data protects game
Levinson went on to say that big data is a tremendous resource for the PGA, announcers and the players themselves. Ball speed, drive apexes, greens-in-regulation, and a litany of other data points are the engine that dries player analysis, good commentary and, apparently, the integrity of the PGA as well as the MLB and NBA.
If you’re having a hard time understanding how good data relates to sports betting, you aren’t alone. The missing factor here is the belief that illegal sports books use unofficial data — data that could push bettors to place money based on data that just isn’t accurate. Crap in, crap out, basically, official-data proponents say.
What the leagues really mean: We get paid when you use our approved data providers
The NBA, MLB and PGA have expressed their desire to see official data worked into sports betting legislation on a state-by-state basis.
While USsportsintegrity.com makes the concept of official data seem warm and fuzzy, there are those who would argue it’s anything but.
- For example, their argument is partly based on the fact that gremlins of bad data run rampant through illegal betting economies. This isn’t exactly an airtight argument, as sports betting analysts have noted that the damage done by “unofficial” data among illegal sports books isn’t the problem that it is.
- Second, the call for legislating the use of official data is a roundabout way for the leagues making money. If your state legislator tells you that, as a sports book, you have to use data sources approved by the leagues whose games are generating handle, then you’ll be forced to choose, for example, Genius’s services.
Those services will come at a cost. You pay for the data, Genius makes money and, most likely, there will be a premium worked into that price that will go directly to the leagues.
What about the integrity fee?
The PGA hasn’t made an official statement on the integrity fee that the MLB and NBA are asking for – 1% of the total dollar amount of bets placed.
However, it would be hard to believe that the PGA wouldn’t ask for 1%; why settle for par when an eagle is within grasp, financially speaking?
The sports betting industry was probably smiling when the NFL allowed the Oakland Raiders to move to Las Vegas.
That grin is no doubt halfway to a scowl laden in bitterness and outrage after a choice quote from an anonymous NFL owner who told the Wall Street Journal that it’s just not fair that bettors make money off NFL sports betting without paying a cut to the league.
Here’s a direct quote of said owner, according to WSJ reporter Andrew Beaton: “Why would we let other people have all the benefit of something we’re creating?”
While the anonymous owner provided no specific percentage of what they’d want from the handle (amount bet) on NFL games, the NBA and MLB appeared before New York lawmakers to ask for 1% of the handle of any bets made on their games.
NFL’s Cheeky Response Smacks of Entitlement … and Good Sense
Let’s be clear, here. The NFL has not said that they want a cut of NFL betting handle. In fact, as recently as Dec. 2017, Commissioner Roger Goodell made it clear that the league wants to preserve its integrity, a refrain he’s repeated on multiple occasions.
There’s some debate about what “preserve its integrity” means — tight regulations, or a flat-out rejection of legalized sports betting? With a team moving to Las Vegas, the former seems to be the likely outcome.
This, of course, leads us to the anonymous owner’s comments. He thinks the NFL is entitled to a gambling cut because they are responsible for the very popularity that sports books (legal and illegal) leverage into absurd amounts of betting.
Now, as repulsive as that might seem – the NBA won no fans by proposing a 1% take – it also makes good business sense for the league; ask for 1% and a “No” is the worst outcome.
Asking for a Cut of the Handle Is More Complex Than You Think
It’s easy to reduce “asking for a cut” to a yes-or-no type discussion. However, the debate needs to be seen in the bigger picture.
First, the NFL probably isn’t going to ask all states at one time to surrender 1% of their gambling handle. Such an ask would be impossible at worst – it’s not guaranteed every state will allow sports betting – and lazy at best.
They’d have to knock on the door of every state legislature and ask for a few minutes before lawmakers to plead their case. And, says Michelle Minton, senior fellow at Competitive Enterprise Institute, there’s a good chance that only states with a considerable interest in NFL games will want to pay what amounts to, in her words, “rent”.
While Minton did not mention any specific states, a few come to mind: California (four teams at the time of publishing), Florida (three teams), Texas (two teams) and Pennsylvania (two teams).
Regardless of whether a state has an acute interest in currying favor with the league or not is beside the point, Minton said. In her opinion, no sports league should be given the power of taking a substantial integrity fee.
“It puts (the NFL) on an unequal footing for future regulation. They can strongarm (states) by saying, ‘Hey, we won’t let you take bets on games,” Minton said. “If (the league) has the power to decide which games the industry take bets on, they could, say, ‘We won’t let you ever take bets on any game.’ I don’t think that any entity should have that kind of power.”
A sports betting bill is making its way through the legislative channels this week in New York.
News broke Monday that a bill authored by Sen. Jon Bonacic and his aide (who spent a prodigious 150 hours working on the bill) made its way through the Senate Racings, Wagering and Gaming Committee (SRWGC) and will now move to the Senate Finance Committee. It’s all normal stuff for bills – committees first, then the gauntlet that is the House and Senate.
The truth is that what happens with this bill is not nearly as interesting as the massive dog-and-pony-show the NBA and MLB will put on as they try and convince lawmakers from Sacramento to Albany to give them a cut of all that’s bet on their games.
NBA and MLB ask for integrity fee
The two leagues have already revealed their greedy hand by showing up at a public hearing hosted by said SRWGC. At the meeting, they made it clear that, among other demands, they want a 1% cut of what’s gambled, something known as an integrity fee. Oh, and they also support a comprehensive sports betting bill.
Back-of-the-napkin math shows that the leagues stand to rake in $2 billion collectively from this ask should sports betting be legalized in most states. Now, states like New York aren’t going to care as much about this ask because any money brought in via sports betting tax revenue is new money.
Nevada probably hates the integrity fee
Nevada has a legit beef, though. They’ve been operating sports betting books, basically, since the government lowered their excise tax in 1975 from 10% to 2%. In 1985, that dropped down to 0.25%.
The last thing Vegas casinos want is a 1% take of their handle (dollar amount of best made), especially when the underdog wins, I don’t know, say, the Super Bowl and book revenues plummet as Zach Ertz stretches into the end zone in another Oh-my-god-is-that-a-catch-or-not moment.
A 1% cut would be more manageable; the “losses” will be much easier for Nevada books to handle.
Meanwhile, the Supreme Court doesn’t actually care about sports betting…
While all the talk of the SCOTUS decision about New Jersey’s sports betting appeal is about sports betting, the justices aren’t concerning themselves with what kind of money they can make from an 11 seed making it to the Final Four.
Their main concern is whether or not the Professional and Amateur Sports Protection Act (PASPA) is unconstitutional. When PASPA was passed in 1992 and implemented in 1993, Congress basically told states they didn’t have the right to decide their own sports gambling laws.
SCOTUS will decide if that act violated the anti-commandeering principle inherent in the 10th Amendment, which says Congress can’t pass a law that restricts state’s rights to create their own laws about non-essential matters like sports gambling.
Here’s how Dickinson Wright casino lawyer Greg Gemignani put it: “Congress can legislate that the sun rises in the West and sets in the East but that doesn’t mean it’s going to happen.”