Helling: MLB Sign-Stealing Suggests It Should Be The One Paying ‘Integrity Fees’

Written By Derek Helling on November 18, 2019

None of the states with legal sports betting have required legal sportsbooks to pay a royalty to Major League Baseball. MLB hasn’t abandoned the idea, however.

The recent expansion of its internal investigation into sign-stealing suggests it may be time to give it up, however. The argument didn’t hold much water before the events of this past week, and that’s even more the case now.

Why MLB sign-stealing is a big deal right now

An article by Evan Drellich and Ken Rosenthal, of The Athletic, last week laid out how teams like the Houston Astros steal signs. Sign-stealing is when teammates give batters insight into which pitch is coming based on signs between opposing catchers and pitchers.

The activity has been ongoing, while lobbyists for MLB have spoken to legislators in many states. Those lobbyists wax eloquent about how legal sports betting represents a threat to the integrity of MLB’s product.

The solution, they argue, is the states mandating that sportsbooks pay a royalty to leagues like MLB. That money will cover additional costs the leagues incur because of activity like attempts to fix games.

MLB isn’t the only professional sports league advocating for that. The NBA and PGA are still hoping they can get cut in on that deal as well.

They have failed largely because they haven’t provided answers to the question of exactly how they would use the money. None of the sportsbooks have voluntarily paid such royalties yet either.

Now with one of the league’s worst-kept secrets in the open, that lack of specificity fits perfectly. If MLB was truly blind to sign-stealing, it’s also clueless about how to use the money to guard against such issues.

Why it’s a bigger problem for legal sportsbooks than MLB

The problem goes deeper, however. It’s the sportsbooks that actually stand to lose the most when things aren’t as they should be.

Legal sportsbooks have a strong reputation for refunding bets compromised by integrity issues. A recent example of this is PointsBet refunding moneyline and spread wagers on the 2019 NFC Championship game because of a blown call.

While industry analysts might explain it away as one of the risks of being in the sports betting business and the cost of customer retention, it becomes more complicated when leagues demand money to protect something they haven’t shown the ability to guard themselves.

In order for MLB’s ask to hold water, it has to sell the idea that it’s a pure, sanctimonious utopia of merit-based competition, that sports betting is the vilest Pandora’s box to ever slither from the depths of Hades and that the only shield for MLB’s innocent product against inevitable ruin is forcing legal sportsbooks to fork over part of their revenues.

Every time a trash can has been banged on to relay a changeup is coming, that same fist has punched a hole in MLB’s argument, however. Instead of the sportsbooks writing a check to MLB, states should force MLB to cover the losses of legal sportsbooks when they have to refund bets based on the league’s failures.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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