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NBA Finals: Business As Usual For Vegas Books Despite Dire Warnings From Sportradar

Non-Authorized Gaming Operators of the NBA still receive league's in-game feed for Game 1

Matt Rybaltowski by Matt Rybaltowski
May 31, 2019
in Industry
Raptors forward Kawhi Leonard (2) handles the ball against Golden State Warriors guard Klay Thompson (11) during the first quarter in game one of the 2019 NBA Finals at Scotiabank Arena ( John E. Sokolowski-USA TODAY Sports)

Raptors forward Kawhi Leonard (2) handles the ball against Golden State Warriors guard Klay Thompson (11) during the first quarter in game one of the 2019 NBA Finals at Scotiabank Arena ( John E. Sokolowski-USA TODAY Sports)

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As the NBA Finals kicked off Thursday night in Toronto, the latest chapter of the league’s ongoing data conflict with Las Vegas sportsbook operators continued to unfold in real time.

Several minutes elapsed in the Toronto Raptors eventual 118-109 win over the Golden State Warriors when an executive from a prominent Sin City book, who spoke on the condition of anonymity, told Sports Handle that the property did not experience any issues with an official NBA data feed Betradar provided by third-party distributor Sportradar Solutions, LLC. Heading into Thursday’s Game 1 of the Finals, there was some uncertainty among books throughout Sin City whether they would lose the in-game feed for the highly anticipated contest – the first-ever Finals in NBA history held on Canadian soil.

The concerns arose after the Minneapolis-based subsidiary of Sportradar AG issued a terse 180-word letter days earlier indicating a potential shutoff. The memorandum, dated May 23, stated that “only Authorized Gaming Operators” (AGOs) of the NBA are eligible to receive the league’s official data feed for use in U.S. jurisdictions where sports betting is legal and regulated.” So far, those AGOs include MGM, FanDuel and The Stars Group.

In the letter, Sportradar passed long notice that authorized distributors of NBA official data must discontinue providing official data to sportsbooks that were not Authorized Gaming Operators as of 11:59 PM ET on May 28.

News of the request was first reported by ESPN’s David Purdum last week.

Sportradar, an NBA data distributor, sent a letter to sportsbooks today, informing them it "must cease providing NBA Official Data for use in the United States unless and until you are an Authorized Gaming Operator of the NBA." Deadline is 11:59 p.m. ET, May 28.

— David Payne Purdum (@DavidPurdum) May 24, 2019

What does it mean to be an AGO?

To become an Authorized Gaming Operator, the outfit must execute a deal with the NBA (and Major League Baseball) that’s separate from an agreement with an authorized data provider, in which the bookmaker is making some sort of payment to the league; both leagues are seeking either an off-the-top cut of betting handle on their games, or a flat fee, or perhaps some combination. MGM is paying a reported $25 million for three years to the NBA to be an authorized gaming operator. Although the deal gives MGM non-exclusive rights to official betting data, the agreement made the company the league’s exclusive gambling partner for marketing purposes.

The NBA is close to finalizing a number of others deals with companies to become Authorized Gaming Operators of the league, according to a source. Those companies will still be able to use NBA official data during the Finals, the source indicated.

Since the beginning of the NBA Playoffs, Sports Handle has examined the commercial conflict between two North American professional sports leagues and their data partners with a host of major legal U.S. sportsbooks. As state legislatures nationwide decide whether to require statutory mandates for official league data, stakeholders have felt enormous pressure to advance their positions on data pricing. In recent weeks, the topic sparked an intense debate at a gaming conference in Boston.

How books handled in-play wagering for Game 1

May 30, 2019; Toronto, Ontario, CAN; Toronto Raptors forward Pascal Siakam (43) shoots the ball against the Golden State Warriors: (Gregory Shamus/Pool Photo via USA TODAY Sports)

Despite the uncertainty from Sportradar’s written advisory, the books benefited from a somewhat light evening when other sports were factored into the equation. Had the request been made early in the NBA regular season, sportsbook operators likely would have encountered a hectic schedule with more than one hundred college and professional contests in football and basketball alone on a given Saturday. Many books, even the larger ones in Las Vegas, do not have enough manpower to handle such a high volume on in-play offerings.

But for major standalone events such as the NBA Finals, the sportsbooks come prepared with a strategy for dealing with the rapid fluctuations that are common on in-game markets. As such, top sportsbooks that subscribe to a data package distributed by third-party providers like Sportradar, Genius Sports and Perform Group tend to use their own trading teams to set in-play lines for the most popular games on the sports calendar. One book downplayed last week’s request since it had already booked NBA playoff games manually during the 2019 postseason, in addition to receiving the Sportradar option.

“If the feed was shut off, we would’ve just gone with the manual offering,” one sportsbook executive told Sports Handle. “It would’ve been business as usual for us.”

Another company with multiple sportsbook properties in Las Vegas did not require Sportradar’s feed to book Thursday’s game. As the company traded the game manually, its traders plugged in the numbers at each timeout, an executive explained. There were nine full timeouts in Thursday night’s game providing books with ample opportunity to adjust their in-game lines.

“We were able to manage it by simply referencing the market on screen and deciding on a number,” he said.

Representatives for two other companies with sportsbook operations in Las Vegas did not reply to Sports Handle’s requests in time for this story.

The role of Information Service License operators

As an operator of an Information Service License in Nevada, the state’s Gaming Control Board (GCB) authorizes the licensee to sell and provide information to a sports betting pool in order to assist the companies in booking various wagers. Stadium Technology Group, a privately held software company, is also authorized through the license to provide advice to sports betting pools in predicting the outcome of a sports event. The annual license fee costs approximately $6,000 a year, according to GCB regulations.

The Las Vegas-headquartered company maintains partnerships with nearly a dozen Las Vegas casino companies, including Caesars Entertainment, Wynn Las Vegas, Westgate Las Vegas, as well as Boyd Gaming and Station Casinos, which both operate several local properties. Stadium is also an affiliate of MGM Resorts International, an S&P 500 global entertainment company, that became the NBA’s first official gaming partner last July.

“As part of our multi-year agreement as the official gaming partner of the NBA, we have the privilege of receiving official NBA data,” an MGM spokesperson wrote in an e-mail to Sports Handle. “We’re pleased that our affiliates, which include Stadium Technology Group, are provided with that data during the NBA Finals and beyond.”

Stadium Technology’s Stadium Live product ingests a feed from a third-party provider, in this case one distributed by Sportradar, and can transmit it to multiple operators. The technology also has the ability to convert raw probabilities into U.S. line standards, a critical feature for sportsbooks that receive in-game feeds from European-based companies. Based on the commercial relationships, there are indications that it could be challenging for a third-party distributor to cut off the signal for a non-authorized operator without disrupting the feed for multiple books that partner with a software company such as Stadium.

What’s next for the Finals

It is unclear if sportsbook operators that have yet to become Authorized Gaming Operators of the NBA will receive the league’s official feed for the remainder of the Finals. It appears that those engaged in negotiations with the NBA, however many that is, will have continued access.

Meanwhile, NBA Commissioner Adam Silver still appears bullish on sports betting. Speaking to WFAN 660 AM’s Mike Francesa on Wednesday, Silver advocated for a new federal framework on sports gambling.

Still, from a direct revenue standpoint Silver believes that the benefits the NBA will receive from gambling could be smaller than many anticipate.

“To the extent that we sell official data to sports betting organizations or receive some sort of royalty for intellectual property, it will be significant – but not all that material to our business,” Silver said.

Over the last year, the NBA has reiterated that it has been fully transparent in their communications with gaming operators on the timing of a so-called grace period for use of its official league data by non-authorized operators. The league referred to comments made earlier this month by Scott Kaufman-Ross, the NBA’s senior vice president, head of fantasy and gaming, to further illustrate its position.

“We provided a season-long grace period for other betting operators to have access to official NBA data while we discussed partnership terms. While that period is ending — something distributors and operators have known since the start of the season — we remain committed to securing additional sports betting partnerships,” Kaufman-Ross said in the statement.

Game 2 is scheduled for Sunday night in Toronto. The Raptors are up 1-0 in the series, and for now, the Sportradar feed is still live, despite the warning.

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Matt Rybaltowski

Matt Rybaltowski

Matt is a veteran writer with a specific focus on the emerging sports gambling market. During Matt's two decade career in journalism, he has written for the New York Times, Forbes, The Guardian, Reuters and CBSSports.com among others. In his spare time, Matt is an avid reader, a weekend tennis player and a frequent embarrassment to the sport of running. Contact Matt at matt@usbets.com.

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