The NCAA is changing its tune, at least slightly, when it comes to sports betting. News broke last week that the organization will allow individuals, conferences, and teams to sell official data to sports betting operators.
Official data can be particularly useful to sports betting companies for live betting, as the faster a sportsbook receives the data, the more accurately and effectively it can offer bettors in-game spreads.
The recent NCAA news came in the form of a memo responding to the Mid-American Conference’s request for a rules interpretation. The MAC, which recently signed a deal with Genius Sports, wanted to know what information it could provide to the sports data and technology company in relation to sports wagering.
In the memo, the NCAA green-lights conferences’ ability to sell statistics to companies for sports wagering purposes. An NCAA spokesperson sent Sports Handle the full interpretation of the memo:
“The NCAA Division I Interpretations Committee determined the legislation precluding an individual, institution or conference from providing information for sports wagering purposes does not apply to competition statistics compiled by, or with the permission of, the institution, provided that information is available to the general public. As a result, it is permissible for an individual, institution or conference subject to the sports wagering activities legislation to provide such information to individuals or companies involved in or associated with sports wagering activities. It is not permissible to provide information that is not available to the general public.”
It's pretty stunning how quickly college sports is changing right now.
Emmert out, sports betting in, scholarship limits changing, new constitution, NIL, collectives, transfer portal, anti-trust lawsuits, state laws, lobbying congress, skyrocketing coach pay, conference realign https://t.co/XGmlGDkyaF
— Eben Novy-Williams (@novy_williams) April 28, 2022
Allowing official data to be sold to betting companies is a shift in philosophy, as NCAA President Mark Emmert in 2019 blasted sports betting and its potential impact.
“Sports wagering is going to have a dramatic impact on everything we do in college sports,” Emmert said. “It’s going to threaten the integrity of college sports in many ways unless we are willing to act boldly and strongly.”
The recent rule interpretation creates questions about the NCAA’s future relationship with sports betting.
Professional athletes compensated for data
Genius Sports reached a deal with the NFL last year to pay at least $120 million annually in exchange for exclusive rights to distribute official NFL data to sportsbooks. The NBA has a similar deal with Sportradar.
In 2018, the NCAA agreed to a 10-year data collection and distribution deal with Genius Sports, but Genius Sports told ESPN at the time that the deal didn’t include betting rights.
With the NCAA’s shift, conferences could realistically sell official data to companies like Genius Sports for millions of dollars, opening up a new revenue stream for those involved in college athletics. It also raises the question: What do the athletes get for their official statistics being sold to betting companies?
The big issue with this announcement: do conferences and schools have the right to sell the athletes’ data without compensating them for it?
NBA, NFL teams have to pay a set percentage of team/league revenue to the players. So revenue from data deals goes to the athletes. https://t.co/NZ0KHvkQ1O
— Mit Winter (@WinterSportsLaw) April 28, 2022
“It would be interesting to see some current or recent college athletes form a company themselves to collect this information and resell it,” Marc Edelman, professor of law at Baruch College, Zicklin School of Business, told Sports Handle.
“In addition to that, because game statistics include players’ names, which reasonably could be seen as their identities, there remain some open issues as to whether an NCAA member college or a collection of colleges could really sell this data for commercial purposes without having a license to do so from the players. That too might open the door for some revenue-sharing negotiation between the players and either an individual school or an entire conference.”
Language in the NFL Players Association’s collective bargaining agreement clarifies that gambling-related sponsorship revenues are included as part of the NFLPA’s revenue-sharing agreement with the NFL. Licensed player data is included in that section of the CBA, ensuring players receive compensation for those deals.
Even if that NFL agreement wasn’t in place, Edelman believes NCAA athletes could still have a case to be compensated for the sale of their statistical data.
“One theoretically could attempt to make an argument that the players in professional sports leagues, based upon the salaries that they’re receiving, are engaging in a work-for-hire,” said Edelman, who has extensive experience working with sports, gaming, and antitrust legislation. “Whereas given that the college athletes are not financially compensated from their schools and are not unionized, it would seem very difficult — if not impossible — that the right to the resale of statistical information based upon the player somehow lies with the school or the conference.”
Legal questions could loom for universities
The NCAA’s decision opens up a revenue stream for universities, but it could also expose those schools to antitrust legal challenges. The debate about whether NCAA member schools can sell official data to sportsbook operators without compensating athletes may play out in the open — and potentially the courtroom — in coming months and years.
Legal battles over antitrust violations wouldn’t be uncharted territory for the NCAA. In a recent decision, the Supreme Court decided the NCAA couldn’t limit educational benefits for college athletes as part of their scholarships, something the NCAA previously said it did to maintain amateurism in college sports.
“The NCAA is not above the law,” Supreme Court Justice Brett Kavanaugh wrote in explaining the decision. “The NCAA couches its arguments for not paying student athletes in innocuous labels. But the labels cannot disguise the reality: The NCAA’s business model would be flatly illegal in almost any other industry in America. All of the restaurants in a region cannot come together to cut cooks’ wages on the theory that ‘customers prefer’ to eat food from low-paid cooks.”
Days after that decision, the NCAA adopted name, image, and likeness policies to allow student-athletes to benefit from their popularity. The NCAA deflected NIL responsibility, saying, “Individuals can engage in NIL activities that are consistent with the law of the state where the school is located. Colleges and universities may be a resource for state law questions.”
NIL policy gave athletes a chance to earn money from their stardom, but it came with minimal guidance from the NCAA, which instead passed the responsibility to state legislators.
The NCAA’s failure to create comprehensive NIL guidelines has created a pseudo form of free agency in college sports. Miami men’s basketball guard Nigel Pack recently transferred into the program, and it was announced shortly after that he had signed a two-year NIL contract with LifeWallet for $400,000 annually. The news was largely referred to as “pay-for-play” rather than a traditional NIL deal, and it prompted one of his new Miami teammates, Isaiah Wong, to demand his own increase in NIL money soon after.
*actual* NIL is, say, Iowa superstar Caitlin Clark becoming the spokesperson for a company.
(I am going to make sure I specify the differences in these arrangements moving forward myself.)
— Nicole Auerbach (@NicoleAuerbach) April 29, 2022
The University of Pittsburgh’s Jordan Addison, named college football’s top receiver last year, may transfer to USC for purposes of obtaining better NIL compensation in California, according to recent reports. It’s hard to fault the football star for wanting to maximize his earning potential at a higher-profile program with an offensive-minded head coach (Lincoln Riley) and a stellar projected starting quarterback (Caleb Williams), but it’s also fair to question the sustainability of a collegiate sporting model in which such moves occur.
What’s next for the NCAA?
Mark Emmert is stepping down as the NCAA’s president in 2023, leaving the organization searching for a new leader. There’s significant uncertainty about the NCAA’s future, as some have wondered if it effectively serves its purpose or if a different entity should gain regulatory control over collegiate sports.
When it comes to most issues impacting the NCAA, there are differences of opinion among universities. What makes sense for the future of college football likely looks different for Texas A&M than it does for Texas State.
“Herding cats is an easier process,” said Brendan Bussmann, a gaming consultant for B Global who worked in Nebraska’s football program from 1996-2003. “Not only does the NCAA have to figure out how to get the Alabamas and the Nebraskas and the USCs and the Texases of the world on the same page, it also has to get a Wisconsin-Whitewater, and it has to go get a Mount Union. Trying to figure out a happy medium — not just between football and basketball, but how does it play toward volleyball or swimming — it’s a challenge because you have a ton of stakeholders.”
Adding to the complications are state-by-state legal differences relating to NIL and sports betting. Some states, like Virginia, don’t allow bettors to wager on in-state schools through legal betting platforms, while plenty of other states allow such wagering.
Some schools, like Louisiana State University, even have sponsorship deals with sportsbooks. While LSU has a deal with Caesars, SEC peer Alabama resides in a state that doesn’t allow legal sports wagering.
It’s an uncertain landscape, and the NCAA often doesn’t act proactively, but rather does its best impression of a high school student putting off complicated math homework. While the NCAA procrastinates on the possibility of allowing athletes to be treated like employees, it leaves the conferences, schools, and players attempting to navigate the murky waters.
This paragraph gets to the heart of the matter. pic.twitter.com/GJnPz8CzqH
— Mit Winter (@WinterSportsLaw) April 29, 2022
“The NCAA is, to put it mildly, hypocritical as an association,” Edelman said. “On the one hand the NCAA purports to be this amateur entity that promotes student competition and sport, and on the other hand seeks to behave simultaneously like a highly commercialized professional sports league. Perhaps they feel a little bit stuck between a rock and a hard place, and they want it both ways.”
But with how NIL implementation is beginning to play out, the NCAA maybe can’t have it both ways. By not adapting to the modern landscape years ago, the organization is currently stuck in an uncomfortable middle ground, offering some financial freedom to players, while simultaneously placing athletes into newfound territory with little to no enforceable guidelines.
The result is a chaotic college sports landscape with an uncertain future, as questions surround how athletes, schools, and conferences will interact with sports betting companies moving forward. What does seem inevitable, though, is that if conferences sell official statistics and data to sports betting partners, athletes are likely going to want to see a cut of the money.
