So, What Is it That the Pro Leagues Really Want?By Jill R. Dorson | Published: May 30, 2018 at 4:00 pm
Just what do the major professional leagues want now that the Supreme Court has struck down the Professional and Amateur Sports Protection Act? It’s hard to say… every league released a statement on May 14, the day of the decision, but some have come back to clarify or walk back a bit their initial positions.
The NFL has since provided a “core” list of principles for legal sports betting regulation. Before the decision, the NFL was relatively mum about sports betting while the NBA and Major League Baseball deployed lobbyists across the country to push forward what they called an “integrity fee,” effectively a legislative mechanism to get sportsbooks and states to finance increased monitoring of sports betting activity and to protect their games, which the leagues have maintained will now be necessary.
An MLB official has since conceded that the funds would also serve as another source of revenue, with the fee being akin to a royalty. All of the major four U.S. leagues and the PGA Tour seem to have adjusted their expectations since the state of West Virginia passed a sports betting law that doesn’t include that fee, while lawmakers in other states have appeared flummoxed at the idea of paying to use statistics that the leagues are referring to as their “intellectual property.”
In an effort to understand who wants what, below is a look at what each of America’s pro leagues has said publicly, most recently, and what that may mean going forward.
On the day of the Supreme Court decision, the NFL clearly came down on the side of wanting Congress to draw up another law similar to PASPA, saying “Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events.
“Given that history, we intend to call on Congress again, this time to enact a core regulatory framework for legalized sports betting. “
A week later, the NFL released what it might call a wish list of standards for federal sports betting regulation. The key areas on the list are: consumer protections, access to “official, reliable” data, protection for the league’s intellectual property and content, and a bump in law enforcement agents tasked with monitoring sports wagering.
The takeaway: The NFL is not publicly in favor of legal sports betting and would probably be happy if Utah Sen. Orrin Hatch could shepherd through a bill conferring the NFL’s various preferred regulatory bullet points. Big picture, the NFL will become the second professional league to have a franchise in Las Vegas when the Raiders move there in 2020, so even if it doesn’t favor sports wagering, it knows it has to deal with the reality, and knows it’s very good for business. The NFL has been preparing for this inevitability and it’s a near-certainty that it is now privately lobbying other members of Congress for federal action that would benefit the league.
Commissioner Adam Silver has been the most vocal of all the pro leagues’ commissioners and has publicly said that he’s in favor of legalized sports wagering. On the day of the decision, Silver reiterated that protecting the integrity of the game is of paramount importance and unequivocally said that the league “favors a federal framework that would provide a uniform approach to sports gaming.” In the same breath, Silver also acknowledged the possibility of states regulating without the help of the federal government and said his league was in “ongoing” conversations with various states.
Expect the question of where the NBA stands to come again this week when the NBA Finals start Thursday in Oakland. Silver will likely be available to the media, and he customarily answers questions posed with candor.
The takeaway: Though it supports the idea of sports betting, the NBA will do everything it can to get a cut of the profits associated with it, even if it means making disingenuous representations to lawmakers at hearings.
Along with the NBA, Major League Baseball has taken the lead in pushing for an “integrity fee.” The leagues have gotten a fair amount of pushback on the fee from both lawmakers and gaming operators. And when the Supreme Court ruled, MLB didn’t back down, saying in its statement that “we will continue to seek the proper protections for our sport, in partnership with other professional sports. Our most important priority is protecting the integrity of our games.”
Commissioner Rob Manfred was even clearer a week later, when he spoke with reporters at a business gathering in New York City.
“We spend the money to produce the product. Gambling, sports betting operations are free riding on that product. It’s our intellectual property at the end of the day,” he was quoted as saying in SportTechie.com. “Even worse, they’re presenting a threat to the integrity of that product that will require us to spend money in order to protect that integrity. I just think it’s important to keep those fundamentals in mind.”
A frequent face at state hearings on sports betting, MLB executive Bryan Seeley, Senior Vice President and Deputy General Counsel of Investigations, Compliance and Security, has now unequivocally shown the league’s stance that a fee on operators would produce revenue, and not exclusively for “integrity” purposes. Seeley told The Athletic on May 22:
“Obviously our framework is different from other leagues that have salary caps and a dedicated [percentage] of revenue. Our players and union have fought against that system. But I believe that in general players get about half of the revenue we bring in,” Seeley said. “And so the revenue we’d bring in from the fee would be revenue like any other revenue. And we haven’t talked about exactly where it would go internally. Obviously, some of that fee is designed to cover our costs that I talked about. But we acknowledge that the fee is going to be more than our costs, so that revenue would go to our clubs just like any other revenue would.”
The takeaway: Manfred wants to make sure his league is compensated for sports betting on MLB games. And, based on prior lobbying efforts, MLB will work hard to get there.
Immediately following the Supreme Court decision, the NHL released a statement that said a whole lot of nothing, other than that it would review the decision and see how it impacts that league.
Then on Monday night, before Game 1 of the Stanley Cup Finals, commissioner Gary Bettman gave a more refined answer to the question of what legal sports betting looks like to the NHL.
Bettman clearly wants his league to get a piece of the action, but rather than using the much-maligned “integrity fee” language, he referred to games as “intellectual property” for which the NHL should be compensated. How? He’s not there yet.
On other issues, Bettman said he’d like to see some sort of uniform guidelines, but is open those coming either from the federal government or the states – in the event that multiple states can agree on a single set of rules. Bettman also isn’t in any hurry to give away proprietary league data.
The takeaway: As the first pro league to put a team in Las Vegas, the NHL has likely already started to put in some additional measures to protect its product. It has also recognized by virtue of the franchise location and a Disney-movie in-the-making first season by the Golden Knights, the reality that sports wagering is (a) good for business and (b) not a pernicious integrity threat that the other leagues often represent.
Of all of the commissioners of the major sports leagues, Bettman appears to be the only one who is still watching and waiting. But don’t underestimate him – Bettman probably has a plan and a wish list, he just doesn’t want to upstage the Stanley Cup Finals.
Content to let the four bigger pro leagues shake big sticks, Major League Soccer has had very little to say publicly about sports betting. On the day of the Supreme Court decision, the league released the following statement:
“Although Major League Soccer is supportive of today’s Supreme Court decision, we also believe that it is critical that state legislatures and other regulatory bodies work closely with the professional sports leagues in the United States to develop a regulatory framework to protect the integrity of each of our respective sports. We look forward to being a part of that process.”
The takeaway: As the youngest and least powerful of all of the professional leagues, MLS appears to be sitting back and letting the big boys beat the drum.
Players Unions Joint Statement
On the day of the Supreme Court decision, the players’ unions of the NFL, NBA, MLB and NHL released a joint statement essentially saying that the players want a “seat at the table.”
From the statement: “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 unions did not address who they felt should build the framework – Congress or individual states – nor did they address many of the issues that the leagues themselves are concerned about, including integrity or the distribution of data.
The takeaway: If there’s more money to be had, the players want in on the action. But their needs and wants are very different from the leagues they play for.