Players Unions Stake Claim for Cut of Sports Betting Pie Now, TooBy Brett Smiley | Published: April 12, 2018 at 12:37 pm
A little over two years ago, the NFL, NBA, NHL and Major League Baseball players’ unions began formal meetings to discuss the possibility of expanded legal sports betting in the U.S., as MMQB.com’s Albert Breer reported in June 2017.
An awful lot has happened in the ensuing 10 months, namely the United States Supreme Court taking New Jersey’s case that might allow legal sports wagering far beyond Nevada, and the NBA’s and MLB’s preparations for a possible defeat in that case, which has led to their expansive lobbying effort across the U.S. regarding sports betting legislation.
In joint statement on Thursday, the four unions formally announced their desire for a “seat at the table” in the conversation. Or to be realistic, their desire for a clearly defined piece of the pie.
Key phrase in new MLPBA, NBPA, NFLPA & NHLPA joint statement on sports betting is "publicity rights." Story TK. pic.twitter.com/loRoluHT2V
— Ryan M. Rodenberg (@SportsLawProf) April 12, 2018
In Joint Statement, Major U.S. Pro Sports League Players’ Unions Say They Want ‘Seat at the Table’ Regarding Sports Betting
“Yes, the sports unions have been discussing the issue, in particular around the integrity of our respective games,” NFLPA executive George Atallah told Breer last June. “We’re collaborating on it. We might be open to changes that are coming because of (legalized sports gambling), but before we get to the revenue aspect of it, do we have the infrastructure in place to prevent any sort of shenanigans? That’s the issue.”
Indeed there is concern about shenanigans, or players not getting involved in any gambling or game-fixing schemes, a problem that the NBA (or any major professional U.S. league) has faced since 2007 when former NBA referee Tim Donaghy got mixed up with the mob and ended up in federal prison. (Just this week Donaghy was touting the benefits of a legal, regulated environment.)
Obviously this is about money and the players’ claim to a stake in whatever revenues the leagues may derive from a world in which sports betting is out of the shadows and legal in many of the states eager to legalize wagering — should New Jersey prevail in having the federal ban on sports wagering, the Professional and Amateur Sports Protection Act (PASPA), repealed in the case Murphy v NCAA. A decision is coming before the end of June, possibly on April 30.
“There needs to be a way for those of us, the players and the owners who create this game, to enjoy some of that revenue,” said NBA Player’s Association Executive Director Michele Roberts in an interview with ESPN’s Dan Le Batard in March. “We haven’t yet aligned ourselves to the extent we are, but I certainly don’t disagree that’s a conversation worth pursuing.”
“It’s a conversation that may be difficult, but one we’ll have and I suspect we’ll walk away fairly satisfied with what we’ll come up with.”
Where the Leagues Themselves Are At
The NBA, MLB and now the PGA Tour have locked arms in their lobbying effort, pushing for, among other things, a direct off-the-top 1 percent cut of all wagers. That would amount to roughly 20-25% of a typical sportsbook’s revenue. Some lawmakers have been receptive to their “betting right and integrity fee” claim based on a misunderstanding of intellectual property law, but so far no legislation has passed a law that would grant the leagues that. The leagues are also looking to monopolize the sale of data to sportsbooks, which has rightfully infuriated some sportsbook operators because the leagues could price gouge. Also, monopoly.
The leagues have acknowledged that sports betting is good for television ratings and and broadcast partnerships. It is good engagement in a multitude of ways. Bottom line is that it’s good for the bottom line in that regard. And if revenues increase (they would), the players would benefit because their percentage of revenue for salaries would increase. (Note: I am not a collective-bargaining agreement expert.)
But at this juncture, obviously the players want to engage the leagues and probably lawmakers, about how, exactly, they could claim their share of direct revenue that may come. SportsHandle contributor and sports law guru Ryan Rodenberg flagged “publicity rights” in that statement. Such rights are codified in some states. For example, in New York, where New York Yankees legend Yogi Berra once settled a case against TBS over their a Sex and the City ad saying “Yogasm” means sex with Yogi Berra. With the publicity rights mention they are signaling a claim, perhaps, to proposition wagers that specifically reference players and their performances. The point is, there’s room for interpretation in these laws and we know in at least one case involving MLB and fantasy sports in 2007, the league lost on a publicity rights claim.
While the players may focus on publicity rights, the leagues are fixed on an intellectual property argument to try to control sportsbook data and to get the “betting right” fee in general.
“The sports leagues and players unions are both free to seek a share of the revenue generated by sports gambling, but neither has a strong legal claim that they have any intellectual property rights to license in this instance,” said sports, gaming and intellectual property attorney Marc Edelman, also a professor of law at Zicklin School of Business. “The U.S. Court of Appeals for the Second Circuit held in NBA v. Motorola that a sports league has no exclusive rights over independently gathered statistical information.”
“Meanwhile, the U.S. Court of Appeals for the Eighth Circuit held in CBC v. MLBAM that the First Amendment trumps the right of publicity when using players’ names and statistics in an online fantasy sports game,” he continued. “Although it is possible that different circuits would resolve these issues differently, I think reversal of either case — and especially NBA v Motorola — is quite dubious.”
The NBPA Executive Committee includes some respected, vocal leaders such as President Chris Paul and First Vice President LeBron James, so perhaps we will soon hear from them on this issue.
There is still a lot of uncertainty with how all the active legislation, potential new partnerships between leagues, and sports wagering entities will shake out. But there are lots and lots of possibilities. Just yesterday the Arena Football League and Vegas Sports and Information announced a deal.
Of course, we don’t have a decision in the Supreme Court case yet. But all stakeholders recognize that legal sports betting in the U.S. is now inevitable. Sports wagering is leaving the shadows and shaking the stigma that PASPA baked into U.S. culture, and the rush for a cut just expanded by one more party.