Leagues see state-by-state regulation
Top officials of Major League Baseball and the National Collegiate Athletic Association clarified their positions on so-called “integrity fees” in connection with legal sports betting in separate forums last week.
MLB is one of the professional sports league which, along with the National Basketball Association, has lobbied for state sport-betting laws to include fees to each league in connection with wagers on their games. Some call them “integrity fees” to cover purported extra costs of maintaining the integrity of the games in the face of expanded sports wagering. Others call it a “royalty” on the “intellectual property” of the games themselves. Opponents call it a simple money grab by already-rich leagues.
MLB Commissioner Rob Manfred explained his position last week on the Boomer and Gio sports talk radio program in New York, saying his primary goal in seeking a fee is to protect the integrity of baseball.
“Integrity monitoring is a really expensive undertaking,” Manfred said. “It’s very sophisticated. It involves the analysis of massive amounts of data in order to detect patterns in the betting that can be of concern.”
Manfred first said the league only wants a portion of sports wagers to cover those increased monitoring costs and not to make profits, but later showed his hand that he considers it a fair royalty. “I do not think it’s unreasonable to suggest that people who are free riding on our product should have to compensate us,” he said.
Current casino states that have enacted sports wagering are generally dead-set against paying royalty fees. For instance, New Jersey state Senate Speaker Stephen Sweeney said last month that the state will never approve such fees to the leagues. “The leagues are asking to be paid to allow games to be played fairly,” Sweeney wrote in a letter to governors of all 50 states last month.
Manfred said in the radio interview that MLB should not “rely on a bunch of state regulators to ensure the integrity of our sport,” although states have effectively regulated all forms of gaming for decades. “Quite frankly, I don’t believe they’ll be as good at it as we will be,” he said.
Meanwhile, a top NCAA official said the collegiate sports organization will not pursue sports betting integrity fees.
Speaking to a group of college athletic business administrators at the National Association of Collegiate Directors of Athletics’ annual convention, NCAA Senior Vice President and Chief Financial Officer Kathleen McNeely said that as long as sports-betting regulation is conducted on a state-by-state basis, individual schools should decide whether or not to pursue such fees from sports-betting operators.
(The NCAA and the NFL are advocating for federal regulation of sports betting.)
Some schools are already advocating for fees. Penn State President Eric Barron, in a letter to the state gaming board asking for a moratorium on wagers involving in-state college fees, suggested that his school may lobby for some type of integrity fee to pay for compliance hires and other sports betting-related expenses. The University of Pittsburgh has also floated the idea of an integrity fee.
McNeely said the NCAA national office “will not be going after any gambling revenue. We know it will cost money to monitor, but (NCAA President) Mark Emmert has been pretty firm in saying he doesn’t think it’s appropriate for the NCAA to try to access that revenue. Schools will need to look at their own values and decide.”
She added that since the NCAA remains opposed to legal sports betting, “it feels a little disingenuous to think about taking revenue” from that activity.
