Another party was heard from last week when Major League Baseball produced a draft bill that may be considered in Missouri, which is in the early stages of considering legalization of sports betting. It’s the first solid evidence that MLB supports the legal sports wagering, but like the NBA, it comes with serious caveats.
Like the NBA proposal, the MLB draft includes a 1 percent integrity fee that would grab that percentage of the money wagered. Experts have pointed out that fee would take 20 percent of the potential sports betting profits from the companies that run the system. And it is before taxes and fees that any jurisdiction would charge. In Missouri the effective gaming tax is 21 percent. So when you include an integrity fee as proposed, the tax rate tops 40 percent.
But in addition, MLB wants to limit who can play. According to the draft, as published by LegalSportsReport.com, the following people would be prohibited from making bets:
2. Sports wagering operators shall employ commercially reasonable methods to:
(1) Prohibit the operator, directors, officers, owners, and employees of the operator, and any relative living in the same household as such persons, from placing bets with the operator;
(2) Prohibit athletes, coaches, referees, team owners, employees of a sports governing body or its member teams, and player and referee union personnel from wagering on any sporting event overseen by their sport’s governing body. In determining which persons are excluded from placing wagers under this subsection, operators shall use publicly available information and any lists of such persons that the sports governing body may provide to the commission;
(3) Prohibit any individual with access to non-public confidential information held by the operator from placing wagers with the operator;
(4) Prohibit persons from placing wagers as agents or proxies for others…
The draft neglects to outline who would pay for a system keeping these potential players out, but apparently the onus would be on the operator.
The MLB proposal would also allow the leagues to tell the operators that they could not offer bets on specific games. It would also require the operators to purchase data from only league-sanctioned suppliers. And the league could also demand to see betting information from individual bettors. While the operators would be responsible for the confidentiality of that information, the leagues would not.
Earlier in the week, MLB weighed in by opposing a bill to regulate sports betting in West Virginia,
MLB—the victim of the worst sports gambling scandal in history with the fixed 1919 World Series—issued a statement to West Virginia’s MetroNews Radio opposing a bill in the state legislature to regulate sports betting, saying the bill lacks adequate protection to the integrity of baseball.
“Any sports betting legislation must include clear, robust, enforceable protections to mitigate any possible risks to our game,” the MLB statement said. “The law quickly advancing in West Virginia unfortunately falls short of meeting those critical standards. We are hopeful the legislature will complete a significant overhaul of the law and bolster protections. We would be happy to work with legislators and the Lottery Commission to improve the current language.”
The statement complained that the bill does not provide for the state to use “official league real-time data” for betting outcomes, nor does it prevent certain types of wagers, such as the many real-time proposition bets now available to legal sports books in Nevada and elsewhere.
Current MLB Commissioner Rob Manfred has said the league is “re-examining” its stance on sports betting, and has said the leagues need to be part of the larger debate on legalization.
The West Virginia Lottery Sports Wagering Act recently has been approved by the state House and Senate Judiciary Committees. The bill now will move to the House Finance Committee. State House Delegate Riley Moore said, “We could really be the first mid-Atlantic state to have sports betting, rather than being a state that follows suit.”
Previously, state House Delegate Shawn Fluharty stated, “People are already gambling. Everybody and their mother is basically gambling at this point on sports. But yet we’re not making a single penny off of it at the state level or at the federal level. Why would we not take advantage of this opportunity to regulate something that’s already taking place?”
The bill would allow all five of the state’s casinos to open sportsbooks on land and online through mobile devices approved by the Lottery Commission. It would apply a 10 percent tax rate on gross gaming revenue, compared to Nevada’s 6.75 percent.
West Virginia Lottery Commission General Counsel Danielle Boyd said, “You know, anything that would go higher would not make it profitable for the properties essentially.” It does not include the so-called integrity fee of 1 percent of all bets placed, promoted by the National Basketball Association and Major League Baseball and included in Indiana’s proposed sports betting legislation. Analysts said the fee actually amounts to a 20 percent cut of sportsbook operator revenue.
Regarding the economic impact of sports betting, Boyd noted, “We’re trying to be conservative about the expectations here, because we do recognize that sports betting is probably not going to be a huge windfall of gaming revenue, but it’s an amenity that the casinos can offer that will bring people in and be an economic driver.” However, she said studies indicated sports betting could generate $9 million – $17 million in revenue, and that “would continue to increase until about year three, and then stabilize, but increase just a little bit more until the fifth year after implementation.”
Boyd said about 10 million people live within 90 miles of one of the state’s five casinos. “So there’s a great potential to drive that traffic into West Virginia, which obviously is going to put a lot more money into our economy than just the gaming revenue.”
She added, “Our properties have been very successful at attracting out-of-state client-base, they already have the existing databases and I think that with the ability to use the mobile apps and cross market, we could really see a big impact on the economy of West Virginia. It’ll just be really good for the state.
In Iowa, the House Commerce Committee approved a sports betting bill, although it’s expected to amended substantially. State Rep. Jake Highfill said, “This is not the bill. We will keep working on this bill as we move forward.”
The measure was introduced by state Rep. Ken Rizer, who said it was left vague on purpose to start discussion on the subject. It would allow in-person sports betting at casinos as well as mobile betting by phone or apps. It leaves regulatory details to the Iowa Racing and Gaming Commission.
Amendments have been proposed by the NBA and MLB jointly as well as the Iowa Gaming Association. The leagues, which are interested in the integrity fee, which is not included in the proposed legislation, have registered against the Iowa bill.
Previously, NBA spokesman Mike Bass said, “We support legislation that includes comprehensive protections for the integrity of our sport. We look forward to working with legislators in Iowa and elsewhere to ensure that sports betting laws include these protections.”
