For the last year since the Supreme Court ended the federal ban on sports betting, Major League Baseball went on the road to promote (largely unsuccessfully) an “integrity fee” on sports book wagers.
Last spring MLB tried a different tack at several sports book facilities on the Las Vegas Strip. It tried to sell the league’s proposed Authorized Gaming Operator (AGO) program, which sports book operators could join as “official league data licensees.” It is unclear how many providers have joined the AGO program.
The primary plum being offered such operators is access to the MLB official betting data. An unnamed MLB representative reportedly met with several sports book managers according to Sports Handle. Some sports book vendors already have access to this data.
Sports Handle got ahold of copies of the pamphlet explaining the program and contacted several executives of sports book operations who agreed to speak on condition of anonymity.
Kenny Gersh, MLB’s executive vice president, recently told the Associated Press, “The fee that we are charging for that bucket of rights, and again it’s not just for the data, it’s relative to the size of the operator’s business.”
Gersh added, “So, we are not going to charge somebody who is a small operator the same as somebody who is a large operator.” The deal would give access to MLB club partnerships, media and content extension opportunities, a deal which no sports books have yet reached with anything other than individual clubs.
DraftKings became the Major League Baseball “official daily fantasy game” four years ago. This allows DraftKings to post its banner throughout the league. But this ended in April of 2018 when it became obvious that the Supreme Court was going to lift the federal ban.
One sports book operator told Sports Handle there are advantages to joining the MLB club: “Sometimes you want to market or have a partner as far as advertising your name at stadiums, therefore your name is out there. Those kind of partnerships are fine.”
Authorized Gaming Operators will be able to promote themselves as having an official relationship with the League and use the MLB stamp on advertising and betting products, inside their brick and mortar operations and even on the mobile apps.
MLB recently announced such an arrangement with Swiss-based Sportstrader that made it an official global data provider. In April the British-based Perform Group became another authorized data distributor.
Some feel that such an arrangement will have minimal effect on whether someone places a bet at their establishments. But others would like to be on good terms with MLB. They understand their value, but they want to get value for such an arrangement.
The 0.25 percent royalty the MLB proposes could spell the difference between profit and loss for some operations. According to Sports Handle, “certain operators are reticent about entering into a revenue sharing agreement with the leagues. There is no certainty in betting or bookmaking, which is a volatile business month to month.”
So far the only big casino company that has joined forces with MLB is MGM Resorts International, which has similar arrangement with other sports leagues such as the NBA and NHL. MLB has not publicized how much MGM pays for the AGO program.
However, one of the sports betting operation managers told Sports Handle, “We’ve survived a long time without it. We’ve had a pretty good run and that’s with them fighting us every inch of the way. Now, all of a sudden they not only want to partner with us, they want us to pay for information we’ve pretty much been getting for free.”
