The National Basketball Players Association, which represents NBA players, has agreed to changes in its new Collective Bargaining Agreement (CBA), allowing players to endorse and invest in sports betting and fantasy sports.
The CBA, ratified in early May, goes into effect for the 2023-24 season.
Under the agreement:
- Players may participate in sports betting or fantasy sports endorsements that involve either a general endorsement or specific endorsement of betting on non-NBA sports.
- Players may hold passive, non-controlling interest in sports betting or fantasy companies, limited to less than 1 percent stake for companies that offer or facilitate NBA bets or contests.
More than two-thirds of league franchises have at least one sports betting sponsor. The New York Knicks and Philadelphia 76ers have multiple. The Phoenix Suns and Washington Wizards involve physical sportsbooks inside their arenas. The league also makes money from partnerships with sports betting data providers.
The NBA has recognized gambling-related revenue as “basketball-related income,” subject to a 51 percent to 49 percent split between players and owners. The NFL has a similar clause in its CBA.
Up until now, athletes could not appear in commercials while active. So, instead you see the Manning Brothers and Jamie Foxx.
Colorado Rockies outfielder Charlie Blackmon became the first active MLB player to endorse a sportsbook last year after MLB CBA changes similar to what the NBA did, according to Legal Sports Report.
NFL players may endorse casinos, though they are prohibited from anything more, and multiple players have been suspended for violating the league’s gambling policy. State laws governing name, image and likeness (NIL) rules for college athletes commonly make gambling companies ineligible for sponsorship.
Before the ratified CBA, team governors—the rebranded term for team owner—had been the sole exception to a prohibition on gameplay-related personnel controlling interest in a sports betting business.
The exception enabled Houston Rockets Team Governor Tilman Fertitta to acquire $700 million of DraftKings shares in 2021 when the sports betting giant acquired his casino brand, Golden Nugget. SEC filings reveal Knicks owner James Dolan was also a DraftKings shareholder before the company went public in 2020.
The exception allowed Dallas Mavericks owner, Mark Cuban, to invest in Underdog Fantasy.
The Suns Kevin Durant and the Hawks star Trae Young will likely be the first players to take advantage of the loosened investment rules, though technically they already did.
Underdog has a conditional sports betting license in Ohio and a temporary two-year license in Colorado, though there is no timetable for it to start taking bets. It has been offering fantasy sports betting contests in states that allow it since 2020.
