Leagues still pursuing a piece of the legal sports betting revenue pie
Leaders of the two sports leagues most opposed to sports betting issued statements last week setting out their positions on legal sports betting in the wake of the U.S. Supreme Court’s decision in Murphy v. NCAA, which held the Professional and Amateur Sports Protection Act (PASPA) and its ban on sports betting to be unconstitutional.
The commissioner of the National Football League and the president of the National Collegiate Athletic Association, two of the main plaintiffs in the case challenging the state of New Jersey’s sports betting law, both called for Congress to create a federal framework to oversee sports betting in the states.
NFL Commissioner Roger Goodell also implied the league should get a cut of sports betting revenue, through a call for recognition of NFL “content and intellectual property.”
Goodell, a week after the Supreme Court decision cleared the way for legal sports betting, said the decision had no effect on the league’s “unwavering commitment” to “protecting the integrity of our sport.” He said the best way to do that is through uniform federal standards.
“We have spent considerable time planning for the potential of broadly legalized sports gambling,” Goodell said in the statement, “and are prepared to address these changes in a thoughtful and comprehensive way, including substantial education and compliance trainings for our clubs, players, employees and partners.
“These efforts include supporting common-sense legislation that protects our players, coaches and fans and maintains public confidence in our games. We are asking Congress to enact uniform standards for states that choose to legalize sports betting that include, at a minimum, four core principles:
“1. There must be substantial consumer protections;
“2. Sports leagues can protect our content and intellectual property from those who attempt to steal or misuse it;
“3. Fans will have access to official, reliable league data; and
“4. Law enforcement will have the resources, monitoring and enforcement tools necessary to protect our fans and penalize bad actors here at home and abroad.”
Despite the reference to intellectual property, ESPN quoted league sources as saying the NFL is not interested in a direct cut of the action—only on data and video rights.
Lead Murphy plaintiff NCAA, like the NFL a longtime opponent to betting on its games, issued a statement supporting federal oversight of sports betting.
“To ensure integrity in sport, the NCAA supports a federal model addressing legalized gambling and has suspended its championship host policy related to sports wagering,” the statement said, referring to the league’s rule against holding collegiate championship games in host cities with casinos.
“Our highest priorities in any conversation about sports wagering are maintaining the integrity of competition and student-athlete well-being,” said NCAA President Mark Emmert in the statement. “Sports wagering can adversely impact student-athletes and undermine the games they play. We are committed to ensuring that laws and regulations promote a safe and fair environment for the nearly half a million students who play college athletics…
“While we recognize the critical role of state governments, strong federal standards are necessary to safeguard the integrity of college sports and the athletes who play these games at all levels.”
Retiring U.S. Senator Orrin Hatch—one of the original sponsors of PASPA—has already said he will introduce a bill to establish a federal regulatory framework for sports betting, but few give it a chance to pass this year.
“The odds of this bill passing before Hatch’s retirement is similar to the Miami Marlins winning the World Series this year,” opined Legal Sports Report’s Steve Ruddock in a column suggesting the leagues are shooting for a federal framework including an “intellectual property” or “integrity” fee because they have so far failed to convince any state lawmakers to include the fees in legislation.
“The rapid rise of the internet means that sports betting across state lines is now just a click away,” Hatch said immediately following the Supreme Court decision. “We cannot allow this practice to proliferate amid uneven enforcement and a patchwork race to the regulatory bottom. At stake here is the very integrity of sports.”
Experts say congressional action on sports betting is likely to fail because by the time anything could be enacted, sports betting could already be up and running in as many as six states, meaning Congress would be undoing generally popular state legislation and hurting businesses in those states—in an election year. And if it waits for next year’s session, it could be addressing laws in a dozen or more states.
Add to this the historic reluctance of Congress to supersede the states in gambling issues, and the fact that the Supreme Court decision explicitly leaves the states to decide on sports betting, and chances of passing a federal regulatory bill become even more slim.
The final obstacle is the inability of partisan congressmen to agree on anything.
“If you believe Congress is going to suddenly get its act together and have a kumbaya moment over sports betting I have a bridge in Brooklyn to sell you,” wrote Ruddock in Legal Sports Report.
American Gaming Association President Geoff Freeman said on a conference call directly after the Supreme Court decision that he doesn’t expect any federal action on a regulatory framework for sports betting.
“I’ve heard some interesting arguments regarding the benefits of some kind of federal legislation, and some of them can even be partly compelling at times,” Freeman said. “The problem for those making those arguments is that ship has sailed. America long ago decided that gaming would be regulated on a state-by-state basis. I’m not sure how you’re going to bring the federal government in here to tell the states what to do, given the states hold such great authority over betting.”
Last week, Freeman doubled down on this opinion in a letter to Congress outlining the industry’s priorities concerning legal sports betting:
“Below are the priorities the gaming industry will pursue:
“Empower State Regulation: More than 40 states and 260 jurisdictions have proven to be effective gaming regulators. AGA will be a resource to state policymakers and regulators as they consider sports betting legalization. AGA will also combat any attempts by the federal government to neuter state regulatory power.
“Place Consumers First: AGA encourages all stakeholders to understand the intricacies of the illegal marketplace and why consumers turn to it. AGA will promote strong consumer protections – which the illegal market fails to offer – and consumer-centric conveniences such as intrastate mobile wagering.
“Strengthen Game Integrity: Rigorous sports betting regulation strengthens game integrity, a primary aim shared by the gaming industry and sporting bodies. New technologies make it possible to track legal wagering and identify suspicious activities. The gaming industry supports establishing a national data repository to share any suspicious betting information with law enforcement, gaming regulators and sporting bodies.
“Promote Responsible Gaming and Responsible Advertising: The gaming industry encourages effective responsible gaming programs in all jurisdictions that enact regulated sports betting. To this end, the gaming industry will voluntarily pursue the creation of a self-regulatory model to guide sports betting advertising.
“Encourage Contracts over Statutes: Sports betting can benefit sporting bodies and gaming companies alike. The gaming industry supports strong contracts between these parties to address issues such as data and the value of other activities. The gaming industry will vigorously oppose efforts to use federal or state legislation to set basic business terms.”
The AGA’s stance on state control of sports betting regulation was supported last week by the U.S. State Gaming Regulators Forum, which is part of the International Center for Gaming Regulation at the University of Nevada, Las Vegas.
“Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards,” the statement said.
U.S. Rep. Dina Titus (D-Nevada), whose district includes Las Vegas Strip, agreed with Freeman in an interview with the Las Vegas Review-Journal. “I don’t think you’ll see it happen here in Congress,” she said. “For one thing, this is not a priority with them. They are not even very knowledgeable about how gaming works and certainly not about PASPA. It’s going to be very hard to roll all of that back and push it into one federal bill.”
Titus also chided the leagues for continuing to pursue “integrity fees.” “You can call it an integrity fee, but I call it a piece of the action,” she said.
The statement from the UNLV regulators’ forum also criticized the idea of a fee to the leagues. “Additional fees … increase the costs of legal sports betting, siphon much-needed tax revenues away from state coffers, and increase state regulatory burdens,” said the statement, which was signed by Nevada Gaming Control Board Chairwoman Becky Harris, Massachusetts Gaming Commission Chairman Stephen P. Crosby, Louisiana Gaming Control Board Chairman Ronnie Jones and Michigan Gaming Control Board Executive Director Rick Kalm.
“The regulators couldn’t have said it better,” said Freeman in a separate statement last week. “They have our full support, and we look forward to providing any assistance they may need.”
The leagues, though, continue to lobby state lawmakers to include fees to the leagues in sports betting bills. The National Basketball Association and Major League Baseball are now leading the charge in lobbying states. The NBA and MLB are still seeking a tax on all wagers to go to the leagues as an integrity or royalty fee (depending on the state), although it more recently scaled back the proposed portion from 1 percent of wagers to 0.25 percent of wagers.
Major League Baseball is urging state lawmakers to proceed carefully. “This is really a key moment now for baseball and the other sports leagues,” Bryan Seeley, the league’s senior vice president of investigations, compliance and security, said in an interview with ESPN. “It’s pretty rare that you have a huge industry that gets unlocked almost all at one time. The conversations about this and the decisions that state legislators and regulators are going to make in the next year and the next few years are going to have significant effects on our game. It’s really important that we get this right.”
The Professional Golfers’ Association has joined the NBA and MLB in seeking some sort of fee in exchange for its product, but the PGA outlook is a bit different. Last week, a senior PGA official told Legal Sports Report it envisions shot-by-shot betting on professional golf tournaments, which invariably would require the league to provide the data stream.
“The only way to really have active in-play betting, particularly with our sport, is to use official league data,” said Andy Levinson, senior vice president of tournament administration for the PGA.
The leagues are still meeting resistance to any fee in some states, notably New Jersey, where lawmakers say they will refuse to impose any such fee, and Nevada, which has never paid such a fee.
The statement from the UNLV regulators’ forum last week criticized the idea of a fee to the leagues.
Meanwhile, decrying the Supreme Court ruling striking down PASPA last week was none other than Bill Bradley, the former U.S. senator from New Jersey—and former NBA star—who helped to author the law, sometimes known as the “Bradley Act.”
Bradley told the Bergen Record and NorthJersey.com in an interview last week that betting will ruin sports, even mistakenly declaring that the Supreme Court ruling would allow betting by high school students. “This has no restrictions whatsoever,” he said, as if the ruling set regulations, when it actually allows the states to regulate it as with other gambling.
“I regret the ruling,” Bradley said in the interview. “I think the court ignored the impact that the ruling will have on sports in America and values you learn form sports. I mean, they’ve turned every basketball player, football player and baseball player into a roulette chip. And that doesn’t mean pros only. Because now you can bet on college; you could even bet on high school. You could even bet on AAU, 14-year-olds playing in the finals of the AAU. And the only winner here are casinos, in my opinion….
“I think the game will be corrupted. Do you really want to go to your son’s high school basketball or football game and see people in the crowd who are betting, who are not rooting for your child to win or lose, but are betting on a spread? It’ll be pervasive. It is destructive. But again, it’s the Supreme Court making a decision on very narrow grounds.”
Poll: Half of Americans Favor Sports Betting
A new poll has found that 50 percent of Americans favor sports betting. The poll, conducted by Fairleigh Dickinson University shortly before the U.S. Supreme Court decision that struck down the federal ban on sports betting, found that 50 percent of Americans favor it, with 37 percent opposed.
“Sports betting is about two things: It is about legalizing what millions of Americans already do every day (and) it is about intensifying the engagement of a nation of sports fans,” poll director Krista Jenkins, a professor of political science at the New Jersey university, told the Associated Press. “It will now be a race to see who can benefit the most and the earliest from this changed landscape.”
