According to a recent report, Major League Baseball and the National Basketball Association have been doing more than simple lobbying to get a royalty fee from emerging sports betting operations around the country.
The league’s, especially MLB, are demanding a royalty for their official data, which is critical for sportsbooks, especially for in-play betting. The league wants the royalty for data distributed by its licensed partners.
According to a report at the website SportsHandle.com, the leagues have formed a strategy they see as “playing hardball.”
“The National Basketball Association and Major League Baseball’s quest for a direct, off-the-top cut of legal sports bets has escalated well beyond lobbying at statehouses across the country,” the report said.
The article, citing unnamed sources, says the data firm “Sportradar, doing the bidding of Major League Baseball, told certain sportsbooks they will need to fork over a ‘royalty’ of 0.25 percent of wagers taken on MLB contests for access to the league’s official feed through Betradar.” The article also said a similar strategy was used for NBA information ahead of the league’s playoffs.
SportRadar issued a strong denial of the article to insidergaming.com, saying it was “inaccurate and bordering on libel.”
The league, commenting to Forbes Magazine, did not confirm or deny the story, but said the league feels it has a right to ask for such fees.
“MLB invests significant resources and capital to produce a fast, reliable and rich data feed that will allow sports books to create more engaging products for our fans and generate additional revenue from the ability to offer more types of markets and keep those markets open longer,” the league said. “The right to use our official data requires a direct license from MLB and the data will be supplied by one of our authorized data distributors.”
This is the first season the league is making their official data feed available to sports betting operators and the licensing structure was put in place prior to the start of the current season, officials told the magazine.
The Sportshandle story acknowledges that other data feeds are available to sportsbooks, but they may not be as fast as the official data feed, which could limit some in-play betting.
The league also said it can also offer more than just data through licensing fees.
“We have granted our data distributors a grace period during which they can supply our official data to operators while we negotiate deals for its use,” the league told Forbes. “In addition to a license to use official MLB data, the deals we are looking to strike also include rights to use other MLB intellectual property and access to certain marketing opportunities to further distinguish these legitimate operators from unlicensed operators, including offshore books, which will not have any access to such data, rights or marketing opportunities.”
