Sports Leagues Continue Push For Integrity Fees

Sports Leagues Continue Push For Integrity Fees

The National Basketball Association (NBA) and Major League Baseball (MLB) were two of the main professional organizations standing in the way of legalized sports betting in the US before the Supreme Court struck down the federal law known as PASPA on May 14th . Nevertheless, they are determined to secure for themselves a sizeable slice of any future sports betting action, with NBA commissioner Adam Silver arguing their entitlement to an integrity fee, and MLB Commissioner Rob Manfred stating:

“We need laws — whether they’re state laws, federal laws, whatever — that allow us to protect the integrity of our sport. That’s our job. We’re not going to delegate it to some regulator in New Jersey or whatever, with all due respect. We care more about it. It’s what we’re about.”

As of yet, however, no details have been provided as to how they would be able to protect the integrity of sports better than anyone else, leading some industry experts to conclude that they are still living in denial since the Supreme Court handed down its milestone ruling.

Intellectual Property Rights

Rob Manfred and Adam Silver have long lobbied for US sports leagues to receive a cut of all legalized sports betting revenue based upon the premise that some of the money could then be used to protect the integrity of their product. In addition, they are claiming that their organizations also have intellectual property rights over their games, and as such should receive a royalty or integrity fee, just as a musician “receives a royalty for the music that’s being played.” Elaborating further on the point, Manfred stated:

“We spend the money to produce the product. Gambling, sports betting operations are free-riding on that product. It’s our intellectual property at the end of the day.”

Official Data

Now that sports betting is allowed in the US, the NBA has said it wants real time data to be updated as quickly as possible so that fans and gamblers can see reliable stats without having to rely upon TV or streaming services that typically have a 7-15 seconds lag. As Silver explains, this will help gamblers benefit from accurate information, whilst also allowing casinos to know when and if to pay a bet.

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According to the NBA Commissioner, a 1% “integrity fee” on wagers would then enable the league to cover the additional security costs of policing the industry, as well as compensate them for the quicker, more reliable data that their improved technology framework can provide.

Prefer Federal Framework

This week, Manfred doubled down on his stance by requesting that the sports leagues should be granted exclusive rights to protect the integrity of sports, and that “integrity fees” should be included in any future sports betting legislation. Meanwhile, Manfred and Silver have made it well known that they would still prefer to see a federal
framework imposed on the industry, rather than leaving it up to individual state governments.

Nonetheless, the Supreme Court’s ruling would seem to stand in the way of their demand. After all, it was the country’s highest court that ultimately decided it was unfair that some states were allowed to provide sports betting while others were not. That’s why it has now been ruled an individual state’s issue, rather than one that should be decided by a large bureaucratic governing body.

Maintaining Pristine Image of Sports

Manfred has tried to balance his argument by claiming that he is generally positive about how legalized sports wagering may help create a greater level of “fan engagement” in games, stating recently:

“People are more interested in the sport, they consume more of the sport. You want to take advantage of that opportunity without letting gaming become too intrusive. Gaming can go over the top. You kind of saw it in the DraftKings/FanDuel wars, right? That’s an example of it. We want to find that sweet spot where fans consume more of our game without the gaming becoming overwhelming.”

Manfred further stated that it was a chief concern to maintain the “pristine image” of the MLB, which succeeded in raising a few eyebrows, especially considering the league’s track record when it comes to the use of steroids. In December 2009, for instance, Sports Illustrated named the MLB’s performance-enhancing steroid scandal as the biggest sports story of the 2000s.

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