Two weeks after the US Supreme Court struck down the federal ban on states legalizing sports betting, attention is turning to how the four major pro sports leagues are going to handle what comes next.
The NBA, NHL, and MLB appear united in their approach. But the NFL, as is often the case on many issues, is reacting differently.
The NBA, MLB, NFL, NHL, and NCAA all opposed New Jersey’s case from the beginning (the case was originally called Chris Christie vs. NCAA et al.), not because they opposed legalized sports betting, but because they didn’t want to deal with a messy, state-by-state legal landscape. Too bad: New Jersey won its case, which means that New Jersey and other states can now move to legalize sports betting in their state.
The ruling does not mean that sports betting is now legal at the federal level, which is what the leagues would prefer: a uniform federal framework. And the leagues (led by the NBA) are still pushing forward with that separate lobbying effort. But that will likely take years to play out.
The NBA was quick to reiterate its stance in a statement after the May 14 SCOTUS ruling (bolding ours): “Today’s decision by the Supreme Court opens the door for states to pass laws legalizing sports betting. We remain in favor of a federal framework that would provide a uniform approach to sports gambling in states that choose to permit it, but we will remain active in ongoing discussions with state legislatures. Regardless of the particulars of any future sports betting law, the integrity of our game remains our highest priority.”
NBA, MLB want integrity fees
Speaking of “integrity,” the NBA and MLB have both said they will seek a 1% “integrity fee” on all legal bets placed on their games.
The concept (in particular the name choice) has been mocked by some, but others see it as an inevitable step, and a positive one because it means the players get a cut of the betting.
NHL Commissioner Gary Bettman has not specifically voiced support for integrity fees, but did tell CNBC last week that he now believes legal betting will be good for hockey. (And in light of the SCOTUS ruling, the NHL looks ahead of the curve with the Golden Knights expansion team in Las Vegas; the NFL aims to follow with the Las Vegas Raiders in 2020.) On the issue of fees, Bettman is likely to fall in line with whatever NBA Commissioner Adam Silver and MLB Commissioner Rob Manfred do. “The NHL won’t be driving the car,” says Dustin Gouker, managing editor of the website Legal Sports Report. “They’ll sit on the passenger side and generally be amenable to what the others want.”
The NFL, on the other hand, will not seek integrity fees.
According to ESPN’s Don Van Natta, speaking this week on Outside The Lines: “The NFL just doesn’t think an integrity fee, a one percent fee, is in anyone’s interest.”
NFL takes a different tack
Rather than demand a direct cut of the betting, the NFL appears to be focusing on getting paid for selling rights to its own data and video footage—intellectual property that legal betting operators will want to pay for in order to help them set lines and prop bets.
In fact, the NFL already began quietly making deals and partnerships three years ago with data firms that monitor betting trends, in anticipation of the likelihood of legalized betting. Now it’s focusing on such data and video in its response to the SCOTUS ruling.
NFL Commissioner Roger Goodell confirmed this approach when he broke his silence on the issue this week in a statement: “We have spent considerable time planning for the potential of broadly legalized sports gambling and are prepared to address these changes in a thoughtful and comprehensive way.” He also voiced support for “Congress to enact uniform standards for states that choose to legalize sports betting,” like the other leagues want.
“The NFL is sort of aligned with the NBA and Major League Baseball, in that they think regulation is the best way to go,” says Gouker. “The difference is in how they are going about it. The NFL doesn’t seem to be interested in getting a cut of all wagers like its counterparts are. They may see those ‘integrity fees’ as problematic both legally and from an optics standpoint.”
Indeed, no league is typically more concerned with “optics” than the NFL. Just this week, in a move that shocked many, NFL owners decided on a new policy that the league will fine teams whose players do not stand during the national anthem. It was seen by many as a capitulation to President Donald Trump, who has railed for the past year against the NFL player protests.
How the NFL approaches sports betting will also surely be scrutinized.
The sports betting ruling, and how the pro leagues are reacting, was the subject of a recent episode of the Yahoo Finance Sportsbook podcast with guest Dustin Gouker; listen below.