Hey, why shouldn’t team owners and athletes get a cut of the action? After all, they provide the “inventory” by which sports gambling takes place at all, an argument that will get amplified after the Supreme Court decision overturning a federal sorta-ban on legalized sports betting. Until now, the sports leagues have only petitioned New Jersey to include an “integrity fee” requirement, but with Sen. Orrin Hatch gearing up to push for federal control of the sports-gambling industry, it will soon move to Washington:
In late January, NBA vice president Dan Spillane explained to the New York state Senate why the state, one day, should give the league some cash. In a joint effort with Major League Baseball, Spillane had come to testify about the prospect of legalized sports betting and what provisions the professional leagues believed should be included in potential laws.
Among those positions was the rationale for a desired feature some league executives call simply “The Fee.” In his testimony, Spillane argued that gambling operators should be legally obligated to pay each league 1 percent of the total amount bet on their games, as compensation for providing the inventory for the wagers and for the leagues’ efforts in monitoring suspicious activity. Commissioner Adam Silver backed up the plan in February at his All-Star Weekend news conference, and the proposed 1 percent tax became known as an “integrity fee.”
As many states race to pass legislation in the wake of Monday’s Supreme Court ruling that allows states to determine the legality of sports wagering, the proposed integrity fees have caused debate in state legislatures and caught the attention of gaming industry insiders. League officials say they are a necessary and fair distribution of revenue. Sports betting experts view them as a desperate request unaligned with the financial realities of sportsbooks.
The professional sports leagues may have a good argument, especially in terms of licensing. After all, the expanded legal gambling will make it difficult for these leagues to draw bright lines between gamblers and their officiating and play, bright lines they need to maintain in order to maintain credibility with fans, at least those not focused on end-zone dances. If the NCAA starts demanding license fees, though, perhaps someone should ask whether that will go to compensate the athletes.
The “financial realities of sportsbooks” notwithstanding, don’t be too surprised to see these fees be part of the federal government’s oversight, at least. Gambling operations don’t have fabulously popular and glamorous bookies to send to Capitol Hill. Expect the big leagues to send their best-loved stars to schmooze elected officials and perhaps even the White House, posing for pictures and asking that they not get exploited without any compensation. They’ll claim it’s for the kids, while bookies will claim they need the money for … what, exactly? After all, they’re getting to operate fully in the open now, so they’re already ahead of the game. The LeBron James Protection Act will be fabulous. Very high energy, people tell me.
However it unfolds, the legalization of sports betting is proving popular. A new poll shows that a majority supports legalization mostly as a revenue enhancer for government:
Half of all Americans are likely to be celebrating the recent Supreme Court decision to allow legalized sports betting in states beyond Delaware, Montana, Nevada and Oregon. The Fairleigh Dickinson University Poll of adults nationwide, conducted before the Supreme Court rendered its decision, found fifty percent who say they favor legalization everywhere, as compared with a little more than a third (37%) who are opposed. The Fairleigh Dickinson University Poll has been asking Americans similar questions about sports betting since 2010, and opinions remain fixed.
Among those who said they oppose the expansion of legalized sports betting, the biggest concern people have centers around the ravages of gambling. Sixty-six percent are likely to oppose the Supreme Court’s recent decision because of fears that more will fall prey to the lure of a gambling addiction. Worries also extend to the spread of organized crime (43%) and games becoming less fair (39%).
Conversely, among those who favor the nationwide expansion, the two biggest reasons for supporting the ability for other states to join the party are the additional tax revenue for states (52%) and the simple fact that people are already betting illegally through office pools and the like (57%).
Interestingly enough, the least likely political demo to support legalized sports betting is Republicans, who only support it 45/43. Both Democrats (53/36) and independents (52/32) have majorities in support of it. Orrin Hatch may have his finger more on the pulse of the modern GOP than first thought. Among other demo results, men are far more likely to support legalization (60/32) than women (40/42). Also, seniors are slightly opposed to the idea (42/43), while younger demos have majorities in favor.
But what about sharing revenue with the teams? That turns out to be a lot less popular than sharing revenue with the government. Overall, respondents oppose the idea by nearly 2:1, 32/62. Strong opposition to this exists in every single demo, with non-whites being the most sympathetic at 39/55. Maybe it’ll take more than LeBron James to score a win in Congress after all. Peyton Manning to the red emergency phone, please …. Mr. Manning, please pick up the red emergency phone …