Gerard Scimeca – Chairman, CASE
May 10, 2019
The end of the federal ban on sports betting should be a cause of celebration, the opportunity for states to draw-up their own rules, regulations and licensing procedures that both protect consumers and benefit their local economies with new jobs and new sources of revenue.
But like a bull in a china shop, billionaire sports owners are now barreling in to grab as much of this cash as they can, demanding a slice of the action because… well, just because they can. It’s a predictable development given the sports oligarch’s rapacious appetite for as much money as they can drain from sports fans, but it must be stopped.
According to the online site SportsHandle.com, the MLB and NBA are demanding more money from legal sports betting houses for access to their data feed. In the case of the NBA, the demand comes just as the playoffs are under way, an especially busy time for betting houses and their customers. As any gangster can tell you, the key to a good shakedown is timing. But this isn’t the only way team owners are seeking to line their pockets.
Betting houses rely on up-to-the-minute data to shape the betting environment and set odds for wagers, a reality that is putting data front and center in the debate on how states are writing legislation to license sports betting. Leagues including the NBA and MLB are demanding laws to force bookmakers to get their data from pre-approved league data providers, companies that have a deal to share revenue with the leagues themselves. This is blatantly anti-free market and anti-consumer.
Gaming is an entirely separate industry from the professional sports leagues who seek to control it. It would be similar to movie studios telling theaters they can only sell popcorn and snacks from studio-approved suppliers, or if a car company told its customers they were only allowed to put a certain brand of gas in their tank. None of this is for the benefit of fans or consumers, it’s just a scheme to fatten the bank accounts of team owners.
Putting the screws to betting houses is just a backdoor way to get more money out of U.S. sports fans, the people who already pay $250 for a ticket, shell out $75 for a team jersey, and form the viewership that allows the major sports leagues to ink $40 billion deals with broadcast networks. Any fee increases bookmakers are forced to hand over will only make wagering more expensive for league fans, who the owners are always so eager to claim they care so much about. It closes down the market to competition, innovation, lower prices and more services that fans will demand.
And of course it won’t stop here. If the leagues and team owners succeed in raising prices on fans by controlling data and setting “royalty” rates just as national legalized sports betting is getting off the ground, there are sure to be more price hikes down the road, as they grow hungry for even more revenue.
The excuses offered by the leagues for their money-grab range from establishing an “integrity fee” to protect the honesty games, to no reason at all. This is both ludicrous and dishonest. Federal and state laws already handle legal enforcement of sports-fixing, and as more states pass legislation and set up licensing and regulatory frameworks, enforcement will only be strengthened. Further legal betting has been available in several states for decades with no “integrity” compromise of the U.S. sports industry. The idea that the leagues are suddenly going to serve as the Sheriff of All Sports is laughable on its face.
But the leagues remain very powerful and are demanding laws that give them an open stream of gaming revenue just because they can.
Despite the large amounts of money wagered on professional sports, the bookmakers keep a very slender percentage of it in order to make a profit, which itself is no sure thing. It is not uncommon for books to lose money at various times in the yearly cycle, as they are subject to the fickle fortunes of outcomes just as bettors are. New fees and mandates will only increase the likelihood books increase their losses, leading some to go under, pushing gambling back into the shadows of illegal and unregulated bookies and offshore operators. This is exactly the wrong direction, and squanders the very reason the federal ban was overturned, to give states and their consumers freedom of choice and the opportunity to regulate wagering as a legitimate industry.
As the leagues push forward with demands for more of their fans’ money, they will pressure lawmakers and others to get their way. The only way for fans to truly protect themselves from paying more for the opportunity to wager on their favorite teams and players is to make their voice heard. Tell the billionaire team owners to keep their hands out of our pockets.
