Much remains TBD regarding the future of sports betting, which was made legal in several states earlier this year with a Supreme Court ruling, but one thing that has changed: the National Basketball Association has decided to find a way to play ball.
Speaking at the Albany Law School's Saratoga Institute on Equine Racing and Gaming earlier this week, Dan Spillane, senior vice president of the NBA, outlined the league's list of goals for the future of sports betting in the United States.
“From a league standpoint, expanding sports betting is going to inevitably pose risks and impose costs on us, but it also brings opportunities for fan engagement, as well as a better understanding through betting on our games,” said Spillane. “We want the leagues to be treated as partners, not as adversaries.”
Spillane expressed an interest on the part of the NBA to shrink or eliminate the black market on sports wagering. No one knows exactly how big the black market is with respect to sports wagering. According to Seth Young, executive director at Foxwoods Resort Casino, estimates of the black market in the United States run between $150 billion and $400 billion a year.
Of course, the illegal market presents a danger to the integrity of sporting events. Spillane hopes to put rules in place preventing insiders from wagering on games and wants the NBA to be given anonymized, real-time information available to betting operators. The league believes getting a look at that data could help them spot unusual patterns indicative of foul play.
“One concern is minor league sports, where athletes may be getting paid less money or not at all, or markets may be more opaque or more limited,” said Spillane.
In a similar vein, Spillane hopes the league will be given the ability to opt-out of certain types of bets. Many factors and individual plays feed into whether one team finishes over another, but Spillane said the NBA worries about prop bets that come down to individual activities, like whether a player will commit a foul before a given point in the game clock.
Among the other provisions the NBA is hoping to include are assurances for consumer protection commonly in place for casino games such as age limits on play, self-exclusion from advertising, and resources for gambling addiction.
Spillane realizes one of the types of bets companies will want to offer are in-play bets which take place after the game has begun. He's hoping the operators will require customers to use official league data to discourage any sort of manipulation of customers.
“To make sure the outcome of those bets and the odds are accurate and consistent across operators, official league data should be used to accomplish that,” said Spillane. “We envision that would be paid for because it's something that requires an enormous amount of investment to collect the data, validate it, make it available on a real time basis. We do plan to charge for it.”
Spillane said there isn't a pricing model in place for this data; currently, the only American entities paying for data are media outlets.
For this extra monitoring and data gathering, the NBA wants a piece of the action. Dan Wallach, shareholder and attorney with Becker and Poliakoff specializing in gaming law, pointed out the NBA has already revised its ask for revenue to offset these costs. Initially the league wanted 1 percent of sports betting revenues and is now requesting .25 percent.
In a later panel, Young pointed out that gambling operators don't like being told what it costs to do integrity monitoring for their offerings.
“Gaming operators know what it takes to run a business, but we're being told by non-gaming operators what it costs us,” he said. “If you're taking money out of the hands of the operators, and the state for that matter, that prevents the operators and the state from investing in things like responsible gaming or a product that can actually compete on the black market. What we're seeing is this is being approached as if sports betting is new and nothing could be further from the truth.”
Dr. Laila Mintas, deputy president for Sportradar US agrees in her experience of analyzing sports wagering in international markets that leagues do make arrangements with wagering operators to cover their costs. Typically though, those contracts are not public, so it's hard for American leagues to find a comp for what they should expect.
Experts said it remains to be seen whether some of these issues will be determined by contract, state law, or federal law. In the current environment, no one thinks it's especially likely federal legislation will come together any time soon, although federal oversight would reduce costs to leagues and operators alike.
“I think it's a very unlikely scenario,” said Young. “Every state is different with different stakeholders within it, different gaming laws, and a different makeup. I personally can't see how you're going to get alignment with racinos, VLT operators, tribes, commercial operators, lotteries – there's too many cooks in the kitchen with too many different laws in too many different places. Maybe that is the real case for federal regulation but I think in reality all of these groups are very protective of their businesses.
“Would it be easier to have federal regulation? Sure. But the tangled web of state law we have in this country makes it nearly impossible.”
Sound familiar, horse racing?
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