NFL Briefing On Sports Betting, MLB And NBA Lobbying In 11 States

NFL Briefing On Sports Betting, MLB And NBA Lobbying In 11 States

With just days to go before a potential U.S. Supreme Court repeal of key prohibitions against nationwide sports betting, the major professional sports leagues find themselves in various stages of the ongoing national conversation on broader wagering legalization.

The NFL, typically the most reluctant of the four major sports leagues to talk specifics for or against a nationally legal and state regulated sports betting market, is expected to host a discussion (they call it a “briefing”) for team owners on sports wagering. Many analysts and most sports fans – especially those that enjoy betting on the sports they love to watch – are anticipating that the 2018 powwow will be when NFL commish Roger Goodell finally breaks his comparative silence and really lays out where the league is headed in regard to sports betting. As for the MLB and the NBA, the two leagues that have taken the most actively pro-sports betting stance, they are ramping up their respective and cooperative lobbying efforts in almost a dozen states around the country.

The states being hit the hardest by the combined NBA/MLB lobbying machine are Connecticut, Illinois, Massachusetts, New Jersey, New York, West Virginia, Indiana, Iowa, Kansas, Missouri and Rhode Island, though others could be added to that list in coming days, weeks and months. States like Illinois, New York, West Virginia and New Jersey – which is leading the fight to have the U.S. Supreme Court strike down the Professional and Amateur Sports Betting Act of 1992 (PASPA) - have shown the most promise as far as being influenced by the lobbying efforts. Nevertheless, New York in particular is pushing back against the absolute must-haves on the leagues’ blueprint with some fair substantive alterations to the game plan that could actually help consumers, but we will discuss that in greater detail later.

While nobody really knows where the NFL will fall on the love it-hate it spectrum (or maybe we should call it the NBA-NCAA spectrum, given their stances) when it comes to sports betting, the NBA and MLB have been avowed supporters for quite some time. That said, their lobbying alliance has produced several requests (really more like demands) of lawmakers if the states want the support of the leagues as stakeholders. Though not all of these desired outcomes will end up in every state’s finalized sports betting legalization bills as written, some flavor of the requests probably will – a real testament to the power that the major sports leagues have in influencing the decisions of lawmakers still on the fence.

Among the agreed-upon points the NBA and MLB leadership are looking for are the ability to opt out of certain betting types like live in-game betting and minor league or development league wagering and consumer protections (mainly advertising restrictions in the vein of “think of the children!” and all that). However, the leagues are also looking to the states to more broadly allow online sports betting in a move to draw in users of offshore sportsbook sites that have been serving the high-demand US market for decades, a move that would represent a huge shift for Las Vegas-style casino-based betting shops. The main demand the leagues want from any state-level regulatory legislation though is, of course, compensation: they’re asking for an “integrity fee” (essentially a tax paid to the leagues by the sportsbooks for the use of their product) worth 1 percent of all legal handle.

That last so-called request may be the most difficult to swallow for the state legislators in the aforementioned 11 states, not to mention for the prospective sports betting operators themselves. That’s because what amount to a 1 percent royalty payment to the leagues on handle equates to roughly 20 percent of all the now presumably legal wagering revenue. Even if the estimates are correct and annual handle in the American market is approaching the $5 billion mark, 20 percent is a chunk of change too far for many in the industry, which is why key states like New York are looking to reduce the fee by ¾ to .25 percent.

Taking a look at just exactly what the MLB and NBA lobbying front looks like in this crucial 11 states considering sport betting legalization reveals a consistent pattern in the leagues’ efforts. They are contracting with some big name firms like Cordo & Co, The Parkside Group, Patrick B. Jenkins & Associates, the Advocacy & Management Group, Smith Costello & Crawford and others of that ilk, and they are spending hundreds of thousands per month for the services of those lobbyists. What this means for the future of legalized sports gambling across the country is anybody’s guess, but the smart money is on the leagues beginning to doubt that, if the SCOTUS decides to strike down PASPA, the Congress could still come short of enacting a nationwide legalization to replace the ’92 ban.

If that turns out to be the case, then leagues like the NBA, MLB and, presumably, the NFL had better hope that their efforts to influence the decisions of state lawmakers pays off. If things doesn’t work out for them how they want it to, they may have missed out on billions in potential kickbacks between them, but it won’t be for want of trying. On the other hand, if they do get most of what they want, especially regarding integrity fees then their investment could be paltry compared to the amount they spent leveraging their brand images and the collective image of professional sports in America as an above-board institution.

Either way, the American public in sports betting states seems ready to accept sports betting on a much larger scale than it is currently being offered. If the leagues, the lawmakers and the gambling establishment don’t get in line, US bettors will simply continue doing what they have been doing: taking their business to overseas-based internet sports betting operators where there is very little if any risk of facing prosecution. The cat is well and truly out of the bag as regards sports betting, so the NFL getting on board with the times would only be a natural development, but we’ll have to wait and see what happens later this week.