Leagues Lobbying to Get Their Piece of Sports Betting Action

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Integrity fees, basically a tax from the sports leagues, are at the crux of ongoing discussions with state legislatures to ensure that the leagues receive their slice of the pie from legal sports wagering.

The leagues argue that with legal sports betting now a reality in a handful of US states — and with many more projected in the future — the tax is necessary to provide monitoring to ensure the sanctity of their product and that the competitions are above board.

The integrity fee, about 0.25 percent of money bet on games played by leagues in states that implement betting, would be paid to sports governing bodies by sportsbooks.

When the U.S. Supreme Court legalized sports betting in May, the clock started ticking on states creating their own regulations to govern wagering.

A couple states are dealing with the issue now:

  • Since the Supreme Court ruling, Kentucky has seen a rise in lobbyists from major sports leagues registering with the state. The NFL, MLB and the PGA Tour have all signed up to lobby lawmakers in 2019. Kentucky is anticipating wagering to be $50 million to $100 million in its first year with a $5.5 million to $26 million revenue stream for the state. State Sen. Julian Carroll told the Lexington New Leader that the sports leagues shouldn’t hold their breath on an integrity fee. “I see no sentiment in Kentucky for including in any Kentucky sports betting law a ‘skim-off’ to pro leagues,” he said.
  • In West Virginia, where sports betting is just gaining its footing, sports leagues are asking for a change in the “emergency” sports betting rules, requiring the state’s casinos to pay for official league data. Again, that’s an integrity fee, according to John Cavacini, president of the WV Gaming and Racing Association. West Virginia legislators rejected previous efforts to include the fees in legislation. The temporary “emergency” rules are in place while permanent betting regulations are being worked out.

At last week’s hearing on sports betting before a House Judicial subcommittee, the National Football League stopped short of asking for an integrity fee but did seek “core standards” to protect the integrity of the game.

The NFL wants safeguards on prop bets, a ban on betting by players, coaches and referees, a minimum betting age of 21, a protocol for sportsbooks to communicate across state lines on “abnormal” betting patterns and a requirement that sportsbooks use official league data.

That last one would likely require sportsbooks and casinos to pay for the data – essentially an integrity fee in disguise. It’s a way for the sports leagues to make more money. And essentially, the data already is available, with sportsbooks already getting it for little investment or for free.
At the same hearing, Sara Slane of the American Gaming Association said right now the system is working and no additional oversight is needed.

Of the states that already have joined Nevada in allowing sports betting, Delaware, Mississippi, New Jersey and West Virginia, none have implemented integrity fees for sports leagues.

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