New Sports Betting Bills Suggest Leagues are Compromising on Integrity Fee

New sports betting bills that have surfaced over the past few weeks in New York, Kansas and now Connecticut suggest that the NBA and MLB are prepared to compromise in their demands for a cut of a future market

The leagues have been touting around ‘model legislation’ that grants them a so-called “integrity fee” – a one percent cut of all the bets taken in their games. But lawmakers in West Virginia recently rejected the plan.

While one percent may sound innocuous, it in fact equates to a tax of between 20 and 25 percent of gross gaming revenue – a higher levy that the state itself plans to charge its operators.

But the emergence of the three new “compromise” bills that puts forward a 0.25 percent integrity fee suggests that the model legislation may have been tweaked to be more palatable to states and operators.

NFL Tackles Sports Betting

Meanwhile, with a US Supreme Court decision on whether to legalize sports betting expected within weeks, and possibly even on Monday, even the NFL is starting to smell the coffee.

According to Sports Illustrated’s Albert Breer, owners and team executives met this week to Ritz-Carlton Grande Lakes in Florida to begin formal discussions on the NFL’s position in the impending sports betting market, and no doubt the best way to monetize it.

“We’re so early on in this process. I don’t have a clear understanding as to where we’re going to go,” Giants co-owner John Mara told Breer this week. “But we’re having discussions that we’ve never had before.”

Wait and See Approach

The league has long been against sports betting – a hangover from the forties and fifties when its games were plagued by match-fixing scandals.

It has been quiet so far on integrity fees because it would first have to come out in support of legalization before it could demand a cut, something it has not yet done. And for the time being, it’s happy to sit back and watch what happens.

“It was explained to me, by several owners, that going in and trying to monetize traditional betting on a point spread would be a low-margin business for the NFL,” wrote Breer this week. “So while the NBA made waves by saying it’ll seek 1 percent of all basketball-related bets, its football counterpart is more likely to play it conservative there.

“If the NBA succeeds? Well, then the NFL will play copycat,” he added.