Several years ago, sports leagues’s efforts to push an integrity fee fizzled out before the idea was reborn in official league data.
This was even after bringing in the likes of Joe Torre and Al Leiter did not convince lawmakers anywhere to give in to the argument that sports leagues should be paid simply for existing, or the idea that without sports there would not be sports betting, so everyone should pay the sports leagues.
While dubbed an “integrity fee,” there never appeared to be a fully revealed plan on how, if, or how much of the money would be paid for integrity-enhancing services. The idea was bad.
Presto change-o!
Sports leagues do not own the results of sporting events. They have tried more than once to claim that they do, but federal courts around the country have said they do not.
All this adds up to an effort to make a run around to the argument that they should be paid simply for existing. I too would like to be paid simply for existing (please send letters of support to the fine higher-ups at Legal Sports Report), but that is not how things work.
So, like me, who had to pivot into actually producing written work, the sports leagues pivoted to asking states to mandate the use of official data, which could then be distributed through their chosen providers.
What the $%&! is official league data?
If official league data sounds like something important and necessary, you can probably chalk that up to a victory for the branding teams over at the leagues. After all, ‘official’ is right in the name, so it must be better, right?
The reality is that most bets do not need official league data. Even in-play markets remain so hampered by technology that in US sports betting, there appears little reason to mandate the use of any type of specific data, instead of simply mandating that data be reliable, verifiable, and accurate.
Nonetheless, despite my pleas for states not to adopt something that is not necessary, a number of states adopted official data mandates for Tier II bets, which essentially translates to bets made after a game has started.
I tried to tell you …
I filed comments in a number of states arguing that official league data was not necessary and that market forces were superior to mandates for data. I also frequently highlighted that there was a risk that official data would price out some competitors and would potentially stifle industry innovation.
These concerns, again, were largely ignored. However, a number of states did adopt a requirement that official data be available at “commercially reasonable” terms.
There were varying means of determining what commercially reasonable meant, with none of them being particularly clear. The general consensus seemed to be that sports leagues and data providers should not use their superior market power to extract excessive prices from operators.
Insert ‘we’re all trying to find the guy who did this’ meme
It was shocking, then, that at the end of February, word surfaced that Superbook and Betly reportedly filed a request with the Tennessee Sports Wagering Advisory Council that NFL data was not available at commercially reasonable terms through the league’s official data provider. According to reporting at the time, the parties were encouraged to resolve the dispute themselves.
However, at a meeting following the initial reporting, the SWAC punted on the issue of official data and the question of whether it was available at commercially reasonable terms, sending the question to the legislature to resolve through either letting the mandate stand or repealing the official league data mandate.
Eliminate data mandates
The Tennessee legislature will ultimately decide on what happens to the official data mandate. But as the US market continues to consolidate, other states should consider a repeal of these mandates in order to allow for smaller operators and those with innovative products to have market access.
Some will undoubtedly choose to still use data from official suppliers; after all, leagues very well could incentivize data providers and operators by giving them access to less easily observable data, which very well could show itself to have market value.
What is not clear is why if official data is indeed better, wouldn’t everyone want to buy it anyway? But since at least two companies seem to want to get by without it, maybe it’s not all that special.
Who needs official league data anyway?
The reality is that many operators do not require access to official league data. Requiring that companies purchase official data is an added cost in an industry that is already consolidating around a handful of large companies at a rapid pace.
Creating an open market for data will not only provide greater choice to the industry but could enhance the integrity of the market itself. If there is an error in the official data going out, everyone using that feed is going to get the error. But if there are numerous independent data sources, only one will have an error and it will be easy to see which one.
We are almost five years post-Murphy and are starting to see a maturing market. One of the things emerging is that not enough is being done to provide consumers with choice. Eliminating official data mandates would be one small step forward.
