Leagues say they "invest billions" into their games and deserve a cut of future sports wagering
Legal Sports Report

View: Leagues’ New Argument For Sports Betting ‘Integrity Fees’ Is Their Worst Yet

NBA MLB argument for integrity fees

The NBA and Major League Baseball are using a novel argument to validate their desire to get a one precent cut of all sports wagers — what they are calling “integrity fees” — in any state that legalizes wagering on games.

Namely, their latest talking point is this (I’m paraphrasing): They spend a lot of money on putting on games, so they should get compensated because you wouldn’t have anything to bet on otherwise!

This is some high level nonsense that has no place in the debate over legalization of sports betting going on in statehouses across the country, as legislatures grapple with the issue.

What the NBA and MLB are arguing

The flashpoint for all of the new chatter from the NBA and MLB on sports betting comes in West Virginia, which appears to the state closest to passing a sports betting bill. (Many states are attempting to do so, should the federal ban be struck down in the New Jersey sports betting case in front of the US Supreme Court.)

It’s been a full-court press to be sure, in WV and beyond. NBA assistant general counsel Dan Spillane did an interview with WV MetroNews. You can listen to the full interview here. (It starts at the 42-minute mark.) He is using a talking point that the league offices apparently think will play well. Here’s Spillane from the interview:

“Second is that we invest billions and billions of dollars into creating a quality product, into policing our sport, into making this something that fans are excited in and want to watch. And that’s really the backbone of sports betting. The reason why sports betting can even exist is because we stage these games and deliver a high-quality product. And think it makes sense to be compensated for that, too.”

A lobbyist for the NBA and MLB, Scott Ward, used similar arguments in testifying in a hearing in the Senate Finance Committee on Monday.

Are we really supposed to buy that this is a reason why the leagues should get a percentage of total handle for sports betting nationwide via their proposed “integrity fees”?

The NBA and MLB are not holding games out of the goodness of their heart

Complaining that it’s expensive to put on games is about as disingenuous as it gets.

The leagues aren’t spending lots of money on games as some sort of charity effort to make fans happy, to spread good will wherever they go. They do it because it helps them make astronomical amounts of money already from television rights, ticket sales, merchandise, etc. If putting out a low-quality product was a better route to making more money — it’s obviously not — rest assured the leagues would be cutting costs in putting on the games.

It’s also not arguing from a position of strength. We put on games! No games, no sports betting!

What are the NBA and MLB going to do if West Virginia and other states legalize sports? Stop having games? Spend less on games and integrity? Black out televised games in those states? Let’s see: Nope, nope and nope.

There’s also the argument that people will bet on nearly anything, regardless of the quality, and that sports betting makes otherwise not compelling games interesting to fans. Looking at tonight’s NBA schedule, I am looking at you, Chicago Bulls (19-36 record) vs. Orlando Magic (18-37).

Instead of taking a conciliatory and collaborative approach to working with states and gaming interests on the issue, the latest from the NBA and MLB appears to be a “doubling down” on their current stance.

Let’s go back to the Adam Silver op-ed

The other argument that is gaining favor from the NBA is that it costs a lot of money for them to ensure the integrity of their games.

Rewind to 2014, when NBA Commissioner Adam Silver wrote his infamous New York Times op-ed advocating for regulation of sports wagering in the US.

Nowhere in there does Silver say anything about how regulation would create unfair costs that are simply passed onto the leagues. Here is some of what he wrote:

Let me be clear: Any new approach must ensure the integrity of the game. One of my most important responsibilities as commissioner of the N.B.A. is to protect the integrity of professional basketball and preserve public confidence in the league and our sport. I oppose any course of action that would compromise these objectives.

But I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.

That last part should be seen as key. Silver said a regulated market should be the goal, and that the regulated market is preferable for his league to the current black market. Regulation allows sports betting to be “appropriately monitored and regulated.” No regulation means it can’t be.

Yes, a lot of time has passed between then and now. But Silver nor anyone else from the NBA has advanced the idea that there is a large amount of cost involved from the regulation of legal US sports wagering until 2018.

To be sure, there are increased costs associated with more wagering, but they already have a lot of money and resources tied up in integrity monitoring.

Where’s this all headed?

The NBA and MLB apparently aren’t prepared to give up their desire to get a cut of the wagers. The war with casino interests over sports betting will continue to get more heated.

The NBA public relations effort has been met with skepticism from nearly all corners to date. And their argument of “we spend money on games, so give us money from sports betting” is unlikely to play any better.

The leagues right now are creating ill will where none needed to exist, all to get a slice of they probably don’t deserve, nor are they terribly likely to receive.

Maybe Adam Silver and the rest of the folks at the league offices should go back and re-read that 2014 NYT article. Their goal, like Silver said back then, should be increased transparency and integrity from sports betting, not making more money.

Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.