Sources: NBA, MLB Promising Colleges That They’ll Get Sports Betting ‘Integrity Fees’

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Major League Baseball and the NBA are promising a cut of all sports betting wagers — aka integrity fees — to individual colleges via proposed legislation around the country, multiple sources tell Legal Sports Report.

Colleges and sports betting?

Let’s start here: the NBA and MLB are lobbying for sports betting bills across the country. In their ideal legislation, the leagues would get a number of concessions from states. That includes the right to control who provides sports betting data as well as a payment of integrity fees — or a percentage of all handle in a legal sports betting environment — from sportsbook operators to the leagues themselves.

The NCAA itself released a statement last week about its support of federal regulation. But the collegiate athletics organization does not appear to be interested in getting an integrity fee directly. Why not? Likely, it’s because of the optics of such a move. The NCAA comes under fire for a great number of things already, and taking a direct cut from sports betting would be yet another log on that fire.

Instead, the colleges can provide a measure of cover and get the transfer of money directly. Sources tell LSR that NBA and MLB are promising universities that they will get a cut of wagers if they support their lobbying efforts for their preferred legislation.

This advances earlier reporting by ESPN saying that some schools were looking at ways to receive compensation to deal with increased game integrity concerns. A meeting between casinos and sports leagues about the future of West Virginia sports betting also included that state’s two D-I schools: Marshall University and West Virginia University. The idea of those schools being compensated for sports betting was raised.

Colleges and money

Are the colleges really incurring a boatload of new costs? Well, illegal sportsbooks already take billions of dollars of wagers on college events, so if the NCAA and its member institutions are doing little on the integrity front now, then that’s a problem.

It’s possible to argue that creating a legal market actually makes the environment safer for colleges — even with more wagering taking place. However, college students only receive scholarships as compensation, and that leaves them more open to manipulation for sports betting purposes. No matter what, schools are going to put more money into compliance confronted with legal sports betting industries in their home states or nearby.

There’s also the constant debate of whether the NCAA and its member organizations — at least at the Division-I level — really need more compensation, as their players only receive scholarships. The idea that student-athletes are easily manipulated because they don’t make any money could certainly be solved — or at least mitigated — by fairly compensating them for their value to a school.

What’s not clear is if the NCAA is green-lighting these efforts, but it’s hard to believe that universities are pursuing this strategy without the consent of the larger organization.

States still working on sports betting

There are still plenty of states where these integrity fees are still in play, although the number of states where legislative action can be taken this year is dwindling.

In 2018, we’re still at just one state that has passed a sports betting law — West Virginia — although a variety of others were already prepared to move forward (like Pennsylvania, New York, New Jersey, Mississippi and Delaware).

In some states, colleges may carry weight in lobbying for a direct transfer of money than the leagues themselves, who do not always have a presence in a state, nor a compelling argument for receiving an integrity fee. If colleges are brought on board to the NBA/MLB lobbying effort, it would mean an increase of their odds of success of getting sports betting laws that they approve of.