A reported partnership between MGM Resorts International and the startup Alliance of American Football (AAF) raises numerous political and ethical questions.
ESPN published a report Monday indicating that the AAF signed a deal with MGM to provide exclusive in-game betting on its contests. The AAF, according to the story, will roll out a mobile app in which viewers can watch the game and bet on the same screen. The app will operate through MGM’s gaming license.
MGM declined comment to Legal Sports Report through a spokesperson.
What exactly is an AAF?
The AAF is a brainchild of Charlie Ebersol and Bill Polian. Ebersol, the son of former NBC Sports chairman Dick Ebersol, and Polian, a longtime NFL executive, are the league’s co-founders and top executives. Former NFL stars Troy Polamalu, Hines Ward, and Jared Allen also are listed among league staff.
The eight-team league — which is different than Vince McMahon‘s planned XFL reboot — will play a 12-week season starting in February 2019. Inaugural teams will include:
- Salt Lake City
- San Antonio
- San Diego
None of the first eight cities are in states with legal sports betting. MGM currently operates sports betting apps in Nevada and New Jersey, but could expand quickly through its recent deals with GVC and Boyd Gaming.
CBS will broadcast select games and all contests can be streamed free through the AAF app. Integrating a betting platform into the MGM-aligned app makes giving away the product stream a more appealing option.
“What’s great for us is the access, provided that it’s single entity, all the teams and venues are all aligned and there isn’t any union issues,” said Scott Butera, MGM’s president of interactive gaming who was formerly the commissioner of the Arena Football League.
I always feel like, somebody’s watching me …
Sports betting as a means of drumming up interest in a new league makes perfect sense. More controversial is the AAF’s plan to outfit players with wearable tracking devices. More from the ESPN report:
MGM will put wearables on players to collect second-generation stats that will be used to better assess odds for in-game betting. Pro sports unions have strongly opposed the use of sharing any information from wearable data with outside parties.
“We’ll collect the data and then be able to have the algorithm sort out what is relevant,” Ebersol said, giving an example of a quarterback’s greater chance of throwing an interception based on a certain amount of ball speed on his throws.
After taking in the data from the tech on the field, the numbers are crunched and new odds are immediately set. Gamblers, Butera said, will also be able to bet on the data itself — including speed on the field and speed of the ball, among other things.
Tracking and usage of such “second-generation” data raises major concerns for player unions. That’s why Butera’s comment among a lack of union issues rings as important — players likely will have to consent to sharing data without compensation or limitation to its potential usage. Unions for the major sports leagues express concern over the safety and scope of such data collection.
Exclusive can only work in certain situations
The exclusivity of the MGM-AAF deal can function because of the proprietary nature of the wearable data. The partnership creates data no one else can access to power betting no one else can provide.
This can work in a setup without a union to challenge the use of the data and or a casino competitor wanting to acquire it for a startup league without proven interest.
Most in-game betting, though, relies on readily available statistical information from major pro sports contests. Wagering on who will win the third quarter or how many points a player will score requires only two eyes on a TV, not a Fitbit strapped to the point guard’s chest.
Don’t forget MGM’s unprecedented deal with the NBA as well. The casino giant becomes the league’s only official gaming partner, and with that comes an implied extension of support from the NBA to MGM. How the NBA might view this AAF deal is of interest.
The MGM deal with AAF also raises natural questions about how the NBA might use Second Spectrum data in the future. The NBA Players Association certainly will have input there as well.
Integration dives into murky waters
MGM and the AAF charge firmly into sketchy territory for legal sports betting with the next step in their plans. From the report:
Ebersol also says that the opportunity exists to allow the league to disproportionately pay players whose prop bets are bet on more, as MGM has promised to share its betting data with the league.
“In our system, there’s really a limitless cap on what a player can make,” Ebersol said. “Money from the amount of bets placed on them is one of the ways.”
Butera said he can imagine the tech the AAF is creating to one day be used by other sport leagues and bookmakers.
“It’s why we didn’t just sponsor it, we invested in it,” Butera said.
Basing compensation on proportion of betting essentially attempts to quantify the entertainment value of each player. It also does not take much imagination to see how such a system could be manipulated and leveraged by those aligned with players or teams.
Those opposed to state-regulated legal sports betting easily could help their cases by conflating time-tested regulated sports betting enterprise with these test balloons. It’s not difficult to imagine Sen. Orrin Hatch or Sen. Chuck Schumer pointing to the AAF’s plan as a reason for the need for increased oversight of sports betting.