A Fee By Any Other Name Smells As Bad
Legal Sports Report

Who Called Official League Data Mandate A ‘Money Grab’ At Ohio Hearing?

Integrity fee

One prominent casino company held back little on Thursday in calling out official league data mandates.

Eric Schippers, of Penn National Gaming, called sports leagues’ request for state legislatures to mandate the use of official league data by sports betting operators a “money grab” that is “in lieu of not being able to get the integrity fee.”

Speaking at an Ohio House Finance Committee hearing, Schippers explained that professional sports leagues went around the country last year pushing for integrity fees in sports betting legislation.

Industry stakeholders fought against the integrity fee, which would take a significant chunk of already slim margins for sports wagering.

Leagues have been unsuccessful getting the fees in every state thus far.

“When the cost was denied by all these states in terms of an integrity fee, suddenly you heard we should mandate official league data,” Schippers said. “That’s the way we’ll do it.”

Does integrity fee = official data?

Schippers noted that legal sports betting has occurred in Nevada for many decades with sportsbooks buying their data from two principle providers — Sportradar and Genius.

“There was never any opposition from the leagues to say, hey, we need a piece of that or we want to add on top of that,” Schippers said. “You just go buy your data. So the notion of official league data now includes putting a vig, if you will in the gaming vernacular, on top of what we should already buy through these two services.”

Citing an American Gaming Association report that the four sports leagues will earn a collective $4.2 billion from legal sports betting, Schippers contended that leagues already will profit from the expansion of regulated sports betting and don’t need further incentive to maintain the integrity of their product.

“We don’t believe there should be an added fee for the leagues on the area of integrity,” Schippers said. “Already baked in, in everybody’s interests, is ensuring integrity – from a regulator’s standpoint, from an operator’s standpoint and from a league’s standpoint.”

The legislation discussed at the hearing, Rep. Dave Greenspan’s H 194, doesn’t currently contain an integrity fee or requirement to use official league data.

Should the lottery be in charge?

There are two Ohio sports betting bills with competing viewpoints. Sen. John Eklund‘s bill would establish the Ohio Casino Control Commission as the regulator and limit sports betting to the state’s 11 casinos and racinos.

Greenspan’s bill would make the Ohio Lottery Commission the regulator and allow participation from fraternal and veteran organizations. Greenspan envisions people placing bets on a kiosk at these organizations and receiving payouts over a certain amount from the Lottery Commission, in the way someone would claim lottery winnings.

Eklund has been making his case as to why he believes the Casino Control Commission should be the regulator.

Greenspan responded that the Lottery Commission is the right choice because it uses a closed-loop broadband intranet for lottery transactions. This, he contends, will address concerns related to mobile wagering staying within the state so as not to violate the Wire Act.

“That’s why this bill and the Lottery Commission is the way to go because there’s already an intrastate network and environment set up,” Greenspan said.

Schippers said that he’s fine with the Lottery Commission being a regulator as long as it’s not a competitor.

What about in-play wagers in Ohio sports betting?

Representing MGM, which operates MGM Northfield in Ohio, Ayesha Molino asked the committee to leave the decision on what types of wagers a gaming operator may offer up to regulators.

She specified that MGM does not believe limitations on collegiate and in-play wagering work.

“Customers already have access to all bet types on a robust black market with little repercussions,” Molino said. “To be competitive against this market, regulated gaming operators must be able to provide consumers with a product that they want.”

In defense of in-play wagering and concerns that, for example, a pitcher could easily make the next pitch a strike or a ball in cahoots with a bettor without raising suspicion, she contended that MGM would only offer propositions that could not be easily manipulated.

“As regulated operators responsible for paying out on bets, we have no interest in booking bets that can be easily manipulated or raise questions about the integrity of our gaming operations.

“We recognize that no batter can guarantee a home run in the 7th inning, no basketball player can guarantee a game-winning three-pointer and no quarterback can guarantee a 60-yard pass completion. As such, overbroad legislation that would restrict categories of wagers is not grounded in a meaningful analysis of integrity risk.”

Matthew Kredell
- Matthew started his career as a sportswriter at the Los Angeles Daily News, where he covered the NFL, Kobe-Shaq three-peat, Pete Carroll’s USC football teams, USC basketball, pro tennis, Kings hockey and fulfilled his childhood dream of sitting in the Dodgers’ dugout. His reporting on efforts to legalize sports betting began in 2010, when Playboy Magazine flew him to Prague to hang out with online sportsbook pioneer Calvin Ayre and show how the NFL was pushing US money overseas by fighting expansion of regulated sports betting across the country. A USC journalism alum, Matt also has written on a variety of topics for Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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