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Ohio appears to be giving into sports leagues on one request but standing strong on refusing to include an official league data mandate.
The Ohio House Finance Committee approved Tuesday an amendment to H 194 that allows sports leagues to request that the Ohio Lottery Commission prohibit or restrict wagering on a particular type of sporting event or wager.
In a second hearing Wednesday, legislators shot down arguments from PGA Tour representative Andy Levinson as money-grabbing efforts that have little to do with concerns over the integrity of his sport, or that of Major League Baseball and the National Hockey League — for which he also spoke.
When state legislatures balked at including integrity fees or royalties on wagers to sports governing bodies, the leagues began asking for bills to mandate that operators use their official league data. Tennessee and Illinois put such requirements in place for in-play wagers.
Danielle Boyd, head of government relations for William Hill US, told the committee this would have a negative impact on legal sports betting operations.
“Mandating the use of official league data just results in monopoly pricing power for professional sports leagues,” Boyd said. “It will make it difficult for legal bookmakers to price their products in price with black-market operators.”
Rep. Dave Greenspan, who sponsors the bill, agreed that the state should allow private entities to negotiate these agreements, adding that most operators in the state already have existing contracts with leagues for the use of official league data.
“So the market is already generating and creating the environment to secure official league data, either organically or through existing relationships,” Greenspan said.
Dan Dodd from iDEA Growth urged the lawmakers to have the Lottery Commission license suppliers, and that should include data suppliers.
“So it’s not a matter of a licensed sports gaming agent going out and hiring some fly-by-night company to provide data,” Dodd said. “This is an opportunity to make sure multiple companies that provide data have a state license.”
Levinson presented that the leagues oppose the legislation but would support it if only an official league data mandate were added.
“I can’t imagine allowing Ohio consumers to be cheated by sportsbooks who don’t use accurate data until those consumers figure out who the bad actors are and they go out of business,” Levinson said. “I don’t think that’s the right way to do it.”
Greenspan asked if the leagues would provide data to sportsbook operators in the state at no cost, given that their concerns, as being presented by Levinson, were the integrity of their sports.
“We feel if these sportsbooks are going to be earning profits on the backs our product, then we should participate commercially in that. They’ve built an entire industry on the backs of our competition and our athletes, and in no way have they compensated the leagues in the past for that. So we do think it’s reasonable to charge for our product, a product that we invest heavily in building infrastructure to maintain, we invest significantly to operate each week. We feel it’s reasonable to require a license fee to use that information to help support the collection process.”
Rep. Jim Butler asked if the leagues would then provide the data at their cost, pointing out the league would still receive other commercial benefits from legal sports wagering in the extra eyeballs watching their sport.
“We should be able to generate revenue based on our own product,” Levinson said. “It’s not like this is the first time we’ve generated profit on the back of our … data. Or the MLB and NBA haven’t. They’ve licensed data feeds for media companies in the past and we shoud be able to profit on our own product. That seems like general capitalism to me.”
Butler struck back: “That’s where capitalism and free markets end, is monopolies, and that’s why this is an issue.”
The amendment establishes that a sports governing body may formally request the commission to exclude certain types of events or wagers. The commission then decides if there is good cause for the omission.
If the request is not granted, sports leagues get a hearing to offer further evidence in support of granting the requested prohibition or restriction.
Boyd objected to allowing third parties to impose limits on wagers for certain events.
“Limiting betting options available in the legal market or imposing any other restrictions that make it difficult for customers to bet on events would make for a bad fan experience and simply encourage black-market wagering,” Boyd said.
Greenspan responded that the expectation for the language would not be to allow restrictions on wagering for college football, but rather to consider requests on events such as minor league baseball games and NCAA women’s volleyball matches.
“Instead of the bill restricting that, what we’ve done is provide an appeals process for those organizations or anybody to say we don’t want this type of betting,” Greenspan said. “When we put this together, we viewed that as a sensible way of addressing the issues of some as it relates to the various types of wagering.”
Dodd also requested that the legislators add a more open market for mobile apps. He presented that gaming agents should be allowed to partner with no fewer than three online sports operators, or that online sports operators be allowed to partner directly with the state to offer untethered online sports betting without contracting with an Ohio-based casino or racino.
“States like New Jersey have demonstrated that when a robust marketplace is established by reducing barriers to entry for mobile betting companies, the number of consumers participating in sports betting increases,” Dodd said. “Add to that the increase in moneys spent by companies to advertise and it’s easy to see the direct and indirect economic benefits for Ohio are immense.”
Following Wednesday’s hearing, Greenspan told Legal Sports Report that he doesn’t anticipate any changes to the bill based on the two days of hearings.
That means the committee could be ready to advance the bill shortly. Greenspan previously told Legal Sports Report that he hopes to get the bill through the House by the last week of October or first week of November.
Note: this story has been adjusted to reflect an inaccurate quote by Danielle Boyd.