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There has been a flurry of investment activity in the daily fantasy sports industry in the past six months. A material amount of the funds originate with sports leagues or individual teams.
Three of the four major sports leagues have deep relationships with fantasy sports sites. The NBA partnered with FanDuel, while Major League Baseball and the NHL joined DraftKings. The NFL has yet to pick a fantasy sports partner, although some two dozen of its teams have.
A full roster of partnerships can be found here.
The fight to expand sports betting is already happening. Fantasy sports websites would be well-positioned to offer straight sports betting once betting on individual events becomes legal.
The vast databases of players willing to put up cash on sports contest owned by these companies combined with the brand recognition by sports fans make for an agreeable marriage.
New Jersey is in its second attempt to find a workaround for the Professional and Amateur Sports Protection Act (PASPA). Discussions have occurred in other states, too.
NBA Commissioner Adam Silver became the first professional sports executive to suggest that sports betting should be legal. In November 2014, Silver authored an op-ed in the NY Times. This was published one week before a court hearing in the New Jersey sports betting case.
Silver has become a realist, noting that the time of ignoring the issue has passed. On the other hand, he feels that the issue should be resolved on a federal level and not through backdoor attempts by states.
There have been hints that sports leagues want a piece of the betting action. In a response to Silver’s NY Times op-ed, Atlantic County State Sen. Jim Whelan and Assemblyman Vincent Mazzeo suggested paying the leagues 0.25 percent of the handle on New Jersey bets.
Betting shops in other countries have similar deals based on action or licensing. Mark Cuban, owner of the Dallas Mavericks, suggested charging licensing fees to sportsbooks to use the data provided by the NBA.
The current policy dating back to the David Stern era in Toronto contradicts the path that the NBA is willing to take.
The Ontario Lottery may not take any action on NBA games. This agreement was made when the Raptors entered the league in 1993. The NBA pays the provincial gambling monopoly for the funds lost by not accepting action on its games. The British Columbia Lottery made the same agreement when the Grizzlies played in Vancouver.
None of the other three sports leagues have taken the liberal approach that the NBA has. The NHL is currently fighting expansion of sports betting in Canada that would allow for single sports bets. The professional hockey league has also shown that it is uneasy about the possibility of a Las Vegas franchise.
Major League Baseball allows betting on its Toronto Blue Jay games in Ontario. The NFL has no issues with the betting on its games hosted in London.
All oppose New Jersey’s attempt to spread sports betting.