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Official league data would be front and center if you built a word cloud to visualize the sports betting conversation. The battle for control over data has emerged as one of the primary fronts in the effort to shape US policy at the state and federal level.
Following their years-long opposition to gambling, leagues now seek a role as primary stakeholders in legal sports betting. And they are intent on profiting from US sports betting, ideally via a direct share of the total amount wagered.
Short of that, though, leagues broadly support a mechanism allowing them to monetize their data. This quest for official league data mandates has supplanted the integrity fee as the leagues’ preferred method to get their piece of the sports betting gold rush.
Official league data refers to the set of results and statistics compiled by sports organizations and their authorized partners. Here’s a formal definition laid out in the Tennessee sports betting law:
‘Official league data’ means statistics, results, outcomes, and other data related to a sporting event obtained pursuant to an agreement with the relevant governing body of a sport or sports league, organization, or association whose corporate headquarters are based in the United States, or an entity expressly authorized by such governing body to provide such information to licensees …
Such language also requires defining additional terms, such as “governing body” for the agency which prescribes the rules of a given event. Lawmakers in some states have also chosen to divide wagers into distinct tiers for the purposes of data, requiring further legal clarification.
The concept of empowering the leagues to control US sports betting data flow first appeared in a lobbying document circulated by the NBA and Major League Baseball in February 2018, three months before the fall of PASPA.
Apart from Tennessee, Illinois is the only other US state with an official league data mandate in its sports betting law.
Official league data has come to apply exclusively to props and in-play betting, and lawmakers have taken different linguistic approaches to divide the industry. The language in Illinois, for example, expressly separates wagers into two tiers:
- “Tier 1 sports wager” means a sports wager that is determined solely by the final score or final outcome of the sports event and is placed before the sports event has begun.
- “Tier 2 sports wager” means a sports wager that is not a tier 1 sports wager.
That law only requires Illinois sportsbooks to use official data for Tier 2 bets. The law in Tennessee refers to those wagers as “live betting” and defines them under similar terms.
The leagues argue that this structure represents a compromise, as lobbyists initially pressed for a complete lockdown on betting data. Lawmakers in the majority of US markets, meanwhile, have chosen to follow the lead of Nevada by omitting such mandates altogether.
In reality, Tier 1 wagers universally can be graded without official data. Outcomes involving the final score or outcome can be observed by anyone. That renders the concept of compromise in this area dubious.
Most US sportsbooks are under no obligation to use any particular source of data. Laws in two states, however, include a requirement that operators use official data to settle certain wagers:
The Illinois law requires leagues (or their data companies) to obtain a license to act as a Tier 2 data provider. The law in New Hampshire does not impose any restrictions, but it does require licensees to disclose the source of their in-play data.
There is no fixed cost for the use of official data. Individual operators can negotiate directly with the leagues and their data partners for usage rights via a private agreement in states without mandates.
State legislation does, however, lay some subjective pricing guidelines.
The phrase “commercially reasonable terms” appears within the sports betting law of both states with a data restriction. Under this qualifier, operators may circumvent the requirement if they can show that such official data is not being made available at a competitive price.
Of course, the leagues themselves dictate the initial terms, and there is little precedent on which to judge their reasonableness. When a state mandates the use of official data, it also artificially constrains the marketplace by allowing only one source of purchase.
Commercially reasonable appears a nebulous term to define at best and an impossible one at worst. Sources within the industry peg the commercial cost of official data in the range of 0.25% of the amount wagered on each league, or at least that is what leagues reportedly are asking via distributor Sportradar.
There is no evidence to suggest that. According to Sportradar, the primary difference between its side-by-side offerings of pricier official league data and cheaper unofficial data is speed.
Official data can flow into an operator’s system as many as three seconds before unofficial data, but unofficial data has been sufficient to grade in-play wagers in the US market to date.
The leagues say they provide the fastest, most accurate data on the market, acquired through significant investment in technology. The original MLB/NBA lobbying document worked to convince lawmakers that requiring official data would help “ensure the accuracy and consistency of betting outcomes for fans.”
During in-person testimony, NBA Executive Dan Spillane pitched official data as the “one true data” for sports betting.
Nevada, however, has operated its regulated sports betting market without official league data for decades. The rise of in-play betting in the US could create a legitimate question about the utility of official league data feeds in the future, but that has not yet been an issue in the Silver State.
Robust data is essential for a dynamic betting product, and bettors should feel confident that tickets are scored the same across all operators regardless of the data source.
Ultimately, operators and their bettors will dictate how much official data is worth. The leagues have not yet proven the value of theirs, making mandates more difficult to defend. Operators and leagues who forge commercial agreements can test that value in the coming years.
Official data is a non-exclusive product, but it does require a league-level partnership to unlock. Here are the current US sports betting partnerships involving data:
|DraftKings||MLB, PGA Tour (DFS)|
|FanDuel||MLB, NBA, NHL|
|MGM||MLB, NBA, NHL|
There are essentially two key players in the real-time sports data arena: Sportradar and Genius Sports. Each of the major US sports leagues has a deal with one or both of them, relationships that have expanded alongside the appetite for legal sports betting.
The PGA Tour also has a new deal with IMG Arena for in-play betting data.
These companies act as collectors and gatekeepers, holding exclusive (or co-exclusive) rights to distribute official data to media outlets and gaming operators. The perceived interest in this data for sports betting is a big reason Sportradar and Genius Sports seen their values soar in recent years.
No US operator currently uses biometric data for sports betting. As technology continues to make data more granular, though, some operators are already exploring the possibilities.
Illinois lawmakers went so far as to create a framework for biometric betting in the future. Here’s the relevant definition from the 2019 law:
“Personal biometric data” means an athlete’s information derived from DNA, heart rate, blood pressure, perspiration rate, internal or external body temperature, hormone levels, glucose levels, hydration levels, vitamin levels, bone density, muscle density, and sleep patterns.
Under that law, Illinois bookmakers may only use biometric data with consent from the athlete’s players’ association. Expect strong resistance from players’ unions in college and professional sports at any attempt to collect, store, and monetize the biometric data of their athletes.
The Tennessee law contains a related prohibition on the use of “material non-public information” in sports betting. To date, no such group has been willing to allow that amid overarching concerns for player privacy.
Yes, although leagues are moving toward a conflation of the two for the purpose of seeking profits from sports betting in the US. At the summer 2019 meeting of the National Council of Legislators from Gaming States (NCLGS), Spillane included official data in the NBA’s legislative wishlist but omitted the integrity fee.
The integrity fee (or royalty fee) describes the leagues’ attempt to collect a direct cut off the top of US sports betting handle. Such a fee is not tied to any specific product or service but instead acts as compensation for the use of the leagues’ intellectual property — the games themselves.
No US sports betting law includes a handle-based fee by any name. Nevada paid no such fee in its decades of booking sports wagers.
The utility and reliability of official league data remain in question. Mandating its use provides no guarantee of the integrity lawmakers seek in legal US sports betting.
The industry views such mandates as plain bad policy. Lawmakers essentially force private operators into commercial agreements with the leagues while granting one party what amounts to a monopoly on data. While distributors are not currently changing pricing based on mandates, some privately suggest they could reevaluate that position if legal requirements become more widespread.
Stakeholders have litigated the issue of sports data ownership in court on multiple occasions, creating a tangled web of precedent. Sports law scholar John Holden has written much about the legal context for official league data on these pages:
The American Gaming Association supports private commercial agreements for official data but opposes legislative mandates.
Here’s how the conversation surrounding official league data has developed, beginning just before the US Supreme Court overturned PASPA in May 2018.
February 2018: In advance of the SCOTUS decision, leagues begin lobbying for the mandated use of official league data in state-regulated sports betting. The NBA and MLB debut their proposed model in West Virginia.
March 2018: Lawmakers in Connecticut are the first to hear the full pitch from league representatives. A committee full of Kansas lawmakers is the first to consider a tiered approach to the data mandate later in the month.
June 2018: The NFL starts to get its hands dirty on sports betting policy. During the public comment period in Pennsylvania, the pro football league asks regulators to require the use of official league data.
July 2018: An alliance between the NBA and MGM marks the first US partnership between a sports league and a gambling company. It won’t be the last.
August 2018: US Sen. Chuck Schumer (D-NY) submits a proposal for federal sports betting legislation, including an official league data mandate. The American Gaming Association offers its opposition via a letter to the senator.
September 2018: In perhaps the most obvious attempt at an end-around of the legislative year, leagues move to amend the emergency rules in West Virginia to include official data. Lawmakers passionately turn the proposal aside, and regulators finalize the rules without league concessions. NFL executive Jocelyn Moore makes the case for official data in a federal sports betting hearing before Congress.
October 2018: The NCAA finally weighs in on policy with its core regulatory standards, which include official league data.
November 2018: A lawmaker in Washington D.C. attempts to find a compromise by trading an integrity fee for the use of official data. Members — and the leagues themselves — wholeheartedly reject that proposal from Councilmember Jack Evans.
December 2018: In one of the year’s stranger unions, MGM, DraftKings and FanDuel team up with the leagues to lobby in DC. Their proposed list of concessions includes the required use of official league data.
May 2019: Lawmakers in Tennessee become the first to require official league data for in-play wagers. The NBA shuts off the flow of in-game data to operators without rights to the official feed. A late attempt to add data mandates into a Louisiana bill ends up sinking legislation tied to both sports betting and daily fantasy sports.
June 2019: On the last day of its session, Illinois becomes the second state to include official league data in its sports betting law. Members of the legislature cite the law in Tennessee as justification for its inclusion in theirs.
July 2019: While there is no mandate, the Indiana sports betting law does give regulators discretion over data sources. The IN Gaming Commission declines its option to impose restrictions in the draft rules, though it reserves the right to disapprove of a source for any reason.