OT NBA seeking 1% sports book fee

[LadyStanley]

I can imagine the NHL (and NFL, MLB) also wanting similar.

Click to read more...

 

[Kane One]

Good luck. I don’t see why they think they own the rights to what happened in their games. Didn’t the NBA lose a lawsuit for fantasy sports royalties?

 

[BattleBorn]

I can imagine the NHL (and NFL, MLB) also wanting similar.

Can't happen, won't happen.

Sportsbooks don't make a ton of money, they make the vig. Profit margins are 2-5% on all their revenue. If the leagues want half of the revenues, they can run their own books, which you know they don't want to do/can't do.

 

[cutchemist42]

Theres no reason to this, I would tell them to screw off.

 

[BKIslandersFan]

If betting isn't such a huge part of casino revenue, then legalization of sports gambling won't effect Vegas economy much?

 

[BattleBorn]

If betting isn't such a huge part of casino revenue, then legalization of sports gambling won't effect Vegas economy much?

Depends on how you look at it.

From a casino profit POV, it likely won't impact much. From a sports betting perspective, it will hurt Las Vegas overall. This is the only place in the US where you can legally bet on sports, so the people that come here to do that will be less likely to come if they can do it at home.

There's a lot more to the economy of Las Vegas than the bets these people place that make a little money for the casinos.

 

[BKIslandersFan]

Depends on how you look at it.

From a casino profit POV, it likely won't impact much. From a sports betting perspective, it will hurt Las Vegas overall. This is the only place in the US where you can legally bet on sports, so the people that come here to do that will be less likely to come if they can do it at home.

There's a lot more to the economy of Las Vegas than the bets these people place that make a little money for the casinos.

People already bet on sports outside Vegas now.

 

[BattleBorn]

People already bet on sports outside Vegas now.

Yeah, and the illegal sports wagering economy is larger than the Las Vegas sports betting economy by orders of magnitude.

I'm not talking about guys with a bookie, I'm talking about the group of accountants from Des Moines that come out for March Madness and bet/gamble/stay/eat/whatever in Las Vegas because they can bet on the games here and don't know how to do it in Des Moines.

It will have an impact on Las Vegas, for sure.

 

[willy702]

Look at it this way. Two guys want to bet on the two teams playing an NBA game, Mr. A and Mr. B. They both want to bet $110 to win $100, typical odds for sports betting.

Mr. A bets $110
Mr. B bets $110

Game ends and Mr. A's team wins.
Mr. A gets $210 (his bet plus win)
NBA gets $2.20 for their exorbitant fee
Tax (15% of profit is a number being thrown around, its effectively about 10% in Nevada) $1.50
Profit to bookmaker is $6.30.

The bookmaker has to pay his costs out of that $6.30. Note he took in $220 in bets, only keeps $6.30, so 2.9% profit margin before any costs (employees, rent, line services, payment processing, etc), plus the risks inherent in bookmaking where this kind of perfect action of matched bets rarely happens. Legal bookmakers largely won't accept this. Casino owners who get a monopoly on action might because it drives other betting action, but in a competitive market having an additional 1% of the top just won't fly. The NBA at best will be given a 1% net win tax, so 10 cents in the above scenario.

I'm certain the NBA is aware of this math and frankly I doubt they care. By insisting on such a fee they would effectively limit the legal betting, which may cut down on the potential revenue, but if you stand to get 22 times more from a 1% revenue tax versus a 1% net win tax, you push the bigger number. And the end result would be continued play offshore, which these days is becoming the way neighborhood bookies operate as well. What would get legalized and offered in the US would be crappy lottery odds type games that you see in Canada. On parlays the tax isn't a big problem because the margins are larger and the amount bet is smaller.

 

[LeHab]

If betting isn't such a huge part of casino revenue, then legalization of sports gambling won't effect Vegas economy much?

OP article states 2% of total bets comes from sports for a total of 4.5b. House takes 219m of that. Dont think much impact will be felt one way or another.

If legit bookmakers have to worsen odds to pay a cut to pro teams then many will likely keep on betting using other channels with better odds.

 

[YEM]

integrity fee?

NBA is trying to act like a neighborhood mobster here...

 

[mouser]

Simply not going to happen.

 

[Bizz]

You have to have integrity first before you start charging for it.

 

[cutchemist42]

But what mechanism would force thrm to give the leagues to give a cut? I mean LV isnt currently doing so right?

 

[cutchemist42]

Why Do The NBA And MLB Care So Much About WV Sports Betting?

I just don't see how the leagues will be succesful on this. I might not sure they have the lobbying power they think for a subject like this. The integrity fee is kinda BS too as the more markets becoming open allows for even more transparency and less likelihood for shenanigans to happen.

But the lay of the land was not friendly in West Virginia from the jump:

• There are no MLB or NBA teams in the state, meaning they have less pull than they might elsewhere.
• The bill in WB was already pre-baked. The state has been working on the subjectsince last year. When the bill was introduced and with the support of the powers that be in the legislature, its passage was already a heavy favorite. There was little chance the leagues were going to influence the legislation.
• The leagues putting their hands out asking for a huge chunk of money is poor optics in almost any state, but especially so in a state like WV.

Despite those forces working against the leagues, taking a loss in WV is still a potentially dire scenario.

No cut for the leagues in any state so far
The states that have already legalized sports betting have nothing the leagues want, especially that integrity fee/tax:

• Nevada sports betting: It’s existed for decades without giving money to the leagues. The leagues have a snowball’s chance in hell of getting money from Nevada.
• NJ sports betting: The leagues have actively opposed New Jersey in its effort to legalize sports wagering. Give me a maximum bet on “never” on the prospect of NJ cutting the leagues in.
• PA sports betting: The state enacted a sports betting law in 2017, well before the leagues started to lobby. While the state may go back into its law to fix an extremely high tax rate, the state is not likely to change its law just to give the leagues a cut.
• New York sports betting: A draft bill surfaced with a 0.25 percent tax on handle payable to leagues that would actually have to be tied to integrity. The leagues don’t really want that either; they want the whole enchilada. (The state also has a law on the books that already legalizes wagering only at the state’s commercial casinos, with nothing for the leagues in there, either.)

 

[Gnashville]

NBA lost it’s integrity when it was revealed they were fixing series.

 

[Kane One]

NBA lost it’s integrity when it was revealed they were fixing series.

I don't follow basketball, so can I have some context?

 

[Gnashville]

I don't follow basketball, so can I have some context?

About a decade ago the NBA had a ref arrested for gambling on games. He revealed that the league suggested to the refs which teams they wanted advancing in the playoffs. There was a Lakers vs Kings playoff game (in which the Kings were leading the series) that was very lopsided and even the media and players suggested was fixed.
Donaghy docs allege refs altered playoff games

 

[Kane One]

About a decade ago the NBA had a ref arrested for gambling on games. He revealed that the league suggested to the refs which teams they wanted advancing in the playoffs. There was a Lakers vs Kings playoff game (in which the Kings were leading the series) that was very lopsided and even the media and players suggested was fixed.
Donaghy docs allege refs altered playoff games

Thanks

 

[cutchemist42]

About a decade ago the NBA had a ref arrested for gambling on games. He revealed that the league suggested to the refs which teams they wanted advancing in the playoffs. There was a Lakers vs Kings playoff game (in which the Kings were leading the series) that was very lopsided and even the media and players suggested was fixed.
Donaghy docs allege refs altered playoff games

One and only NA major sport event I genuinely thought was fixed at the time and the years after. The ref coming out and saying it later just helped me enforce my opinion.

 

[Gnashville]

One and only NA major sport event I genuinely thought was fixed at the time and the years after. The ref coming out and saying it later just helped me enforce my opinion.

It has been hidden for a while now. ESPN went from covering the ref and his claims to complete Clam when the NBA renewed their agreement with them.

 

[cutchemist42]

Glad to see Maryland did not include the league in the fees. If the leagues didnt need an "integrity" fee from the original states, they shouldnt expect one from the others.

Maryland House Passes Sports Betting Bill By A Wide Margin

The bill advanced quickly after its initial introduction in early February. The House Ways and Means Committee reported it to the full House floor earlier this week with some amendments.
The bill would authorize wagering via the state’s horse racing tracks and casinos. What’s the opportunity for sports betting in the state? More from a fiscal note attached to the bill:

The consulting firm Global Market Advisors estimates under a low scenario and a high scenario that sports betting in Maryland could generate $13.7 million and $182.1 million in revenues, respectively, if sports betting was legalized.​

The law, as written, contains no mention of the “integrity fee” that the NBA and Major League Baseball have been seeking from legislatures across the country.

Results in WV, Manfred failed in getting a veto, no integrity fee.

The sports leagues were the loudest opponents, though, with the NBA and MLB actively lobbying in the statehouse. In the very moment the House was debating the bill last week, Manfred was on a conference call with local media pushing for a veto.
Why did sports leagues want a veto?

West Virginia’s new sports betting law shuts out MLB and other sports leagues from the integrity fee they’re seeking.

Lobbyists pitched those fees to WV lawmakers, but there was significant pushback in both chambers. The House, in particular, struggled to find justification to cut the leagues in. The demands never found their way into S 415, so the leagues remained opposed until the bitter end.

 

[awfulwaffle]

Hell to the no. The fact that the NBA has been involved with rigging games in the past, why should they get money off of gambling. Opens up a big can of worms.

 

[LadyStanley]

Leagues, casinos lobby states for cut of sports betting

"Integrity fee" = euphemism for cut of the action.

Gambling proponents say kicking back that much to the leagues would make sports books unprofitable and prevent a legal, regulated betting market from developing. They’re seeking an arrangement similar to what exists in Nevada, where the state takes 6.75 percent of winnings on top of a federal tax of 0.25 percent of the amount wagered.
Casinos have a built-in edge when it comes to battling in statehouses. Casinos are legal in 40 states; the commercial companies and American Indian tribes that run them are well-versed in dealing with regulators and state lawmakers. The NBA and MLB, on the other hand, are new to lobbying states on gambling and have sometimes relied upon the bully pulpit of their commissioners to get their point across.

Article looks at what MLB and NBA have been doing, with the NFL and NCAA on the sidelines (to date). NHL not mentioned at all in article.

 

[Bjorn Le]

1% is absolutely insane, and even if the NBA had a legal argument, the books would fight tooth and nail in court to stop it. I think Nevada's fees are pretty high too.