The NBA has undoubtedly been the strongest proponent of all major U.S.-based professional sports leagues for the abolition of a law that prohibits states (other than Nevada) from offering sports betting on individual match-ups. Yet, the support for a change in the law comes with one caveat. The NBA wants a piece of the action.
The league characterizes its commission request as an "integrity fee." It seeks 1% of the amount wagered on any events concerning NBA games and says that the fee should be coming out of the revenue received from sports betting operators that would be involved in the transaction.
NBA spokesman Mike Bass justifies the fee by referencing the risk the league is and will be taking as it supports a change in the current law that limits full-fledged sports betting to taking place within Nevada's borders.
"Sports leagues provide the foundation for sports betting while bearing the risks it imposes, even when regulated," says Bass. "If sports betting is legalized federally or state by state, we will need to invest more in compliance and enforcement, and believe it is reasonable for operators to pay each league 1% of the total amount bet on its games to help compensate for the risk and expense created and the commercial value our product provides them. This is a similar approach to legally-regulated sports betting in other international jurisdictions."
But the American Gaming Association (AGA), a trade group representing the $240 billion U.S. casino industry, disagrees that the 1% "integrity fee" is necessary or justified, and takes the position that it is merely a proposal that skims money from American taxpayers.
"We are pleased that the NBA today joined with the gaming industry in support of vigorously regulated sports wagering. We can all agree that the 25-year ban on sports wagering has been a failure in every regard," said AGA President and CEO Geoff Freeman on January 24. "Now, let’s get real about eliminating the illegal market, protecting consumers and determining the role of government – a role that most certainly does not include transferring money from bettors to multi-billion dollar sports leagues."
The AGA notes that a legal Nevada sports book realizes only 3.5% to 5% in revenue and that a 1% "integrity fee" on all money wagered legally would amount to 20% to 29% of that total revenue. Freeman believes that the money that leagues "skim off the top" will distort the odds that legal bookmakers are able to provide, encouraging Americans to continue to operate criminally in an illegal, underground market.
Ultimately, this is a lot of posturing as the federal law prohibiting sports betting remains in place. However, that could change depending on a case currently pending in front of the U.S. Supreme Court that may strike down the federal prohibition. A ruling on that case is expected in the first half of 2018.