NBA And MLB Attempt To Justify Integrity Fees

February 19, 2018
MLB and NBA logo

The NBA and MLB have been making some recent moves in preparation of legal sports gambling reform. The pair issued a document calling for ‘integrity fees’ to be paid out from sports betting wagers. As if the quick-180 on sports gambling wasn’t enough, their latest justification of these integrity fees is almost laughable.

This document surfaced amidst the state of West Virginia attempting to pass legislation that would legalize sports betting. The MLB took it a step further in publicly stating their demand for the state to pull the legislation and redraft it to better fit their agenda. They attempted to disguise their remarks with calls for stronger consumer protections, but in reality, these leagues want this integrity fee platform set in stone.

How much are they asking for? The NBA and MLB feel entitled to a 1% cut of all sports wagers in any state that it is allowed. They feel that some compensation is due because they apparently spend billions of dollars putting on these games. Without their expending all this money, there would be no games to bet on. Dan Spillane, NBA Assistant General Counsel, recently supported this statement in an interview with West Virginia MetroNews. Spillane stated that basketball betting exists because the NBA puts on these elaborate games and deliver a “high-quality product.”

There are several problems with this stance. For starters, the NBA and MLB are not putting on games for fans. They are putting on games to make money off them through advertising, television rights, ticket sales, merchandising, etc. Delivering a “high-quality product” is a surefire way of increasing your profits from these revenue streams. Fans want to pay for a great experience. Television broadcasters want to show quality games (hence why you see the top teams shown on national coverage in primetime). Also, it’s not like the NBA pays for arenas to be built. That bill falls to the hosting state to foot.

If West Virginia and other states pass legislation, it’s not like the NBA and MLB will stop putting on games. That would cause them to lose even more money. They wouldn’t be able to block those states from viewing the games on television. Any type of action like that would lead to fierce backlash.

What’s happening is that the NBA and MLB are attempting to cash in on something they have fought against for years. They are tied up in the New Jersey sports betting case on the side against legalization—how more contradictory can you get than that? They have finally realized legal betting online is headed for sports and they want to get their cut of the profits.

These next few months should be interesting. The leagues will likely not back down, and if the NFL and NHL decided to join in we could be seeing a sports betting legalization gridlock. States won’t want to give up 1% of their revenue for no reason, and they shouldn’t have to. Hopefully this dumpster fire of an argument doesn’t stick for long.