The NBA has been way ahead of leagues like the NFL when it comes to legalized gambling. Over three years ago, commissioner Adam Silver penned an op-ed in the New York Times calling for a different approach to the prohibition of sports gambling outside of Nevada — other states have a form of wagering on professional sports, but it’s generally with parlay cards. Now, the NBA is moving further along in its support for gambling. The league is even calling for a 1 percent cut of every wager made on the sport.
It’s essentially an “integrity fee.” Some of the money generated will go to the league to monitor irregularities in the betting market. Sportsbooks and the league already monitor for these irregularities to protect the integrity of the game, but that’s just a straight expense. The 1 percent fee would help offset that cost and develop greater capabilities in monitoring better markets. As gambling becomes more prolific, it’s important to make sure leagues invest in these types of defenses.
There’s also the ability to generate extra revenue off of something that is already happening. Casinos and their holding companies only generate a minuscule amount of overall revenue from sportsbooks. We’ve discussed this before, but According to the 2013 Nevada Gaming Abstract, casinos in Clark County (where Las Vegas is located) generated almost $9 billion in revenue that year. Sportsbook revenue accounted for roughly $127 million, less than 2 percent of the total. Betting on sports just doesn’t drive revenue for gaming companies. Estimates for how much is wagered illegally range from a few billion dollars per year to over $20 billion. It’s still something, as 1 percent of $20 billion is a good amount of ancillary revenue.
The NBA understands that gambling increases engagement. There’s already forms of legalized gambling that companies say is not gambling — DraftKings and FanDuel are the top examples of that. So it’s simply applying the logic that if something like DraftKings or FanDuel increase engagement, gambling should have the same effect.
The NFL looks to be the league that is going to die on that anti-gambling hill. It’s going to be tougher to keep that public opinion once the Raiders move to Las Vegas. The NBA takes things a step further. The NBA even brought up the idea of kiosks and apps where bets can be placed at venue rather than at a casino. This is already commonplace in European markets where gambling is legalized.
If there are kiosks in-venue then the NBA definitely deserves a cut of the profit. They could essentially double-dip. First, teams or the league have an official gambling partner which brings in partnership dollars. Then, the league gets its 1 percent integrity fee cut.
There’s still a long way to go in the battle for legalized gambling. The Supreme Court will rule on whether New Jersey can allow legalized wagering some time in the summer. Multiple other states already have laws on the books which can speed up the process if they are allowed to follow New Jersey’s lead. Legalized gambling could be a nice ancillary tax revenue for states struggling with budgetary issues.
The NBA’s idea should bring every sports league on board. Not only do they get funding to insure that there are no irregularities, but they also get to benefit monetarily at what could theoretically be a pretty good amount of money. There’s no debate that this type of gambling already goes on. Offshore sportsbooks already advertise heavily in the United States anyway. Download any sports-related podcast and listeners are bombarded by BetDSI, MyBookie, and other offshore book advertisements. People who want to gamble already can go on a website and place bets at any time. They bet before games, during games, after games, in games, at the venue, in the bar and every other place with internet connectivity. The leagues should benefit from this and right now they can’t. States should be collecting tax revenue and right now it’s a black market.
The NBA has it right — and has had it right for some time now — and it’s time other leagues join in making sure that there is a safe, legalized way to bet on sports.