Much as we expected, PASPA continues to generate some controversial issues for the US as the nation looks forward to the possibility of a fully regulated sports betting business. Among them is the question of integrity or rather, as certain of the major sports leagues and players unions would argue, funding to ensure that integrity is maintained in the process of betting on sports.
The starting point for this fee/tax/levy has been set at one per cent which, in isolation, may not sound like a big deal, but ultimately could wipe up to 25 per cent off the bottom line for sports betting operators. That is a big deal! Furthermore, some leagues would like it made conditional that operators only use ‘official’ data – to be monetised, natch – if they want to get in on the action. One wonders how many other regulatory ingredients might be thrown into the mix and at what point will all this simply become too toxic for potential stakeholders.
It’s all becoming a bit divisive, with some industry observers suggesting that the leagues’ calls for an integrity tax are verging on the cynical, nay specious. Is there any evidence, for example, to show that America has a problem with the integrity of its leagues and the sportspeople who operate within them? It’s an important question given that billions of dollars per annum are already bet on sports in the US, albeit illegally, yet betting scandals appear to be rare as rocking horse excreta.
The matter becomes more complicated still when we factor in the involvement of the player unions who believe that their members should have a ‘seat at the table’ and protection for their integrity and image rights.
So, working on the basis that the call for funding to pay for integrity is probably a thinly disguised cash grab, what other methods could the leagues and unions explore in order to harvest an income from sports betting? Well they could do far worse than look at how things work in the UK. One would expect that they already have.
The English Premier League, for example, is the most watched football league in the world and, subsequently, among the richest of sporting institutions. The first club to turn to a betting firm for sponsorship was Fulham back in 2002 when it linked up with Betfair. Now there are circa 45 per cent of English clubs whose stadia and kits are liberally adorned with gambling related branding.
And this relationship works beautifully by generating millions for clubs in revenue and enabling gambling firms to be seen by millions of viewers worldwide on the biggest footballing stage outside, of course, the World Cup. At the most recent count, the combined revenue from sponsorship of Bournemouth, Burnley, Crystal Palace, Everton, Huddersfield, Newcastle United, Stoke City, Swansea and West Ham was £47.3m (US$72m).
Gambling sponsorship isn’t solely the preserve of the EFL, either. The World Snooker Championship, having had tobacco advertising banned in 2006, quickly adopted gambling as a new source of revenue. Since then it has sported branding from 888.com, Betfred, Betfair and Dafabet. Darts, too, has struck a partnership with Unibet, an operator whose branding can also be seen on numerous county cricket teams in the UK. In all, nearly £14bn (US$17.5bn) is lavished by betting firms on sport sponsorship in the country.
The symbiosis is stunningly obvious and shouldn’t be ignored by the major leagues in the US.
But ultimately, all of this will be decided by the courts. The outcome may well be that the leagues will be compelled to look at sponsorship deals and advertising tie-ins to achieve what they believe is their rightful share of the betting revenue cake. Betting firms, several of which are already accustomed to dealing with regulatory and legal challenges, will robustly defend their right to offer betting products without the prospect of a levy on profits. It would take a brave individual to bet on them losing.
For more on the EPL and its love affair with betting sponsorship check out