As the likelihood of overturning PASPA grows, the relationship between American sports leagues and betting operators becomes more turbulent, something that’s in no small part down to the 1% integrity fee being pitched by many of the leagues.
President of Don Best Sports, Benjie Cherniak spoke to SBCAmericas about what he believes is the real motive behind the touted integrity fee, as well as further expanding upon why American Leagues could be looking at the English Premier League as an example of how to embrace legalised betting.
SBCAmericas: With regards to the integrity fee being proposed by the leagues, do you anticipate it will actually serve any purpose in increasing integrity in sports betting?
Benjie Cherniak: The proposed fee relates primarily to NBA and MLB’s desire to secure their share of sports betting revenues. This is not to say that MLB and NBA are not concerned with integrity. Of course they are, as are all the US based leagues. The reality however is that US residents have been betting via grey markets for decades, reportedly to the tune of approximately 200 billion annually, such that integrity has always been a concern for the leagues. A PASPA repeal may result in magnification of integrity efforts to some extent, or at least increase the visibility of said efforts, but that does not mean there will be a significant correlation between an integrity fee and actual increased integrity of the games, as the leagues have been and will continue to manage this process regardless.
I think we also have to be a bit careful when we say “the leagues” because they do not seem to be operating as a united front as it pertains to the sports betting saga. The NBA and MLB have asked for an integrity fee, whereas NFL and NHL have been relatively quiet on the matter. And what about the NCAA? They are the forgotten child in this equation. Approximately 25% of betting handle in the US is on college sports, and as we know the college student athletes are not paid, making them much more ripe for corruption then the highly paid professionals. The NCAA piece should be a much bigger part of the conversation then it has been to date as this is where we see the greatest integrity risks.
SBCAmericas: Do you foresee a stage where the leagues in America embrace sports betting and work together with operators, or should we get used to this struggle?
BC: I think the relationship between the leagues, the operators, and the states will improve over time. We do not even have a Supreme Court decision yet so we need to bear in mind that these are early days. The NBA and to a lesser extent the MLB position have evolved considerably over the last 12 months and will surely continue to evolve as the landscape crystallises. That said, until we see the NFL formulate a position, we are only playing with half a deck of cards, given the NFL’s popularity this side of the pond. I do think the leagues and operators will eventually work in a more collaborative manner, but the starting point for as such is that the leagues themselves need to work in a collaborative manner. For the moment all parties are treading very carefully in an effort to understandably protect their individual interests.
SBCAmericas: Should American leagues be looking to the English Premier League as an example of how sports betting operators can be lucrative sponsorship partners?
BC: I’m sure the leagues are looking at the financial potential associated with betting operators as sponsorship partners, and of course the EPL is the gold standard. The US leagues have already partnered with leading fantasy operators, so it is within reason to think that in time they will do the same with betting operators. The EPL model is unique however, as each team gets to negotiate their own deal with betting companies as opposed to a league wide sponsorship. I do not see the US leagues voluntarily migrating to a team driven betting model but over time we could see the individual team owners pushing for exactly that as they aim to carve out their piece of the sports betting pie. Needless to say, interesting times lie ahead.