After making two big announcements on Monday regarding online gambling and sports betting expansion, MGM Resorts International saved the big reveal for Tuesday: it will be the official sports betting partner of the NBA and WNBA. We are in a new era, people.
Sports leagues have had a love/hate relationship with gambling essentially forever. Though they know that they gain millions of eyeballs because people like to bet on games, publicly they have always bemoaned sports betting, saying that it harms the integrity of the game. Yes, there have been instances where that has been the case, but by and large, it is just a fun pastime for most people who engage in it.
But now that PASPA has been overturned by the Supreme Court and states are free to legalize and regulate sports betting as they so choose, gaming companies, casinos, and apparently sports leagues are eager to cash in. Sports betting is only legal in a few states at this point, but most expect it to spread relatively quickly, or at least more quickly than poker.
ESPN reports that MGM will pay the NBA at least $25 million over the course of three years as part of the agreement. For that money, the NBA will promote MGM on its different media platforms, allow MGM to use its assets like logos and video, and provide MGM direct access to statistics.
“As the landscape for sports betting in the U.S. continues to evolve at a rapid pace, MGM Resorts is a proven gaming leader for us to work with on this groundbreaking partnership,” said NBA commissioner Adam Silver. “Our collaboration will result in the best possible gaming and entertainment experience for consumers through the use of accurate, real-time NBA and WNBA data, and our collective efforts to maintain and enhance the integrity of our games.”
Speaking of integrity, the NBA is one of the leagues, along with MLB and the PGA Tour, that wants sports books to pay it an “integrity fee,” a small percentage of every bet placed. Even a one percent fee from total bets extrapolates to as much as 25 percent of a sports book’s profits, so sports books and casinos have obviously pushed back on this. So far, no state legislation has included an integrity fee. This deal, though, looks like a substitute.
In fact, Silver said as much, explaining in a news conference, “….we decided here, rather than sort of re-litigating the integrity fee, which is still being hotly discussed state by state, let’s find an approach which is unique to us and where we both feel that we’re being fairly treated.”
I can’t speak to how $25 million affects MGM financially, but it seems reasonable. First of all, MGM made the deal directly with the NBA, so it must be ok for the company. The payment wasn’t forced upon its sports books via legislation. Second, MGM is getting direct, negotiated benefits from the relationship.
Now that MGM and NBA have entered into this agreement, it will be interesting to see if other leagues and gaming firms look to do similar things.
