Companies Lobbying For Sports Betting
The National Basketball Association (NBA), the Major League Baseball (MLB), the Professional Golfers' Association Tour (PGA Tour), the National Football League (NFL), and the National Hockey League (NHL) are five sports organizations in the United States that are lobbying or requesting for sports betting regulations. As can be seen below, there are some differences in what these sports organizations are demanding. The NBA, the MLB, and the PGA Tour are seeking compensation equivalent to a percentage of the total amount wagered, among other things. The NFL is seeking the mandated use of official league data and the ability to influence the types of bets sportsbooks can offer, among other things, while the NHL is seeking either congressional action or a collective agreement among states to standardize sports betting rules. All in all, these sports leagues are making these requests to maintain game integrity, make sports betting consistent across states, and protect intellectual property and other assets.
Given the sample source provided, where the lobbying efforts of the MLB and the NBA were discussed, we took sports franchises to mean sports leagues.
Main Lobbying Action
In February 2018, when 16 states were reported to have already proposed sports betting legislation, there was a report that NBA was actively lobbying in seven states, namely, Indiana, Iowa, Kansas, Missouri, New York, Rhode Island, and West Virginia. NBA's lobbyists were also MLB's lobbyists. A total of around 30 lobbyists were co-registered for both leagues, with New York having 11 lobbyists, the biggest concentration. A number of lobbying firms, including Orrick, Herrington & Sutcliffe LLP, were engaged. It was reported as well in September 2018 that lobbyists for the NBA were setting up shop in Kentucky, where there is no NBA team yet.
In February 2018, there was news that NBA, along with the MLB, was calling for legislation that entitles leagues to an "integrity fee," amounting to 1% of the amount wagered. The two leagues were also seeking age restrictions and internet gaming regulation. Dan Spillane, NBA's assistant general counsel for league governance and policy, explained that the integrity fee would serve as compensation for the risk and expense brought about by sports betting and the value the leagues' products create for sports betting operators. The fee is supposed to maintain the integrity of sports, but it has so far drawn ire from several parties and has been deemed self-serving.
Main Lobbying Action
In February 2018, there was a report that apart from MLB's aforementioned co-lobbying with NBA, MLB was reportedly lobbying in Illinois as well. Illinois was the only state where the NBA had no registered lobbyist.
Also, in June 2018, it was reported that the MLB and the NBA had been hiring over 80 lobbyists to influence lawmaking in over 12 statehouses. In New York alone, records indicate that the two leagues had been jointly spending $58,500 a month on the services of 21 lobbyists, who all came from the state's five leading lobbying firms. In New Jersey, on the other hand, the two leagues had reportedly hired 13 top lobbyists from Trenton, including well-known A.J. Sabath and Eric Shuffler. These lobbyists reportedly had been able to land private meetings with New Jersey's top officials, including the governor's chief of staff, Senate President Steve Sweeney, and Assembly Speaker Craig Coughlin. In West Virginia, lobbyists for the two leagues had been able to land a closed-door meeting with Governor Jim Justice, who owns The Greenbrier resort that periodically hosts NBA and NFL training camps and PGA tours.
There was news as well in September 2018 that 10 lobbyists for MLB had registered in Kentucky to lobby on "any issue relating to professional sports, sport integrity, sports wagering, taxation, or business development." The state, so far, has no MLB team.
In January 2019, it was reported that MLB was ensuring legislation is in place for the protection of the sports' integrity. The MLB and NBA together drafted a model bill calling, among other things, for integrity fees or royalties, which, at the time, were already reduced from 1% to 0.25% of the amount wagered. According to Bryan Seeley, senior vice president and deputy general counsel at MLB, it is only fair that they receive a small percentage as operators are expected to earn substantial revenues from sports betting. The integrity fees or royalties would be used to ensure umpires and players remain educated, betting activity is regularly tracked, and there is no manipulation of the outcome of games, particularly in the minor league and the college level where players are not as well-compensated.
To maintain sports integrity, leagues would be hiring additional manpower, developing software, hiring consultants, training players, employees, and referees. However, states, so far, have not promulgated any legislation that imposes integrity fees or royalties. It appears state lawmakers are not convinced by the 'integrity' argument, as illegal sports betting has long been prevalent in the country and other countries have long been offering legal sports betting on the leagues' games. Also, there is no integrity fee in Nevada, where sports betting has been legal for a long time. Seeley counters, however, that he "can't think of another industry where a class of people is able to make hundreds of millions of dollars off someone else's product, put risk on that party, and pay them nothing."
The MLB, along with the NBA and PGA Tour, is also seeking regulation that will require casinos to submit anonymized betting data, so the data can be analyzed for any signs of corruption or rigging, and report any irregularities. It is also calling for regulation that will allow leagues to comment on the types of bets that can be offered, as it does not want bets to be placed on individual plays and minor league games, where there could be higher chances of rigging.
Main Lobbying Action
There was news in December 2018 that the PGA Tour had joined forces with the NBA, the MLB, MGM, DraftKings, FanDuel, Monumental Sports & Entertainment, and Washington Nationals to persuade lawmakers in Washington D.C. to pass sports betting legislation that will make all parties happy. The league-operator alliance prepared and distributed a one-pager listing its proposed sports betting legislation. In September 2018, there was news as well that lobbyists for the PGA Tour were registering in Kentucky.
The league-operator alliance called for the following essential legislation components: that operators be required to "use official league data to settle bets" and that leagues be compensated with a "license fee" equivalent to 0.25% of the total amount wagered. The alliance argued that allowing leagues to have a direct financial interest in sports betting will be beneficial to the state as it will lead to a strong partnership among leagues, operators, and local government. A recent vote, however, resulted in the removal of the license fee from the DC bill. The alliance also sought "exclusivity zones for professional sports facilities" where retail establishments will be unable to operate a sportsbook without express consent from the facility's owner.
Main Lobbying Action
Similar to the NCAA, the NFL issued a statement, immediately after the Supreme Court's ruling, declaring its intention to lobby Congress for a law that will protect the interests of the league. Also, four lobbyists for the NFL registered in Kentucky sometime between July and August 2018 to influence sports betting lawmaking in the state. The registration documents of these lobbyists show that the lobbyists will engage in lobbying on "any issues related to professional athletics, sports wagering, taxation, or sports game integrity." The state, so far, has no NFL team. There was news as well that NFL lobbyists attended a House Judiciary Committee hearing in West Virginia in February 2019 to influence the establishment of the state's permanent sports betting rules.
After the Supreme Court ruled in May 2018 that states are free to legalize sports betting, the NFL urged Congress "to enact a core regulatory framework for legalized sports betting." Same as other major leagues, it called on federal lawmakers to establish a uniform code to minimize differences in legislation across states choosing to legalize sports betting. Unlike the NBA, MLB, and PGA Tour, however, the NFL is not seeking any integrity fee, royalty, or license fee. It explains it is focusing instead on consumer protection and game integrity. For integrity purposes, the NFL is calling for the mandated use of official league data in settling bets and the ability to control which types of bets sportsbooks can offer. It is also seeking intellectual property protection, consumer protection, and law enforcement cooperation.
At a committee hearing in West Virginia, the NFL made the following requests: NFL's yearly submission of employee list to the state to prevent the league's employees from betting in the state, NFL's ability to provide input on types of bets to be offered, and cooperation between state officials and NFL investigators in cases where betting rules were violated.
Main Lobbying Action
The NHL publicly calls for measures to standardize sports betting regulations across states, but unlike the NBA and MLB, which have spent significant sums of money hiring lobbyists, the NHL does not appear to be actively lobbying for sports betting regulation. It does not have lobbyists registered in states to influence lawmaking. It has so far concentrated instead on forging deals directly with gambling organizations, such as MGM Resorts International. The deals involve mostly the licensure of official league data and the use of team and league logos in marketing materials. NHL's strategy is to leverage its intellectual property, data, and other assets.
The NHL would like a congressional action or a collective agreement among states to make sports betting regulations consistent and uniform. The major leagues agree that, for consistency and efficiency purposes, there should be a single set of uniform rules instead of different laws in each state. On this front, a bill requiring the U.S. Justice Department to establish minimum standards has so far been proposed. While the proposed bill does not include the payment of royalties, it does not explicitly prohibit them either. NHL wants a cut of the sports betting revenue as well, but it clarifies that it is not about integrity but about intellectual property instead. NHL Commissioner Gary Bettman explains that "if you’re going to allocate for yourself to run a business on our intellectual property and the performance of our athletes and the platform that we put on for our games, we’re entitled to be involved in that.”