NBA and MLB are Cool with Regulated Sports Betting…and 1% of the Action

As the US Supreme Court inches closer to making a decision on whether or not to legalize sports betting in the United States, we’re learning more about what it would take to get professional sports leagues on board with the plan. In the case of the NBA and MLB, all it’s going to take is a mere one percent of the total sports betting handle.
Representatives of the leagues brought that demand to life at a hearing in front of the West Virginia State Legislature that was looking at what regulated sports betting might look like in the state. Attorney Scott Ward, who represents both leagues in this matter, reiterated their desire to take one percent off the top for something he calls an, “integrity fee.”
The integrity fee would, supposedly, be used to help monitor potential fraud such as game fixing. It’s an idea that the leagues have proposed before and it’s one that doesn’t make a whole lot of sense.
For starters, regulated markets act as their own barrier against fraud. For example, regulated sportsbooks regularly monitor this type of fraud themselves. Their interest in preserving the integrity of the game is equal, or greater, than that of the leagues because they’ll lose money, and credibility, on fixed games also.
The leagues’ demands for a pound of flesh also underscore a fundamental misunderstanding of how much revenue sportsbooks really make. After all, with a record handle of over $158 million on Super Bowl wagers this year, Las Vegas sportsbooks only took about 1.8 percent of the action. Margins like that are unsustainable when outsiders are chipping away at it for the sake of “integrity.”
A representative for the state lottery commission dismissed the idea of handing over one percent of the handle to the leagues by pointing out that that one percent could actually cost more than the ten percent tax the state was already proposing.
In short, there’s still a lot of work to be done before the United States is ready for regulated sports betting.