Sports Leagues Will Plead With the Federal Government for "Integrity Fees" from Gambling

The Supreme Court ruling this morning that sports gambling will be up to the states was a long time coming. Betting businesses and the leagues have all been bracing or even machinating for this day for some time. The next wave of news will feature the purportedly competitor leagues banning together in solidarity for the federal government to guarantee them a cut of the booty.

You can see this coming in these statements:

So that’s the three biggest sports in America, all weighing in on the topic, with the NFL and NBA explicitly calling for federal legislation (MLB’s statement mentioned supporting legislation between states and the gambling operations and governing bodies). An aside here: A fun thought exercise would be to look into times the 90+ owners from these three sports have decried federal regulations of their other businesses. I’m gonna go ahead and guess that it would be a lot.

Anyways, the other thing you’ll notice is that all three of them used the word “integrity” in their statements. This is a reference to the “integrity fee” that they are trying wedge into state bills. Their argument presumes that the amount of betting will rise substantially enough that they’ll have to up their scrutiny to make sure games aren’t fixed.

As Mike Florio pointed out in a story about West Virginia’s bill, Nevada has had legal sports betting for some time and they do not pay an integrity fee to the leagues. The NFL spent millions of dollars trying to figure out if Tom Brady deflated footballs, and wound up with results that were inconclusive at best. The leagues already have every incentive to make sure their sports are on the level.

There will be a lot to iron out, but even as I sit here making fun of the owners for courting federal regulation when they want a cut of the action, I agree that a core national framework would be most helpful here. This belief is also rooted in a selfish motive. Because I cover national sports, I’d like there to be national penetration from brands in the space, as that will create more advertising and sponsorship opportunities in the sports media business.

The integrity fee, though, seems like a bit much. The leagues are going to benefit greatly from legalized betting, even if they don’t get a cut from the states. This is speculation, but I’d expect a viewership spike. But even if there’s not, the owners will have considerable direct sponsorship and marketing opportunities, and the fact that their broadcasters will as well will push rights values up.