Industry Reports

MLB Insists Gambling Companies Must Pay Integrity Fee on Sports Betting Revenue

Major League Baseball (MLB) and the casino industry seem to have established firm positions related to a proposal made by the league, under which MLB would receive a portion from wagers placed on sports events. The proposal was rolled out by the League after the UK Supreme Court’s ruling to lift a federal ban on sports betting earlier in 2018.

Last night, representatives of both industries defended their beliefs related to money wagered during a panel at the top trade show for the casino industry in Las Vegas. Previously, professional sports leagues, including MLB, have insisted to get a percentage of the wagers, but so far the casino industry has vigorously opposed.

The Executive Vice President of gaming at MLB, Kenny Gersh, explained to casino executives that the so-called “integrity fee” of 0.25% is essentially a royalty that should be paid by the casino operators in case they are going to expand their presence on the local sports betting market as well. According to him, a partnership between professional sports leagues and casino companies would be a good thing, especially in terms of “fairness”.

Still, professional sports leagues have so far failed to convince any state to implement the integrity fee into their laws. Even the state of Nevada, which has been offering sports betting operations for years now, does not pay such a fee.

Gambling Operators Take All the Risks, Claims AGA Senior Vice-President

As previously revealed by Casino Reports, in May 2018 the US Supreme Court decided to legalize sports betting in the country by lifting the ban imposed on the industry by the Professional and Amateur Sports Protection Act of 1992 (PASPA). Since then, a number of states have already opened their gambling sectors for sports betting.

After the ban on sports betting was finally lifted thanks to the US Supreme Court’s ruling, professional sports leagues made a push, requiring a chunk of the expected sports betting revenue, but their efforts have remained fruitless so far. Mr. Gersh explained that the so-called integrity fee is required from a fairness perspective, as after all, it was professional sports leagues and their sports and events which made it possible for gambling operators to generate money.

The American Gaming Association (AGA) has been against the implementation of the 0.25% integrity fee. The Association has explained that such a system would not be “financially viable”. According to the senior vice-president of public affairs at the AGA, Sara Slane, the gambling industry is actually taking a risk by expanding into the newly-opened sports betting market, so professional sports leagues should not be given the chance to simply draw benefit from that without any of the risk associated with the process.

Ms. Slane further explained that it was not fair for gambling operators to take all the risks and sports leagues only to benefit on their backs.