The state of New Jersey was finally rewarded for its efforts to legalize sports betting when the Supreme Court of the United States repealed PASPA last week. It was determined that the 1992 federal ban on sports betting was being unfairly applied to states other than Nevada, and thus sports betting became a state level issue.
American professional sports organizations, most vocally the National Basketball Association and Major League Baseball, have been pushing hard to work “integrity fees” into prospective betting-related state legislation.
Even though the leagues have no agreements to receive their “cut of the action” from Nevada, where a legal sports betting market exists and has flourished for decades, they believe they’re entitled to compensation now that they’ve lost the fight over sports betting at the federal level.
Now that New Jersey has achieved victory, its sending a message to the rest of the country to reject attempts by sports leagues to make money for essentially nothing.
The current mouthpiece of this message is New Jersey Senate President Stephen M. Sweeney who released a letter to Governor Phil Murphy decrying the leagues' attempts to get paid in order to play honest games.
In his scathing takedown of the sports leagues' greedy logic, Sweeney makes some of the best points those against the fees can articulate. It serves as a precise breakdown of how and why exactly the leagues’ claims that they should be compensated as holders and distributors of “intellectual property.” strike many as unprecedented.
Sweeney begins by painting New Jersey efforts as “an arduous battle” in which the state “suffered loss after loss” and spent “over ten million dollars in legal fees and hundreds of millions of dollars in tax revenue.” But having achieved victory with the repeal of PASPA, the state can finally carry out “the will of its people.”
The senate leader makes it clear that the leagues had fought New Jersey all the way with all their resources to prevent legalization, and accuses them of slinking in after their defeat in order to make ‘the fast buck’ and to ‘get something for nothing.’”
“Essentially, the Leagues are asking to be paid to allow games to be played fairly. Ironically, they are calling this extortion attempt an ‘integrity fee’ even while fully aware that providing participants a stake in the volume of betting would amount to what could be called an “anti-integrity” fee.
To give a little more background, Sweeney is directly referencing specific attempts by the NBA and MLB to collect one percent to .25 percent of every legal wager placed. Never mind that this would severely hamper the potential profits of states and simply serve as yet another source of income for the leagues.
“The Leagues should not in any way profit from sports wagering that finally has been legalized notwithstanding their opposition in order to purportedly protect the integrity of the games and reduce the suspicion from fans when outcomes result in more betting.”
A most entertaining part of the letter digs into recently incurred wounds by sports fans and some doubling down on deep, long-held criticisms of the sports leagues relationships with big markets. While not thoroughly endorsing market-based conspiracy theories, Sweeney has a bit of fun with the hypothetical future in which the sports leagues would receive greater levels of compensation if big markets win.
“There will be increased skepticism when the New England Patriots defeat the Jacksonville Jaguars in a game in which they were being thoroughly outplayed and questionable calls are made at the end of the game. Eyebrows will be raised with the New York Knicks or Los Angeles Lakers make the NBA finals. Or when the Yankees play the Dodgers in the World Series, or America’s Team – the Dallas Cowboys – returns the Super Bowl.
This particular take pokes at a recent high-profile NFL postseason result that many fans are skeptical of especially in light of the Patriots’ exposed involvement in a disproportionate number of integrity-based scandals.
It plays to beliefs held by a lot of fans of smaller market teams who oftentimes feel their teams get "screwed" or the "short end of the stick" in their treatment by the leagues and referees. By playing a little bit to that crowd, Sweeney touches a nerve connected to a theme that exists in many consumers' minds when they watch sports.
More importantly, he makes a very palpable and tangible point that compensating the leagues would be “providing financial incentives” for them “to make sure that big market teams with large fanbases win the big games because it would increase the betting volume and income for the Leagues.” Sweeney believes that this “would do the exact opposite of increasing the public’s perception of the integrity of sports contests.”
While this point does take a few leaps in its assumptions, it does poke fun at and attempt to lay bare the idea of the leagues holding integrity for ransom. Rather than do everything it can to present a fair and balanced product regardless of whether sports betting is legal or not, it appears to claim that it needs extra incentive to do so.
Considering illegal betting has been rampant for as long as many sports fans have been alive that assertion brings up many questions. At the end of the day, however, thanks to the triumph of New Jersey, it’s the leagues that are grasping at straws.