Yahoo Finance NBA holds all the cards in sports betting deal with MGM
At a glitzy press conference on Tuesday at the St. Regis hotel in Manhattan, NBA Commissioner Adam Silver and MGM Resorts CEO Jim Murren announced a deal that makes MGM the “first official gaming partner” of the NBA.
So what does that mean, exactly?
For MGM, not all that much.
The fourth-biggest U.S. casino company by market cap gets to be the first casino partner of a major American pro sports league. It also gets to use NBA and WNBA names, logos, and proprietary data—but not exclusively.
As Silver said at the press conference, MGM CEO Murren “understood that we also would be in the business of licensing our intellectual property, specifically our real-time data feed, to other casinos as well.” As the NBA’s press release says in no uncertain terms, MGM “will use official NBA and WNBA data and branding, on a non-exclusive basis.”
In other words, additional casinos are welcome to make a similar deal with the NBA—and they likely will. Silver believes that the MGM deal proves, “that indeed we should be compensated for our intellectual property and for our official data.”
The only exclusive part for MGM appears to be the title of “first official gaming partner.” That privilege, according to ESPN, was worth $25 million over three years.
Still, MGM can now get off the ground and running, before its competitors, with NBA real-time data in its gambling products in every state that moves to legalize sports betting.
This is possible after the U.S. Supreme Court in May struck down PASPA, the federal law that prevented states from allowing sports betting. So far, only Delaware, New Jersey and Mississippi have done it, but multiple states have introduced bills to legalize, and are expected to pass them this year.
MGM is already moving fast: MGM-owned Beau Rivage Biloxi became the first sportsbook to launch in Mississippi on Aug. 1, and MGM will launch online betting at the Borgata in Atlantic City this month, making it the first casino operator to launch online wagering outside of Nevada, post-SCOTUS decision.
There is still more to unpack about this deal. For starters, it has implications for third-party data providers to the NBA, such as Sportradar. A reporter asked Silver if Sportradar and other such partners, “get folded into this partnership.” The answer was a clear no.
NBA deal with MGM sounds potentially not great for Sportradar. Silver: "Our deal with Sportradar is only operative outside the US. So the official data feed that will be provided to MGM will either come directly from NBA or from a partner yet to be named."
— Daniel Roberts (@readDanwrite) July 31, 2018
Another hot point of contention around legalized online sports betting in the U.S. has been the concept of “integrity fees”—cuts that the leagues would get on every bet placed on their games. The NBA, Major League Baseball, and the National Hockey League believe they deserve such fees; the NFL has shied away from them. For now, states that have legalized sports betting have not indicated they will support the integrity fees.
The MGM deal does not appear to negate the integrity fees; it is separate, but related. Silver said the NBA is still, “very focused on integrity provisions to protect our fans… We’re still having our discussions with our states about so-called integrity fees.”
—
Daniel Roberts is the sports business writer at Yahoo Finance. Follow him on Twitter at @readDanwrite. He also hosts the sports business podcast Sportsbook.
Read more:
NFL stands apart from NBA, MLB on sports betting ‘integrity fees’
Supreme Court strikes down sports betting ban: what happens next
FanDuel and DraftKings race to open sports betting operations
MLB commissioner: ‘We are reexamining our stance on gambling’
