The Congressional hearing on sports betting, which was postponed in late June, is back on the docket.
Staff for the House Judiciary Committee on Thursday confirmed that the hearing “Post-PASPA: An Examination of Sports Betting in America” is slated for 10 a.m. ET on Sept. 27 before the U.S. House of Representatives House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations. News of the hearing was first reported by ESPN’s David Purdum.
A full list of parties testifying is not immediately available. The American Gaming Association confirmed that Sara Slane Senior Vice President of Public Affairs, will be testifying on behalf of the gaming industry. “Legal, regulated sports betting will enable increased transparency and enhance protections for consumers and betting and game integrity,” Slane said. “We look forward to discussing the U.S. gaming industry’s core principles for legalized sports betting with the Judiciary Committee at next week’s hearing.”
The post Players’ Claim of ‘Serious Consequences’ of Sports Betting Is A Hail Mary appeared first on SportsHandle.
Professional athletes are hungry for competition and compensation, and they’re now seeing the same thing as leagues, owners and gaming businesses. With an expansion of legal sports wagering taking root in the U.S., players want a nice piece of the sports betting pie.
But same as the leagues that employ them, players’ unions for the major professional sports organizations are seeking some cut of the revenue based on a faulty, self-serving premise. The leagues, of course, are asking for a direct cut of sports betting revenue based on a claim in two dozen states for a poorly-received request for a sports betting “integrity fee” or “royalty.” Now, the players’ associations are taking the position that legal sports wagering poses a pernicious threat to athletes.
As reported by ESPN’s David Purdum, Casey Schwab, Vice President of Business and Legal Affairs for the National Football League Players Association (NFLPA), said last week of expanded legal wagering: “There are serious consequences, particularly for the athletes. Because of those consequences, the athlete’s voice must be heard, particularly as we contemplate sports betting in the country.”
With The Number of Legal Sports Betting States Set to Increase, Now All of a Sudden Players’ Unions Change Claim ‘Serious Consequences’ Afoot.
Per Purdum, Schwab said the unions are concerned foremost with player privacy, data and their public perception — moreso than sports betting monetization opportunities. But now after years of being public figures, of having injury reports an accepted reality and of having reporters in their faces, for the players associations to now get amped up is ridiculous. When it comes down to it, nothing will be changing for the players or players’ unions in a world with expanded legal sports betting.
Wagering on games and specific player events has long existed in the form illegalwagering (a humongous market that will continue to exist), regular fantasy sports and daily fantasy sports. With a legal sports wagering expansion, it’s business as usual for the players. They will not be required to do anything differently. They want a piece of the pie — and naturally they would, business is business — but their argument is a Hail Mary and Aaron Rodgers isn’t at quarterback.
The argument is an extension of an April joint statement put out on behalf of all four of the major pro sports leagues. They wrote:
“The time has come to address not just who profits from sports gambling, but also the costs. Our unions have been discussing the potential impact of legalized gambling on players’ privacy and publicity rights, the integrity of our games and the volatility on our businesses.”
The unions are making an obvious emotional appeal.
The above “consequences” position boils down to the claim that fantasy sports and bettors already “dehumanize” athletes on social media after games, per NFLPA president Eric Winston, and that expanded legal sports wagering will exacerbate that.
Meanwhile, the widely accepted (and celebrated) reality is that fantasy sports and sports betting has helped explode the popularity of NFL games. There is empirical evidence on this front, and as a consequence, the engagement has helped generate incredible NFL TV contracts that increase every cycle (ditto for the other major U.S. pro leagues).
Numerous players have embraced fantasy sports and encouraged fantasy players to draft them, while some appear on fantasy-focused shows. Former Jaguars running back Maurice Jones-Drew and Chargers tight end Antonio Gates guest starred on FX’s “The League.”
Jones-Drew now co-hosts “NFL Fantasy Live.” And of course, the NFL provides its own platform for fantasy football and a plethora of fantasy sport content. If players truly have a problem with player privacy, data and their public perception, they should take it up with The Shield.
On the legal front, the notion that “publicity rights” would prohibit certain wagers or data usage on has been litigated in federal court in a fantasy sports context. The case reached the United States Court of Appeals for the Eighth Circuit, which found that information from sports contests is part of the public domain, and therefore that MLB team owners and the players’ union could not bar names and stats from being used commercially.
In the sports betting context, unions will try to distinguish wagers such “proposition bets” — for example the number of receptions Antonio Brown would have in a certain game. It’s a losing argument that will provide as much leverage as a single palm against a sled stacked high with 45-pound plates.
What about injury reporting and privacy? First of all, they were created for people wagering on sports. The league freely provides the information and if that’s now objectionable, unions can try to negotiate it away with the leagues. Nevada bettors, bettors in Europe and those wagering in other “offshore” jurisdictions where wagering is legal have been relying on this information for a long time. Why the sudden claims of privacy issues?
The availability of such information is part of being a public figure and a professional athlete. Injury reports are crucial information for fantasy sports, sports wagering, and likewise people who don’t give a damn about either. Before season-ticketing-holding Joe Fan shows up at Heinz Field, he wants to know if Ben Roethlisberger is going to be suiting up.
Players for a long time have accepted that certain health information, even the kind they probably would prefer keep private, is part of the deal. In the past, leagues have disclosed everything from weird injuries (it’s always MLB players, such as the Clint Barmes deer meat incident) to mental illnesses to quasi-health matters like domestic disputes.
Players have long gotten booed off the field for bad performances because they’re just bad performances — not because they failed to go “over” on a reception total or otherwise doom a wager. Everyone is subject from criticism at work. Getting booed is part of the game.
Ultimately, the Claim of “Serious Consequences” Is About Money.
“There needs to be a way for those of us, the players and the owners who create this game, to enjoy some of that revenue,” said NBA Players’ Association executive director Michele Roberts in an interview with ESPN’s Dan Le Batard in March. “We haven’t yet aligned ourselves to the extent we are, but I certainly don’t disagree that’s a conversation worth pursuing.”
And back to the NFL, said Schwab: “I look at the landscape for commercial opportunities, and I don’t see a pot of gold.”
[Also See: Pittsburgh Pirates Take Sports Betting ‘Integrity Fee’ to Whole New Level]
This conversation about sports betting needs to be had between the leagues and players during the next negotiations of their collective bargaining agreements. The NFL CBA discussion is expected already to be a contentious round of talks with a work stoppage regarded as likely.
The leagues may not find an overflowing pot of sports betting gold, but they are in the process of selling “official data” — player performance data, that is — to sports betting operators. There will be more partnerships and sponsorships to be had, TV contracts will become more valuable and the pie will invariably grow, and player salaries along with it.
Keystone State lawmakers set the table for legal Pennsylvania sports betting last October. But even though the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in May, Pennsylvania likely won’t be among the first wave of states to have licensees begin taking wagers, or it may trail along in the wake. It may be better to get things right than get them first, but the state’s 2017 enabling legislation created some formidable hurdles within Pennsylvania’s sports betting structure that key stakeholders have called to be revisited.
Since May 14, Delaware sports betting and New Jersey sports betting are live. Delaware began on June 5 at three state casinos/racetracks, and New Jersey began on June 14 at Monmouth Park and at the MGM-owned Borgata in Atlantic City. Mississippi casinos will start accepting legal sports bets in late July. West Virginia has just rolled out its sports betting regulations. All of West Virginia’s five casinos appear to be on track to offer sports betting as soon as the regulations go into effect. In Mississippi, at least five operators had applied for sports betting licenses as of early July and the expectation was that every casino in the state would submit an application.
Rhode Island passed a law legalizing sports betting in late June and the new law includes an explanation of how sports betting profits will be split between the state, gaming operators and the state’s two casinos, both of which will offer sports betting. The state lottery will run sports betting in the state. So, where is Pennsylvania in all of this? Going nowhere fast. Zero Potential Licensees Have Applied for a Pennsylvania Sports Betting Certificate, While Mississippi and West Virginia Have Seen Multiple Applicants.
The Pennsylvania Gaming Control Board (PGCB) rolled out temporary regulations earlier this summer, but not a single operator has applied for a sports betting license. Potential gaming operators have not been shy about telling the state that it has made the prospect of doing business there all but impossible.
Pennsylvania’s law calls for a whopping $10 million application fee and a combined 36 percent taxrate (34 percent state plus 2 percent local). For comparison, that’s 100 times the initial licensure fee of $100,000 in both West Virginia and New Jersey. On the tax front, New Jersey has an 8.5 percent tax on sports wagering revenue at casinos and 13 percent for online wagering, and West Virginia will levy 10 percent on both. Nevada’s rate is 6.75 percent.
“PNG first notes that the $10 million license fee and 36% tax rate established in the Gaming Expansion Legislation are the highest in the world and may make it impossible for a casino operator to make any return on its investment capital,” Penn National Gaming vice president and general manager Daniel Ihm wrote in his company’s response to the state’s temporary regulations. “Based on the tax rate and the fact that, on average, 95 percent of sports wagers are returned to winning bettors, PNG estimates it could lose approximately 40 cents on every $100 wagered on sporting events.”
Penn National owns the Hollywood Casino at Penn National Race Course in Granville, Penn. The company declined to expand on its written comments.
Potential Operators Have Called the Sports Betting Landscape in Pennsylvania ‘Not Economically Feasible’ and Say They Will Lose Money.
In addition, Greenwood Entertainment, which owns the Parx Casino in Philadelphia, said that requiring a slot machine licensee to pay the $10 million fee is “not economically feasible” while the National Football League — an unlikely ally — also weighed in, saying “the statutory operator licensing fees of $10 million and 34 percent tax rate on gaming revenue may render legal market participants unable to effectively compete.”
The PGCB does not control the tax rate or application fee — that is strictly the purview of lawmakers.
“We don’t legislate, we regulate,” Doug Harbach, director of communications for the Pennsylvania Gaming Control Board, told Sports Handle. “Our job is to put together the regulations and let the chips fall where they may.”
The PGCB is doing just that. The temporary regulations have been open for public reply for some time, and the board’s goal was to pass the temporary regulations — which could stand for up to two years — during one of its two summer meetings, the next of which is July 18.
In addition, the PGCB on Wednesday officially began accepting applications from potential sports betting operators (for example, Paddy Power BetFair or FanDuel, which may run a sportsbook on behalf of a casino), manufacturers and suppliers of equipment or products that may be used in sports betting.
According to Pennsylvania law, there is no deadline to apply for one of the state’s 13 sports betting licenses — one each for the 12 existing casinos plus one for a new property that will be opened in Philadelphia. But it does seem curious that while operators in other states are moving briskly, things in Pennsylvania are stalled.
“When I ask internally with the people who handle in our licensing area, there doesn’t seem to be a lot of concern, it’s just a matter of timing,” said Harbach. “We haven’t approved all of the regulations yet, so I think there is some holdup on that. My understanding is that there are still some casinos that are putting together partnerships before they petition us.”
Any Unissued PA Sports Betting Licenses Will Go Unused — Only Licensed Brick-and-Mortar Casinos Can Apply.
And what happens to the licenses if all casinos don’t apply for them? According to the law, they would go unused, as the licenses are designated strictly for casinos. An operator that does not have a brick-and-mortar location cannot apply for a license.
Casino companies like Greenwood Entertainment and Penn National have been very direct about the situation in Pennsylvania. The American Gaming Association, which has members across the country, won’t comment on any state specifically, but its public stance is that states with high taxes and fees ultimately don’t make good business partners.
“States and sovereign tribal governments should focus on the customer experience and empower licensed, regulated operators to offer a competitive product that protects consumers,” the AGA said in a statement. “High tax rates hinder the legal market’s ability to compete with, and shut down, illegal sports betting operators who pay no U.S. taxes and are largely unregulated.”
That said, it is impossible to know if any of Pennsylvania’s existing casinos will bite the bullet and pay the $10 million application fee. As many have the opportunity to open sportsbooks in other, friendlier locations, it seems unlikely, though it would only take one casino making application to change the landscape.