MGM Resorts International Becomes Official Gambling Partner of the NBA

The league that once fought tooth and nail against New Jersey’s sports betting legalization effort has now reached an agreement to make MGM Resorts International the official gambling partner of the NBA and WNBA.

MGM Chairman & CEO Jim Murren and NBA Commissioner Adam Silver announced the multi-year deal on Tuesday. Financial terms were not disclosed, but a press release explains the deal will grant real-time data to MGM Resorts International to facilitate its growing sports betting presence in the US and give MGM rights to use NBA logos, imagery and highlights.

The NBA and MGM will also collaborate to more effectively combat gambling-related corruption and protect the integrity of sports. MGM and the NBA will also promote one another across their various digital assets such as, the NBA App and MGM’s sports betting platforms.

Here’s Adam Silver from the press release:

“As the landscape for sports betting in the U.S. continues to evolve at a rapid pace, MGM Resorts is a proven gaming leader for us to work with on this groundbreaking partnership. Our collaboration will result in the best possible gaming and entertainment experience for consumers through the use of accurate, real-time NBA and WNBA data, and our collective efforts to maintain and enhance the integrity of our games.”

And here’s Jim Murren:

“The NBA has always been an innovator at the forefront of sports evolution, and MGM Resorts is thrilled to partner with the league to revolutionize sports betting in the United States. Integrating the NBA’s assets and having official NBA data showcased across the MGM Resorts platforms will provide us with a distinct advantage and instill more confidence in knowing that our data is directly from the NBA.”

The announcement comes just a day after MGM revealed another major piece of news. On Monday, MGM and international online gaming giant GVC Holdings announced each company will invest at least $100 million in a US-based joint venture targeting the USA sports betting market.

In what we can now see as obvious foreshadowing, GVC Holdings on Monday said one of the advantages MGM brings to the table is positive relationships with key sports teams and venues.  With MGM now tying up with the NBA, GVC Holdings should be quite pleased with its choice of partner for the US sports betting market.

NBA Taking a Different Approach

The NBA has just about come full circle since its days suing former NJ Governor Chris Christie over legislation proposing to legalize sports betting at state casinos and racetracks. The NBA, along with the NCAA, NFL, NHL and MLB, won early victories in the fight against New Jersey’s sports betting efforts, but ultimately New Jersey prevailed some six years later after the Supreme Court struck down the federal sports betting ban this past May.

To be fair, the NBA has long had a complicated history with sports betting. The league is understandably sensitive to the topic considering embarrassing and very public betting scandals such as the Tim Donaghy refereeing scandal that broke in 2007.

The league’s opposition to sports betting was absolute up until about 2014. The wheels of change began turning that year when NBA Commissioner Adam Silver penned an op-ed for the New York Times arguing that the United States should end the prohibition of sports betting in favor of legalizing, regulating and taxing it.

Silver’s op-ed was a major departure from the official NBA position and was the subject of our first post ever published here at The NBA remained officially opposed to sports betting legalization, but Silver’s op-ed made it clear changes were brewing under the surface.

The NBA officially changed course in late 2017 when it announced it would begin lobbying Congress in favor of sports betting legalization and regulation. This at first looked like quite a contradictory stance considering the NBA was still embroiled in a lawsuit seeking to stop New Jersey from implementing sports betting.

However, the NBA seemed to have finally accepted the reality that sports betting was going to continue to exist whether or not the law changed. NBA Senior VP and Assistant General Counsel Dan Spillane explained it this way at the time:

“Our view has been that if it’s illegal [at the federal level], that’s not the right way to start off legal sports betting in the United States — under a cloud, doing it in violation of federal law. At the same time, we agree with New Jersey on the ultimate policy outcome: that having legal, regulated sports betting in the United States is the best place to end up. The disagreement is just on how to get there.”

More Than One Way to Skin a Cat

Beyond simply accepting the reality of changing laws, the NBA may also have decided to embrace sports betting in an effort to at least retain some control over the activity and to collect substantial “integrity fees” from operators.

In the months leading up to the Supreme Court decision, league officials made appearances in legislatures across the country seeking to influence lawmakers into adding a sports integrity fee into legislation being drafted and introduced at the time.

For example, the NBA convinced lawmakers in Indiana to modify draft legislation to include an integrity fee of 1% of all betting handle payable to the major professional sports leagues. The NBA has at times justified the need for an integrity fee as necessary to offset the increased costs of protecting the integrity of the game and at other times as a royalty fee owed to the league in exchange for sports betting operators profiting off NBA games.

A one-percent fee doesn’t sound too bad until we consider this figure would come off the top of total sports betting handle. The average sportsbook in Vegas tends to only keep about 4-5% of total betting handle as revenue – and that’s before paying all other costs such as maintenance, employees and so on. A 1% integrity fee on total handle would be the equivalent of taxing net revenue at more than 20%.

To date, the league has had no success in getting an integrity fee added to bills passed in any of the states that have legalized sports betting. Adam Silver said the league is still pushing for integrity fees in states that are considering legislation, but acknowledged that there’s more than one way to skin a cat:

“[T]o me, there’s many different ways to skin the cat, so to speak; and we decided here, rather than sort of re-litigating the integrity fee, which is still being hotly discussed state by state, let’s find an approach which is unique to us and where we both feel that we’re being fairly treated.”

The American Gaming Association (AGA), which represents casino interests in 40 states, was pleased with the news of the MGM-NBA deal. AGA Senior Vice President for Public Affairs Sara Slane said this:

“Sports betting deals should be done through contracts — not statutory obligations. Today’s announcement highlights the symbiotic partnership between casino gaming companies and sports entities.”

This is likely just the first of more similar deals coming down the pipeline now that sports betting legalization has all the momentum behind it. If the leagues are unable to convince legislators to send them money via sheer force of government power, deals like this offer an easier and more palatable alternative for everyone involved.

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