NBA Defends Right to ‘Integrity Fee’

The National Basketball Association issued a statement defending its right to a cut of the action in the form of a royalty or integrity fee in state or federal sports-betting regulation bills.

NFL wants paid for data, broadcasts

One of the issues that persists in the wake of the U.S. Supreme Court’s striking down the federal prohibition on sports betting in the Professional and Amateur Sports Protection Act (PASPA) is the desire of the professional sports leagues to share in the revenue windfall.

The National Basketball Association continued its effort to lobby for ‘integrity fees,” or a cut of the action on wagers involving NBA games, in a statement last week. The statement was issued in response to a call by New Jersey’s state Senate president on all 50 states to reject such fees, which he says constitute nothing more than a money grab by the leagues.

“We will continue to collaborate with states on a regulated framework that ensures the protection of our fans and the integrity of our games,” NBA spokesman Mike Bass told the Associated Press. “As the intellectual property creators for this content, our games serve as the foundation for legalized sports betting, providing casinos the ability to earn revenue off our games, while we bear all of the risk that accompanies sports betting and will incur additional expenses to expand our existing compliance and enforcement programs.

“As a result, we believe it is reasonable for casinos to compensate the NBA with a small percentage of the total amount bet on our games.”

Major League Baseball said in a statement the same day it will focus on “developing meaningful partnerships” with state governments and betting operators. Representatives of the NHL and the NFL did not respond to requests for comment, according to the AP.

New Jersey and Nevada are two of the states flatly rejecting the leagues’ rights to any portion of sports wagers, but other states have indicated a willingness to negotiate some sort of fee.

National Football League Commissioner Roger Goodell has called on Congress to pass a bill providing for federal oversight of sports wagering, which would include some provision for compensating the leagues. However, unlike the other leagues’ push for integrity fees. “The NFL doesn’t think an integrity fee, a 1 percent fee, is in anyone’s interest,” ESPN’s Don Van Natta said last week on the Outside The Lines program.

The NFL, however, is pursuing payments for the rights to its own data and video footage, which legal betting operator will need to set lines and prop bets.

According to Legal Sports Report, the league’s rights to copyright the broadcast were affirmed by the U.S. Solicitor General, but only as far as the broadcasts themselves; they cannot copyright the actual sporting performances.

According to the report, the Solicitor General filed an opinion with the Supreme Court that while the broadcast of a sporting event is copyrightable, the events on the field do not constitute a performance, meaning they are outside the scope of things that can be copyrighted:

“When a television network broadcasts a live sporting event, no underlying performance precedes the initial transmission—the telecast itself is the only copyrighted work.”

“We have spent considerable time planning for the potential of broadly legalized sports gambling and are prepared to address these changes in a thoughtful and comprehensive way,” Goodell said in a statement, calling on Congress to “enact uniform standards for states that choose to legalize sports betting.”

Meanwhile, Tim Donaghy, the former referee at the heart of the NBA’s most notorious betting scandal, said in an interview with CNBC last week that integrity fees at this point are a “joke.”

“(The leagues) are now saying they need this money to police the game that they should have been policing at the highest level all along,” Donaghy said. “I’m not too sure how they can say they need the money to protect the integrity of the game when that should have been one of the top priorities before gambling passed. So it’s kind of confusing and comical at the same time.”

Donaghy also predicted that legal sports betting will not curb business for illegal bookies.

“I think people are still going to go to the local bookies for a lot of reasons,” he said. “They are going to want to avoid paying taxes when they win and stay away from paying any fees to the leagues.

“People think that these underground bookies are going to go away. I think there’s going to be more underground bookies because now gambling looks legal, but it’s going to be illegal to take bets, but I don’t think they’re going to crack down on it as hard as it has in the past.”