New York mulls paying league fees for sports betting

[August 08, 2018]  By James Odato

SARATOGA SPRINGS, N.Y. (Reuters) - A top New York state gaming official said on Tuesday that paying fees to professional sports leagues is under consideration by state regulators who are drafting rules that govern betting.

During a panel discussion at the annual gaming industry conference in Saratoga Springs, one of New York's gaming commissioners, Peter Moschetti, said "all" components of a state senate bill introduced this year are under consideration. This includes the so-called "integrity fee" which sports leagues are asking for to help police against cheating.

If New York adopts that kind of fee structure it would go against current practice by other states which do not pay the fee.

A May ruling by the U.S. Supreme Court allowed for sports betting to expand outside of a limited number of states, such as Nevada, and set off a scramble by state lawmakers nationwide to get operations up and running in the hopes that extra gambling revenue would bolster their finances.

Panelist John Bonacic, chairman of the New York Senate's gaming committee, said he hoped his sports gambling bill introduced in March would set the blueprint for state regulators to use in New York and elsewhere.

His plan calls for an 8.5 percent state tax on the revenues from betting on games and a 0.20 percent fee paid by casino operators to major sports leagues. This would make New York one of the only states to go along with league requests for compensation.

Bonacic said he thinks the New York market is good for $500 million in legal sports bets at casinos each year - about twice Nevada’s sports book revenues – generating $41 million to state government.

The plan is "reasonable" for casinos and would pay a fair sum for integrity monitoring by leagues, said Laila Mintas, a professor of global gaming law at Columbia University and deputy president of Sportsradar Group, which sells rights to league data that helps sports books set odds.

Panelists discuss sports betting at the annual Saratoga Institute for Equine Racing and Gaming Law Conference in Saratoga Springs, New York, U.S., August 7, 2018. REUTERS/James Odato

But casino operators are resisting paying out fees to the sports leagues, said one panelist.

Seth Young, executive director of online gaming at Foxwoods Resort Casino in Connecticut, said casino operators average about 5 percent margin on the sports book operations and the fee to the leagues is unnecessary.

Regulators should do the integrity monitoring not the leagues, Young said during the discussion. The leagues will benefit from sports betting because casinos will promote the games, he added.

National Basketball Association senior vice president Dan Spillane said pro basketball, the Professional Golf Association and Major League Baseball each want a quarter of a percentage point integrity fee. The proposed fee is a compromise from the 1 percentage point he initially sought.

Spillane said the fee would add about $7 million a year to the NBA from New York sports betting book operations. That additional fee revenue could help expand the salary cap for NBA teams.

"Leagues should be viewed as partners not adversaries," he said. "Without sports there is no sports betting."

(Reporting By James Odato; Editing by Daniel Bases and Diane Craft)

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