OT: NBA wants 1% of all legal gambling wagers

Submitted by SpinachAssassin on January 24th, 2018 at 3:38 PM

Yahoo! Sports link

The NBA wants a 1% cut of all wagers (an "integrity fee") in a push for legalized sports betting. Former commissioner David Stern was against legalized sports betting and current commssioner Adam Silver changed that stance in a 2014 NYT op-ed.

A quote from Silver in the Yahoo! article states there is a great deal of 'in-play' betting - quarter scores and other outcomes not requiring the whole game - and thus there is more engagement with the game. Thus legalizing betting should be a rational step.

Personally it reinforces my belief that NBA management is far more sophisticated than their NFL counterparts in willing to push boundaries (tech, global, etc.). I could see the NBA setting up some sort of NBA League Pass/NFL Red Zone hybrid channel that allows you to bet in-game from your own home on pretty much anything. It would be similar to how sports leagues try to resell tickets on their own exchanges instead of a StubHub.

That said, this still feels odd to me. The NBA has its reputation with gambling due to Donaghy and the NBA taking revenue from unlikely betting outcomes when they control all parts of the process (e.g. refs) seems like a conflict of interest waiting to happen. Maybe I'm old though and not woke enough.

 

Comments

SpinachAssassin

January 24th, 2018 at 4:00 PM ^

Because yes, I agree - they theoretically wouldn't care about the outcome. And to take it further, they aren't betting on one side, but rather any/all outcomes, so it should be fine.

Yet if you have ownership of all parts of the process, and a random/low probability event happens with questionable calls included, and the NBA is making money off of that, it feels like the integrity of the game may be questioned.

JHumich

January 24th, 2018 at 4:14 PM ^

There is a point at which the primary spectacle shifts to wagering/unlikely outcomes (big or small) and not so much the best basketball on earth.

In the end, I think they make more money but shift further along the continuum away from sport entertainment and toward tabloid entertainment.

Pairs nicely with ESPN though!

TrueBlue2003

January 24th, 2018 at 4:32 PM ^

off low probability events or questionable calls (since they don't care what happens). They aren't betting on an outcome and would not be affected at all by any outcome if they're just making 1% of all bets made.  Their only incentive would be to have more bets made and that depends on the integrity of the product/randomness of the outcomes.  Hence on a pure revenue sharing model, the NBA would have strong incentives to make sure everything was fair such that bettors have confidence the market isn't being manipulated.

MaizeAndBlueWahoo

January 24th, 2018 at 6:11 PM ^

Toward what, though?  I mean, they have ads on the jerseys now, and Bill Simmons (probably the NBA's greatest champion in the media, at least during the 00's) constantly wrote about the league's appeal as a soap opera just as much as for the on-court product, so it's not like the purity of the league as merely a conveyor of elite basketball is at stake here.

Jmer

January 24th, 2018 at 4:34 PM ^

This is an assumption but I am assuming that there are a whole lot more people/fans who would bet on a Lakers game than a Trailblazers game or who would be on a Lebron game rather than a team without big name stars. This probably goes any NBA team with a large fan base. (Knicks, Celtics, etc.) So, for example, if the Lakers and the Blazers were to meet in the playoffs, there would be incentive for the NBA to keep the Lakers alive.

Robbie Moore

January 24th, 2018 at 4:40 PM ^

they're limiting themselves to only 1%. Seems they could set up their own Website with exclusive use of NBA trademarks. Hard to bet on the Knicks if the sports book can not say Knicks (I suppose the books could say New York prodessional basketball team but that is really clunky). Easy to do. And they would get 100% of the profits. 

Suppose of the NFL gets its head out of its ass and does the same? They could control gambling and fantasy leagues through trademark enforcement and run it all out of a mega website. Link the NFL Red Zone to it and voila! NFL teams are worth at least twice what they are now. Probably a lot more. You think Jerry Jones is insufferable now...

wolverinestuckinEL

January 24th, 2018 at 5:05 PM ^

Likely for the same reason the BTN doesn't broadcast every big ten football game.  Their network doesn't reach enough viewers for them to take over broadcasting exclusively, so they still sell the rights to other networks that have more reach.   The NBA knows it would lose bettors and subsequently viewers if they took the action away from Vegas.

TrueBlue2003

January 24th, 2018 at 3:50 PM ^

have been working for a third-party that had made a bet or was making actual bets?  If the NBA is just the bookie making the market they don't really care about the outcome (unless they've missed badly on making a market).  They actually have a lot of incentive to keep it fair so there are buyers and sellers that believe the outcomes aren't being manipulated.

And as always, it's all about the money.  If it's another source of revenue, of course they'll pursue it if they don't think there would be any negative/unintended consequences.

M-GO-Beek

January 24th, 2018 at 3:53 PM ^

Clear conflict of interests abound.  Taking 1% is great for the bottom line, but anyone who thinks bigger markets/star players are favored now, just gets added fuel to suggest the NBA will benefit from "more interesting" match ups.  Already happens with TV, but throw in an extra few tens of millions from betting and this preception will only get worse.  Lastly, I like how they take zero ownership of the gambling problems that this could result in.  They should at least throw in a 0.01% pay back to the states for gambling addiction funds.

TrueBlue2003

January 24th, 2018 at 4:46 PM ^

bettors do not care one bit about "interesting matchups", they care about poorly priced matchups.  Nothing the NBA could do to it's product would make it more appealing to bettors other than making sure the product is random and not manipulated by the market (hence aligning league interests with bettors).

Besides, what do you think this is going to do, cause them to schedule the Cavs v Warriors every week?  Scheduling is pretty set in stone.  No reason anything would change in those respects.

But you do bring up a good point that if people think the NBA cares or would have a conflict of interest, then the integrity of the game might be compromised amongst non-bettors enough to scare those fans away and offset any betting revenue increases.

Your second point is excellent.  If they are going to make money off something that is addictive and super counter productive, they should be contributing to treatment of the problems it can cause.

M-GO-Beek

January 24th, 2018 at 4:52 PM ^

Bettors completely care about how interesting a match up is.  Which do you think would have more money bet on it; Pats-Eagles Superbowl or Jacksonville-Minn Superbowl?  The more interest in the game, the more money bet by the general public.  The sharps don't care about general interest, just undervalued money lines.  But how do the imbalances in the money lines get made? By having a bunch of average Joes drop $100 on 1 team becuase they want to be more interested in the game.  If the NBA gets 1% of everything, they absolutely are pulling for Lakers-Knicks Finals, not Jazz-Hornets.

TrueBlue2003

January 24th, 2018 at 7:04 PM ^

a matchup is.  BUT,  you're correct that people who are interested in a game (as fans) are (slightly) more likely to bet on that individual game, yes.  The effect is very small though.

Highest Super Bowl ever was Broncos-Panthers, and the factors cited (link) there were: Michael Lawton, a senior analyst for the Nevada State Gaming Control Board, says the biggest factors behind the record handle for Super Bowl 50 were the new mobile apps, in-game wagering, and an improved economy.

Interestingly, also cited was the fact that there was a 5 point spread which put the moneyline in play and boosted bets.  If a matchup is close, there is essentially no moneyline bet and fewer bets means less betting.  For the tin foil hat wearers that would mean they wouldn't want the closest matchups, per se.

The leagues already have a huge incentive to get the most popular teams in the finals of their sports.  The marginal benefit to them of making 1% of possibly a tiny bit more in wagers is negligible compared to the incentive already in place but in both cases the downside of manipulating the game and losing everything is much larger such that the leagues still have billions more reasons to keep it as pure as possible.  Otherwise, there would be no average Joe's.

jdon

January 24th, 2018 at 3:57 PM ^

I want to go to a lions game and be able to place bets.

That would be awesome!

Of course I also think player should be able to gamble on themselves.

jdon

 

MaizeAndBlueWahoo

January 24th, 2018 at 6:27 PM ^

Fuck no they shouldn't be allowed to bet on themselves.

Let's say the over-under for John Smith is 15 points and John Smith bets $100K on himself to hit the over.  Now he's got the ball with five seconds left, his team down by one, and he's scored 13 points.  Does he take a contested three, or pass to the open teammate for the layup?

What if his ass is broke - not at all unheard of for NBAers?  What if the coach subs him out, not knowing about the wager?  What if the coach does know about the wager and says hell no, I'm not letting your conflict of interest affect the team?  Gambling addicts are desperate as hell - in some ways worse than drug addicts because they often end up owing money they don't have to really dangerous people - do you want that guy on the court in a playoff game?

Letting players bet on the games is the worst idea.

jamesjosephharbaugh

January 24th, 2018 at 4:42 PM ^

I wonder what this would mean for NCAA basketball - obviously the collegiate sport implements many rules in a way that's consistent with the NBA.  IE Shot clock. What constitutes travelling. 3 point shots. (OK I don't know wich league implemented these first).

If the NBA starts making the games about betting and encouraging more wagers, how might the NCAA game rules change to keep itself enjoined to the NBA?

jamesjosephharbaugh

January 24th, 2018 at 4:39 PM ^

Maybe they could get Lou Anna Simon and Joel Ferguson to run the betting division.

"Conflict of interest? Nope! Not here.  Nothing to see here, folks, move along.  No reason to investigate the sudden uptick in wagerable moments in each NBA game. Nope, it would be laughable to investigate why all these games end up being so close."

Yes, even if they only take a percentage of the wager without taking a side, there's still a conflict of interest.  Their interest is to make sure the game is encouraging bets.  That means "managing" the score, shifting the focus even more to individual players whose performance attracts bettors' interest, making sure there are exciting things to bet on until the end of the game, etc.  

It means there's an incentive on the NBA to make the game more of an entertainment product than a sport.  To be fair, that's already their job.  They need to sell tickets, merchandise, and TV broadcast rights. So they make rules to encourage high scoring, displays of athleticism, more field goal attempts, balanced competition among franchises.  The "competition committee" is really just an "entertainment committee."  

But at some point, the balance tips away from it being a sport - with common sense rules of competition like you might see in the Olympics - toward being an entertainment product designed to increase participation in gambling for every game.

Does taking 1% of wagers tip that balance? I don't know.  It feels like crossing a threshold.  Or maybe it just shifts the target audience of said entertainment product from consumers who buy tickets, merch, and watch games on TV, toward bettors.

NYC Fan3

January 24th, 2018 at 4:49 PM ^

Well, reading the below,  Americans were estimated to have bet $9.2BN for March Madness in 2016.

1% of that is $92MM.  If betting was legalized and you could go online or to a party store to place wagers, i could see that number swell.

I am not in favor of it being legal and in general found my visits to the Detroit casinos depressing.  Watching people cash their checks at the casino to turn around and lose it all at a table is a sad reality.

https://www.marketwatch.com/story/this-is-how-much-americans-will-spend…

 

CarlosSpicyweiner21

January 24th, 2018 at 5:11 PM ^

This is all kind of shady. NBA has already had gambling issues in its past. Now they want 1% of bets? Your telling me they won't have access to the bets made on games? They can easily have game officials manipulate outcomes to maximize their 1% rake.

uferfan

January 24th, 2018 at 5:52 PM ^

Produce a better, more reasonably priced product that will generate more revenue by actually putting asses in seats at your over half-empty arenas.

Lawyer12

January 24th, 2018 at 6:34 PM ^

The NBA may eventually get a cut. But, they will never be allowed to be an active participant in any form of wagering (as OP suggested.). That will be a 3rd party company if it happens.

Solecismic

January 24th, 2018 at 11:38 PM ^

Who runs the book? One conflict comes when that entity sets a bad line and needs a little help from their financial partners, who employ the referees.

A second conflict comes from the same problematic source as it came from with Pete Rose: when you're betting on games, you are completely focused on the short term above anything else. In this case, it means maintaining and manufacturing compelling story lines.

This means pressure on injured stars to avoid rest. It means pressure to favor teams that draw more betting interest. At its worst, pressure to use the game to create more opportunities to bet.

I don't like this idea. People are going to bet on games. While you can't bury your head in the sand and ignore the need to protect the game from corruption, the best thing to do is take the NFL's attitude - provide standardized injury reports, stay as much out of the team's business as possible.