So-called “integrity fees” were a topic of conversation even before the Supreme Court ruled May 14 that the federal law limiting sports gambling was unconstitutional. The NBA, in particular, seems to think it should get a cut of the money gambled on pro basketball games because of “the risk and expense created by betting and the commercial value our product creates for betting operators,” as Dan Spillane, the NBA’s senior vice president and assistant general counsel, told a New York state Senate committee in January, when it discussed whether to allow sports gambling should the Supreme Court rule favorably. The money generated from such fees — 1 percent of the total amount bet on games — would be used for bet monitoring and investigations along with education, Spillane said.
But the proposed fees have been met with skepticism from just about everyone else. Sports-gambling operators such as William Hill US, which operates a number of sportsbooks in Nevada and is partnering on a sportsbook with Monmouth Park in New Jersey, do not want such a sizable chunk taken out of their profits (one estimate pegs a 1 percent integrity fee to equal 20 percent or more of a sportsbook’s profits). Other observers have pointed out that the leagues never have requested an integrity fee from casinos in Nevada (where sports gambling has long been legal), that they already have systems in place to monitor irregular activity and that team values — already quite high, thanks to television contracts and jersey-sponsorship agreements — could skyrocket once owners tap into a newly legalized gambling market.
Nevertheless, the idea persists, albeit with a new spin.
“The issue of the integrity fee is a really good one,” Marc Ganis, co-founder of a sports consulting firm that has helped pro leagues connect with prospective owners and teams build new arenas, told NBA.com’s David Aldridge in a story published Monday. “Do I think the leagues should receive a fee? The answer is unequivocally yes. The reason for it is simple — they are the ones putting on the events that are being gambled on. It’s like a casino that has a poker tournament. They take a cut of every pot, because they’re hosting it. They bring in the dealers, they provide the venues, they make sure no one’s cheating . . . they take the same cut of the tournament that the leagues are asking for.”
Almost nothing Ganis says here makes one lick of sense, starting with the fact that leagues have been “putting on the events that are being gambled on” for decades without asking for a cut of the action from places where sports gambling has been legal. Then he stumbles into a truly baffling analogy, comparing an integrity fee with the rake that is collected by casinos from their poker games. It’s a fatally flawed comparison: Casinos take a cut of that action because they are the ones offering the service and putting up the manpower to stage the games: the dealers, cocktail servers, poker room bosses, etc.
As one Twitter user put it, the NBA asking for an integrity fee is like a playing-card company demanding a cut of a poker room’s profits.
The NBA, last I checked, has no plans to offer its own sports-gambling service, in which case the comparison would be apt. It is perfectly free to do so thanks to the Supreme Court, providing the gambling venues, monitoring the action and paying out winners. It could take every cent of profit for itself as an “integrity fee” or “rake” or “Silverbux” should it so choose.
Instead, the already-lucrative NBA continues to ask for a handout in the guise of “integrity.”
“We’ve been doing that for 40 years,” Jay Kornegay, vice president of Race and Sports SuperBook at the Westgate Las Vegas Resort and Casino, told Aldridge of his business’s never-ending quest to keep things on the level for the sake of everyone involved. “This is nothing new to us. We’ve been protecting the games and the product for four decades. Some have been acting like we haven’t been doing this. I met with the leagues 14 years ago in Indianapolis and we told them, at the time, we were on the same side. We want to protect the game like you do. Integrity is the name of the game for us.”
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