The National Basketball Association became the first U.S. pro sports league to sign an official sports betting partnership, announcing a deal with MGM Resorts Intl. (MGM) on Tuesday. The agreement gives the resort and gaming operator authorization to use “league highlights, names, logos and its direct data feed” and enables the company to market itself as the “official gaming partner of the NBA & WNBA.” MGM will pay the NBA at least $25 million over 3 years, but the league will not receive an “integrity fee” or percentage of all bets placed on league games. MGM is not permitted to offer odds on screen during NBA games under the terms of this deal.
Howie Long-Short: Tuesday’s announcement comes just 24 hours after MGM announced a $200 million joint venture with GVC Holdings (to create an online gaming experience) and a market access agreement with Boyd Gaming (giving MGM ability to operate in 15 states, evening the playing field with CZR and PENN). While sports betting is currently limited to just 4 states, MGM is gearing up to cash in in 2023 when upwards of 32 states are expected to offer single game sports wagering.
The key to this deal on the MGM side is the direct data feed, which enables the company to provide an advanced in-game betting product. While live-betting currently represents just a small fraction of all bets placed on league action, it’s suspected that delays in 3rd party feeds have hampered its potential. It must be noted though, MGM’s pact with the league does not give it exclusivity over the data; only their title as the “official gaming partner of the NBA and WNBA” is protected. I expect mobile sports betting to gain momentum, inevitably forcing others gaming companies to purchase the same “official data.”
The NBA is finally going to receive compensation for its intellectual property, though not the 1% “integrity fee” it originally sought. While it’s far too early to project how much will be bet on league games (and ultimately the percentage $25 million equates to), the league must be ecstatic that they were able to get a deal done without any federal statutes in place; there really was no reason for a gaming company to cave to their demands.
Fan Marino: Sure, no gaming company had to cave, but MGM made for an easy target (i.e. there will be many more) for the NBA in its quest to profit off legalized sports betting. Why? It owns the WNBA’s Aces (they play at the MGM owned Mandalay Bay Events Center), it’s sponsored the NBA’s summer league the last 2 years and its believed the company wants to place an NBA team in the T-Mobile Arena; in other words, they’re motivated to work with the league. That’s certainly not the case for the remainder of the players in the sports betting space though, who vehemently oppose fees of any sort and are now placed in a tough spot with the precedent set – gaming companies will pay for access to official data.
FYI for NJ Residents: MGM will be taking mobile sports bets, within the state, by the end of the week.
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