NBA Wants 1% of All Money Gambled, Equates to 20-29% of All Revenue

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In November 2014, Adam Silver became the 1st U.S. sports commissioner to openly support the legalization and regulation of sports gambling; suggesting a federal bill (as opposed to state initiatives, like NJ) and touting the potential benefits for the NBA (i.e. share in profits). On Wednesday, the NBA set their price (1% of all bets, not just on NBA games) to participate (in lobbying Congress for a national bill); seeking legislation that would authorize legalized gambling from mobile phones and kiosks, in addition to casinos and racetracks. The league also wants to limit prop bets that can be easily fixed, implement an age restriction and ensure a “rigorous licensing plan” is in place for sports betting operators. The NBA will allocate gambling revenue to the real-time monitoring of wagers and games.

Howie Long-Short: League attorney Dan Spillane touted the NBA’s plan as a solution that would offer “sports fans a safe and legal way to wager on sporting events while protecting the integrity of the underlying competitions.” That sounds nice, but as American Gaming Association President, Geoff Freeman said, “let’s get real about eliminating the illegal market, protecting consumers and determining the role of government – a role that most certainly does not include transferring money from bettors to multi-billion dollar sports leagues.” The NBA is in this for the money, and there is a lot of it to be made. In 2017, Las Vegas took in between $4.5 billion and $5 billion in wagers; just a fraction of the $400 billion Silver believes (AGA says $150 billion) is gambled annually on the black market. If even $50 billion is bet on NBA games (which sounds high based on the AGA estimate), the league would take in $500 million in new revenue; or roughly 12% of the NBA’s total revenue ($5.9 billion) in 2017.

Fan Marino: The average Las Vegas casino realizes a profit of between 3.5-5% of revenue. The NBA’s proposed 1% fee amounts to between 20-29% of total revenue; which would seem excessive. Need a reason not to gamble? If you had the Bruins -1.5 (vs. Devils) on Tuesday night, you had the game won (Bruins had a 3-1 lead) with time expiring; then this happened (notice the clock). The final score was Bruins 3, Devils 2.

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Author: John Wall Street

At the intersection of sports & finance.

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