How will legal sports betting change the NBA?
Monday was an historic day in American sport with the Supreme Court clearing the way for states to legalize sports gambling. For the past four years the NBA has been on the leading edge of the march toward this moment.
What does it all mean and how will this affect the game? Here’s a simple FAQ to help explain where we stand and where we might be going.
Q: How will NBA teams make money off the Supreme Court decision?
A: The majority of teams have casino sponsorships and/or owners with casino ties. The Phoenix Suns play in an arena with casino naming rights. Money has been flowing to teams for a while. But there are going to be new opportunities, notably through the jersey ads. Those were practically designed to promote casinos for in-game betting. Roughly two-thirds of the Premier League teams in England have major casino sponsorships, some of them right on the uniform. That could be a major profit center.
Q: How will the league make money?
A: The league is trying to get cash right from the betting window or a mobile app. The NBA is spending a significant amount of money to lobby state legislatures to get a “royalty” on bets. Even getting a fraction of a percent of each bet, which is likely the best the league could dream of, could be worth billions over the next decade.
This is why commissioner Adam Silver keeps talking about wanting Congress to pass a gambling bill. It’s much easier to lobby one body and guarantee a fee from every state than piecemeal it in places where the NBA doesn’t have teams (and, thus, little leverage). There’s no doubt that the NBA and other sports leagues care about protecting the integrity of their sports, but the push is primarily an all-out money grab.
Q: Will the players get a cut?
A: Absolutely. Sponsorships fall under basketball-related income (BRI), and the players get 50 percent of that money. Also, in the recent collective bargaining agreement (CBA), the union negotiated that income from gambling falls under BRI and will be shared with the players. This is the new vein of revenue for the league.
Q: What impact will that have on the salary cap? And when?
A: After a modest increase in the cap this season, the NBA is projecting the salary cap to inflate by $7 million in 2019. The league hasn’t explained the reason, but some of that projection might include some anticipated new gambling-related revenue.
It will probably take a year or two for states to get operations fully up and running before possible ancillary money flows to the NBA.
Q: Will there be another cap spike, like there was when the Warriors landed Kevin Durant?
A: Unlikely. That might’ve been a once-in-a-generation moment. Aren’t those Warriors smart/fortunate?
Q: What is the league doing to protect the integrity of the game?
A: The league already hires firms to monitor all legal betting across the globe. I’ve personally seen the operations at one of them — Sportradar, in London — and it’s impressive. It has busted match-fixing in many sports. Of course, these firms can’t monitor illegal betting, which is why moving this to a legal framework is better for everyone.
But the league is pushing for regulations in all states, such as banning certain prop bets that could be easy to manipulate. For example, who gets called for the first foul in a game is somewhat ripe for exploitation, so the league wouldn’t want to allow bets like that. For other in-game wagers — like, say, who will score the next basket — the league has sought to keep relatively low limits on the size of those bets to fight the temptation for corruption. It’s hard to try to buy off a player making millions if the most anyone can spend on a prop bet is $100.
Q: How will fans be able to place bets?
A: Here’s how you know the NBA really wants gambling. In some of the states that are rushing to pass gambling laws, lawmakers want to make people go to their existing casinos or racetracks and physically bet at a window or kiosk. It’s an effort to save or buttress these institutions. But the NBA has been actively lobbying states to offer betting on mobile phones and even for fans to be able to register a mobile gambling account without having to go to a sportsbook first (which is the case in Nevada). The league says it’s to compete with the illegal sportsbooks that offer such action. But, of course, it would likely mean way more betting this way … perhaps even within arenas during games.
Q: How will this change the way we watch games?
A: Remember those FanDuel and DraftKings ads? Get ready for a lot more like them. Also this is a question for the league’s media partners, like ESPN. Many more fans might be watching with action on the games and not out of general interest. That might affect what sort of topics are covered before, during and after the game. We’re all figuring it out.
Q: How will this change the way the league handles DNP-rest and injuries?
A: There’s going to have to be vastly increased transparency, and teams will probably have to announce who is playing earlier. The NFL, which knows where the bread is buttered, has been doing this with injury reports and practice reports for years. The NBA has started the process, though teams still sometimes embellish injuries to cover for rest. Screws will get tightened. There’s too much money involved.