MLB, NBA seek fee from legal sports betting

March 1, 2018 GMT

HARTFORD — Major league baseball and basketball would want a one percent “integrity fee” if sports betting is legalized in Connecticut and other states.

The fee would cover both enforcement and tracking of proper betting and reimburse the sports companies for the value of their product, representatives for the two sport leagues told a legislative committee on Thursday.

It would be applied to each bet, they said.

“I’m not here to tell you to legalize sports betting,” said Byran Seeley, a senior vice president with Major League Baseball. “If it does, do it in a way that protects fans and the integrity of the game.”

Dan Spillane, senior vice president for the National Basketball Association, said legal sports betting outside Las Vegas would incur costs for the leagues.

“Sports betting is built on our product and the leagues bear the risk in sports betting and scandal that threatens the integrity of the game,” Spillane said. “We have to hire more people and that’s going to cost money and we should be compensated.”

The General Assembly’s Public Safety Committee held a forum on sports betting and allowing legal betting in Connecticut in anticipation of a case before the U.S. Supreme Court that could open states to sports betting.

“The Supreme Court will rule in the next few months and the ruling will have significant impacts on Connecticut,” said Dan Shapiro, a vice president for the William Hill Sports Books, which operates sports betting in Las Vegas.

“As you think about implementing sports betting, we encourage you to consider fees and taxes,” Shapiro said. “While it will create revenue for Connecticut, betting is a low margin business.”

The committee was told that the profit margin from bets is about five percent of the handle, or amount bet. The one percent integrity fee would come from the bet placed, not the winnings, the committee was told.

State officials are now talking with the Mashantucket Pequot and Mohegan Indians about legal sports betting in the state and how it could work. The tribes, which have an exclusive right to offer gambling in the state, have indicated they would want to operate an online betting system.

Betting could be done through a mobile device or on a desktop and laptop computer. The state would regulate the betting to ensure integrity and set fees, lawmakers said.

Illegal betting is considered a $150 billion industry in the U.S. and legal betting would slice into that amount. While the state would take a piece of the handle, it’s not yet known how much that would be. A bill before lawmakers seeks a study on revenue and other issues.