In what could end up being a seminal moment for sports gambling in America, the NBA on Wednesday formally requested a set of laws that could be the basis for professional sports leagues pushing for national legalized wagering on games.
Dan Spillane, an attorney for the NBA, testified in front of a New York State Senate committee and for the first time made it clear what the league's price would be to become a partner in legalizing the multibillion-dollar industry.
The NBA wants 1 percent of every bet made on its games in addition to other regulations, a request that could create massive revenue for the NBA and other sports leagues in the future.
Spillane also said the NBA wants more widespread access to gambling for its fans, pushing for bets to be made legal on smartphones and kiosks and not just inside casinos and racetracks. That would increase the amount of wagering and, in turn, create more revenue for the league under its desired plan.
"We have studied these issues at length," Spillane said in his statement to lawmakers. "Our conclusion is that the time has come for a different approach that gives sports fans a safe and legal way to wager on sporting events while protecting the integrity of the underlying competitions."
The U.S. Supreme Court is considering a New Jersey-based case that could clear the way for individual states to legalize sports betting at casinos and racetracks. Oral arguments took place last month, and a decision is expected in the spring. As that process plays out, a number of states are putting legislation in place to act if the Supreme Court's ruling overturns the federal ban on widespread sports betting outside Nevada.
In 2016, Nevada had $4.5 billion in sports wagers. When the numbers come in for 2017, they could be over $5 billion for the first time. Though much of that betting is on sports like horse racing and boxing, it is not hard to see how a 1 percent cut of all bets would be highly lucrative for sports leagues in states like New York -- and could increase exponentially if betting is legalized across the country.
The NBA, NFL, MLB, NHL and NCAA have spent millions in legal fees fighting that case and others over the past decade to prevent expanded sports gambling. But with the NBA as the tip of the spear, the leagues could be preparing to flip their positions and begin to fight instead what could be a costly lobbying effort to get gambling laws they want.
"States like New York and others have reacted by moving forward to discuss and advance new laws that could immediately thereafter permit legal sports betting," Spillane said. "We cannot sit on the sidelines while this activity is occurring."
The NBA had indicated that it wants to eventually lobby Congress to get a national bill passed, regardless of how the Supreme Court rules. The requests Spillane made Wednesday appear to be the basis of how that lobbying effort may go.
The American Gaming Association issued a statement Wednesday that while it was pleased the NBA supported "vigorously regulated sports wagering," it also said that the role of government "most certainly does not include transferring money from bettors to multi-billion dollar sports leagues."
This led to the NBA releasing its own statement.
"Sports leagues provide the foundation for sports betting while bearing the risks it imposes, even when regulated," league spokesman Michael Bass said. "If sports betting is legalized federally or state by state, we will need to invest more in compliance and enforcement, and believe it is reasonable for operators to pay each league 1% of the total amount bet on its games to help compensate for the risk and expense created and the commercial value our product provides them. This is a similar approach to legally-regulated sports betting in other international jurisdictions."
No one knows how much is wagered illegally on sports each year, with estimates reaching into the hundreds of billions.
Pro leagues in Australia and France receive a small percentage of bets made on their sports. The NBA has studied Australia's laws closely in forming a position on the matter.
To this point, the NFL has publicly remained mostly on the sidelines in gambling matters. Last week, ESPN reported the NBA and MLB consulted with Indiana lawmakers to insert a 1 percent "integrity fee" into a sports gambling bill introduced in that state.
These integrity fees could be used to pay for other regulations. The NBA wants real-time monitoring on wagering to detect any unusual activity or insider trading. The leagues already do this and have for years.
Spillane wants to limit action on certain types of bets that could be more easily manipulated. He used the example of prop bets Wednesday, such as placing a wager on who may draw the game's first foul.
The league also wants to protect consumers, including age restrictions and a "rigorous licensing program" for operators.