Inside the sports betting bill negotiations

Joe Torre, MLB's Chief Baseball Officer, discussed sports betting in Albany this week. Stephen Dunn/Getty Images

Major League Baseball, the NBA and PGA Tour continue to lobby in states interested in legalizing sports betting, and, despite setbacks in New Jersey and West Virginia, the leagues appear to be in position to pick up perhaps their biggest win in arguably the most influential state -- New York.

New York assemblyman J. Gary Pretlow introduced a sports betting bill Monday that includes a lot of what the leagues have been requesting: data rights, input on what types of bets are offered and a percentage of the amount wagered paid to the sports governing bodies in the form of a royalty.

"I do think they deserve something, because they produce the product," Pretlow told ESPN on Tuesday. "I know [New] Jersey [didn't] want to give them a dime, because the leagues were the ones who dragged them through the courts and cost them millions of dollars. I understand their position, but it's better for me to have the support of the leagues rather than having them fighting me."

New York State Sen. John Bonacic also is sponsoring a sports betting bill with similar beneficial stipulations for the leagues, who have sent a stream of former athletes and coaches to lobby on their behalf, including ex-New York Yankees managers Joe Torre and Joe Girardi.

Pretlow is aiming to bring his bill to a vote by the middle of next week, but is working on a tight window. The legislative session is scheduled to end June 20, and New York Gov. Andrew Cuomo has indicated that he doesn't believe there's enough time.

New Jersey and West Virginia

New Jersey and West Virginia refused to comply with the leagues' requests in their recently passed bills. New Jersey legislature voted to pass its sports betting bill Thursday. The bill is in Gov. Phil Murphy's hands. He has 45 days to act. Murphy's office has said the governor will "thoroughly review" the bill, leaving New Jersey operators like Monmouth Park without a timeline on when they'll be able to begin offering sports betting.

While the leagues would prefer statutory language, they also have participated in negotiations with gaming interests regarding commercial agreements. Officials for Major League Baseball, the NBA and PGA Tour met with representatives from gaming interests in West Virginia last month. Officials for West Virginia University and Marshall also were involved in the discussions. The parties thought they had found some common ground, where in exchange for a 0.25 percent cut of the amount bet and input on what bets would be allowed, the leagues would not require operators to use of official data. The use of official league logos and in-stadium advertising also were discussed as possibilities.

The deal would have provided West Virginia and Marshall 0.25 percent of the money wagered on all college sports, a source involved in the negotiations said.

West Virginia Gov. Jim Justice sent out a press release the day after the meeting, saying that a tentative deal had been reached. Justice's statement, characterized by both sides as unexpected and premature, changed the tone of the negotiations, sources said.

"We strongly believe that the cooperation of the sports leagues and universities is required for sports betting in the U.S. to develop in a safe, transparent, responsible manner that engages our adult fans while providing appropriate safeguards," MLB deputy commissioner Dan Halem told ESPN. "Leagues and universities can help states and their licensed operators bring bettors from illegal markets to regulated markets, ensure that licensed operators are using the most trustworthy data to settle bets, collaborate on systems to prevent fraud and promote responsible betting, and use our intellectual property and content to help licensed operators develop more engaging recreational products. We intend to work with those states and licensed operators that recognize that leagues and universities are an important stakeholder."

Eric Schippers, senior vice president of public and government affairs for Penn National Gambling, said the negotiations between the leagues and gaming interests are only in the "early innings."

"We don't believe there needs to be an extra tax off the top for integrity or royalty or whatever they're calling it legally," Schippers said last week. "But we did say there is some value in getting together, working together to try to encourage states to pass sports betting. There is some value in being able to advertise in their arenas, using their monikers and logos, having good relations with the leagues and data."

The American Gaming Association, which represents the casino industry and has taken part in the negotiations, says it remains "committed to facilitating a constructive dialogue between our members and the leagues to help ensure the success of legal sports betting. We continue to believe our overall interests are aligned and that contracts and marketplace deals should be the goal, rather than legislative intervention."

In the meantime, West Virginia is among the states moving forward with preparations to begin offering sports betting. The state lottery, which will oversee sports betting, is aiming to finalize regulations in late June.

"Our goal is to be up and running by football season," said Danielle Boyd, managing general counsel for the West Virginia Lottery.

Mississippi also hopes to be offering sports betting by football season. On Tuesday, Delaware launched its sports betting operation Sports Pick, becoming the first state outside of Nevada to offer legal sports betting.