How NBA sparked the American sports gambling gold rush

David Purdum

ATLANTIC CITY, N.J. -- On a Saturday afternoon in October, the race and sportsbook at the Borgata Hotel Casino is packed with horse racing enthusiasts cheering on the ponies.

No one is paying attention to what's hanging on the wall, but it's a big deal, a sign of a monumental shift in the American sports landscape.

In the front-right corner of the sportsbook, above the betting windows, the iconic, official red-white-and-blue NBA logo is on display right next to the lit-up oddsboard showcasing all of the day's point spreads. It's glaring, visual evidence of the thawing relationship between two of America's favorite pastimes -- professional sports and gambling -- as well as a precursor to a high-speed, data-driven evolution that is coming next.

"A lot has changed," said Scott Butera, president of interactive gaming for MGM Resorts, which owns the Borgata. "What's really changed is the fan base and the way they're changing how they consume sports."

Some would argue that the bigger agent of change has been the evolving attitudes of the professional leagues, which have been able to quickly pivot off their long-held, staunch opposition to sports betting.

For six years, the NBA, along with the NCAA, NFL, Major League Baseball and the NHL, fought New Jersey's efforts to allow sports betting. The leagues claimed they would suffer "irreparable harm" if sportsbooks opened in Atlantic City. Now, the leagues and their teams are partnering with those same sportsbooks.

In May, the U.S. Supreme Court struck down a federal statute and opened a path for states outside of Nevada to legalize sports betting, and a race to profit off it kicked off. In the first five months since the Supreme Court ruling, the NBA, NHL and even the New York Jets have partnered with MGM Resorts, the prominent gaming company that owns properties in a half dozen states. Prudential Center, home to the New Jersey Devils, is dedicating space to multiple sports-betting-sponsored lounges, where odds will be on display and bets can be made on the sponsoring bookmaker's mobile app. This week, the Oakland Raiders signed a deal with Caesars. More team, league and venue deals are expected to follow.

The American sports betting gold rush is on -- and it all started with a discussion between a forward-thinking commissioner and the CEO of one of the largest bookmaking operations in the U.S.

NBA makes the first move

It didn't take long to put together the first ever partnership between a major U.S. sports league and prominent bookmaker.

Shortly after the Supreme Court ruling, Jim Murren, CEO of MGM Resorts, approached NBA commissioner Adam Silver about a partnership. MGM had already hosted the NBA's annual summer league and a new WNBA franchise, the Las Vegas Aces, so it was a natural progression.

On Aug. 9, Murren and Silver sat side by side at a New York City press conference to announce a deal based marketing, data and gambling.

Industry sources estimate the NBA-MGM deal to be worth at least $25 million. MGM received the exclusive rights to call itself the official gaming partner of the NBA and permission to use league and team logos. Eventually, MGM bookmakers also will get access to the NBA's official data feed, which will be used to fuel the minute-by-minute in-game wagering that is anticipated to become increasing popular in the future.

For now, the marketing portion of the partnership is most visible. NBA.com ran a pick 'em contest based on the MGM odds on each team's season win total, and official logos are beginning to appear at MGM sportsbooks, something that had been prohibited in the past.

To get around any copyright restrictions, Las Vegas sportsbooks have previously avoided using "NBA" or "Super Bowl" on their odds, instead opting for ambiguous wording like "Pro Basketball" and "Pro Football Championship." The NBA says such workarounds may give fans an inauthentic, almost "bootleg" feel to the betting experience.

"Right now, our fans have seen all the press that sports betting is no longer prohibited outside of Nevada, and states are looking to legalize it," NBA vice president and head of fantasy and gaming Scott Kaufman-Ross said. "But our fans don't really know who the legal, licensed sportsbooks are. They'll see ads for [offshore sportsbooks] Bovada and MyBookie, but they don't really know who has a license in what state and who is allowed to do what. What we can do by creating an authentic experience is give the fans the type of experience with our sport that they're used to, the official experience."

Bookmakers and professional bettors are more worried about what comes next, though: the official data, and all the possibilities that come with it.

Issues with current in-game betting

Sophisticated sports bettors, watching the NBA from their home or office, often know what happens in a game before it is shown on TV, by tracking how the in-game odds move at the most influential offshore sportsbooks.

"I can assume that the Warriors, for example, are going to score on this possession, based on how the spread moves," a Las Vegas-based professional sports bettor told ESPN. "The books have this live algorithm running, and you can bet it at any second.

"The line providers have a live feed, so if you're watching an NBA game on ESPN through cable, you're 30 seconds behind," he added. "If you're watching a game on satellite like me, you're 45 seconds behind. From that perspective, it's tough, and we really only bet it during commercials because the playing field is kind of level."

In the coming months, MGM will begin infusing the NBA's official data feed into its PlayMGM mobile sports betting app. Butera said customers should expect dramatic changes to the app's appearance and its content in the coming months, although he notes that NBA highlights will not be shown, at least to start.

Eventually, the enhanced app, fueled by official league data, will aim to create a real-time, in-game betting experience that will engage the next generation of fans who, as Butera put it, "aren't looking to drive over to the stadium, have a hot dog and watch the game."

In the U.K., more money is generally wagered after a game starts than beforehand. It hasn't reached that level of popularity in the U.S. yet, but experts believe it's only a matter of time.

"[In-game betting] helps drive revenue, it helps drive margin, and we really think that's the future," Butera said. "It creates a lot of enthusiasm for games. Because people want to watch the whole game, it's good for teams, sponsors and advertisers."

The NBA believes its official data feed, because of its transmission speed and reliability, is key to the growth of in-game betting in the U.S. The league, along with Major League Baseball and the PGA Tour, is lobbying in states trying to legalize sports betting to mandate the use of official league data by bookmakers in any new legislation.

"The authenticity and reliability [of the data feed] is first and then speed," Dallas Mavericks owner Mark Cuban said in an email to ESPN. "If the data is real time, no one has an advantage over someone else."

Several Las Vegas and New Jersey sportsbooks, including MGM, currently offer in-play betting on the NBA, even without access to the league's official data feed. Data provider Betradar, a branch of Sportradar, distributes data and odds pricing to multiple Las Vegas sportsbooks' in-game betting product.

By moving to the NBA's official feed, Kaufman-Ross estimates sportsbook operators will be able to keep in-game betting markets open and available for wagering for 20 percent more of a game compared to bookmakers who use unofficial data.

"What happens is if you have unofficial data that is collected off the broadcast and then distributed, the broadcasts are delayed and so the data feed is delayed," Kaufman-Ross said. "So the bookmaker has to suspend the [in-game betting] markets to account for the delays in the data feed, which means there is a smaller percentage of the game that they can take in-game bets."

Silver, the first major sports league commissioner to come out in favor of legalizing sports betting, has envisioned future betting opportunities on micro-events during games, such as whether a player will make or miss the next free throw. For now, though, in-game wagering on the NBA at Nevada sportsbooks is centered on the point spread, money-line odds on the outright winner and the over/under on the total points scored.

Jay Rood, MGM vice president of race and sports and a veteran Las Vegas bookmaker, says that while receiving data quicker would allow them to offer bets such as, "Will the next play be a run or a pass?" in football, the delay between the data and the game broadcast that fans are watching wouldn't make for an efficient betting experience.

"Maybe you have access to a feed that's not broadcast in order for you to be near real-time and take advantage of in-game betting," Rood pondered. "That's probably what things are going to look like in the future, if I were to make a guess."

Data debate continues

Up to four statisticians -- a primary stats inputter, a secondary stats inputter and two supporting callers -- use industrial laptops with touch screens to compile data at the arenas. The data is transferred over a high-speed messaging layer to the in-arena server infrastructure for immediate display within the arena. At the same time, the data is immediately available to the NBA headquarters in Secaucus, New Jersey, and the league's Game Operations Center, where a stats auditor, in direct communication with the in-arena statisticians, compares the data against multiangle video content and has the ability to make corrections to the data stream.

The NBA has four layers of redundancy to ensure the reliability of the data feed. In addition to the official data feed, three backup feeds are compiled using the NBA's international data provider Sportradar, the actual game clock feed and low-latency video.

"We want to make sure no matter what happens that the data feed does not go out," Kaufman-Ross said, "because, obviously, that is a disaster for sports betting companies and also for our fans."

While the NBA lobbies in states in an attempt to force sportsbook operators to use official league data, gaming companies are pushing for commercial deals like the one between the NBA and MGM instead of legislated mandates. And the debate over just how valuable official league data is continues.

"U.S. sports are very different than the major sports that are bet on in Europe," Art Manteris, vice president of race and sports for Station Casinos in Nevada, said. "In soccer, the biggest bet sport in the world, the changes in the price are far slower than the changes in wagering odds in U.S. sports. In basketball, scores change so fast and oftentimes that's reflected in the betting price. It's really difficult to keep events open for wagering consistently with such frequent price changes.

"I think the jury's still out on the value of official league data in the U.S."