The NBA just named MGM Resorts International as its first official gaming partner. As such, MGM now has a leg up on its competitors for professional basketball.
In a 3-year, $25 million deal, MGM will receive access to NBA intellectual property. The intellectual property includes signage and other materials identifying MGM as the official betting home for the NBA.
MGM will be the only gaming company to receive official data directly from the NBA for now. However, the deal is on a non-exclusive basis.”
In addition to the money, the NBA will also receive real-time account-level information about bets on NBA games.
“As the landscape for sports betting in the U.S. continues to evolve at a rapid pace, MGM Resorts is a proven gaming leader for us to work with on this groundbreaking partnership,” said NBA Commissioner Adam Silver in a press release. “Our collaboration will result in the best possible gaming and entertainment experience for consumers through the use of accurate, real-time NBA and WNBA data, and our collective efforts to maintain and enhance the integrity of our games.”
In announcing the deal, Silver stressed the need for compensation regarding its data releases to gaming companies. This deal sets a precedent for future valuations of similar data deals.
NBA did not get an integrity fee from MGM, though
Somewhat surprisingly, the deal did not include a provision for integrity fees moving from MGM to the NBA. The NBA has long argued for payments to compensate the leagues for their data and to ensure the integrity of sports contests.
For a time after the demise of the Professional and Amateur Sports Protection Act (PASPA), it seemed that the leagues planned to stonewall the gambling industry on issues like data and access. In other words, the leagues sought to control their products even after the withdrawal of PASPA’s legal obstacles.
Furthermore, the businessmen behind the leagues saw that rivers of money might pass by their leagues like ships in the night. So, the NBA helped to innovate the integrity fee.
An integrity fee would amount to a tax on sports betting handle that states would collect and pass onto the leagues. The concept for integrity fees is that the increased wagering on sports creates a greater danger for players, coaches, referees, and other related personnel.
The fee would go to cover increased enforcement and employees who could monitor any incidents of wrongdoing. Silver later shifted the terminology to call it a royalty.
NBA and gaming may be learning to coexist
Integrity fees have been a non-starter for many state governments. However, according to Forbes, as many as four states may be considering integrity fees as a part of their sports betting legislation.
With this announcement, it seems clear that Silver is now moving towards a cooperative relationship with gaming operators, rather than an antagonistic one. It would also seem that the NBA now sees the profit motive on the data side, rather than just by virtue of its existence or some notion of the integrity of games.
Ironically, MGM will be the official sports betting location for the WNBA, but will be unable to offer action on all the games. MGM is also the owner of the WNBA’s Purple Aces. As such, Nevada sports betting regulations stipulate the company cannot offer action on the team.
MGM continues to stockpile relationships
The announcement in New York is now the fourth major announcement related to MGM in the last three days. MGM is piling up strategic partners in an effort to seize control of the nascent US sports betting market.
Even prior to the news, the NBA had several points of contact with MGM, including through MGM’s primary sponsorship of the NBA Summer League in Las Vegas.
In the past few days, MGM almost simultaneously revealed partnerships with two major gaming companies. The first of those partnerships was with British online gaming company GVC.
GVC agreed to provide MGM with a platform for its sports betting. In exchange, GVC, which owns bwin.party and Ladbrokes, has a way to open its US presence wider.
GVC is primarily a European power. However, the new US market has generated interest from several international gaming companies in the last two months.
MGM also agreed to an access swap with Boyd Gaming for online casinos. Boyd and MGM have properties in 15 US states, and not all of them are the same.
The agreement will allow both companies to access the missing states via the other’s license. This ability is of key importance to MGM, who will now be able to offer sports betting in Pennsylvania. Boyd is closing a deal to take over ownership of Valley Forge Casino Resort.
On Jul. 30, MGM announced that its sports betting operations in Mississippi would commence on Aug. 1. Both Beau Rivage in Biloxi and Gold Strike in Tunica will be available. Both sportsbooks will be ready for college football season on Aug. 25.
It is now clear that MGM is not going to allow themselves to go quietly in the new US markets. It’s probably not a shock that one of the world’s largest gambling companies threw its hat in the ring so definitively.
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