This past week has been an exceptionally busy one in the US sports betting sector.
As the industry finds its footing it outside of Nevada, nearly every major casino and bookmaking group has joined the race. It’s not just domestic outfits, either. Some of the world’s largest gambling companies are porting their brands over from Europe and Australia.
Regardless of the growing competition, a company like MGM Resorts figures to have the inside track on the market in several states. It has deep pockets, significant brand recognition in the mainstream, and an established sports betting product.
MGM’s position received some heavy reinforcements this week, too.
In a landmark press conference on Tuesday, MGM and the NBA announced that they’ve created their own sports betting alliance. The deal is the first of its kind in the US. NBA betting is one of the biggest parts of the nascent industry in America,
This news is not directly relevant to New York right now, but it will be soon. MGM’s purchase of Empire City Casino should close before the end of the year, just in time to join the discussion on New York sports betting in 2019.
MGM and NBA lock arms
It’s worth running through the scope of this deal since it’s such a head-turner for both sports and sports betting.
MGM is now the “official gaming partner” of the NBA. The company paid a reported $25 million for a three-year exclusive.
For that price, MGM gets non-exclusive rights to use league logos and access to the NBA’s official data stream. That data should, in theory, allow MGM to offer the snappiest in-game betting product for pro basketball. Keep that in mind.
Being able to display the NBA marks could also provide a small competitive advantage.
In return, the NBA will promote the MGM brand across its digital assets, including websites, streaming platforms and social media. Expect to see casino ads served up with your basketball news and content going forward. It seems likely those ads will include direct promotion of MGM sports betting, a concept that would have been unfathomable in the not-so-distant past.
Why the deal makes sense
It’s not the financials that makes this such a big thing. Considering the scope of the deal, the price tag is a bargain for both parties.
What’s most noteworthy is that it’s the first partnership between a US sports betting operator a sports league. Although the NBA is the most progressive of the bunch, all four of the leading leagues have been uneasy about accepting sports gambling to this extent.
So far, the deal is in effect across the three states where MGM offers sports betting — Nevada, New Jersey, and Mississippi. The company holds properties or market-access agreements in about than a dozen others, too, including NY.
Whether other leagues or operators follow suit remains to be seen, but the NBA has established the precedent. New York City is home to three NBA franchises — the Knicks, the Nets and the Liberty of the WNBA.
MGM as a lobbying partner?
If you’ve been following the conversation in Albany this year, you know that the NBA worked hard to shape NY sports betting legislation.
Along with Major League Baseball and the PGA Tour, the three-league alliance spent the better part of 2018 arguing for the adoption of its proposed framework. What’s in it? The leagues are seeking control over data, access to betting information, and financial compensation from operators who book action on their product.
There’s that “official league data” that’s included in the MGM deal.
Most lawmakers have balked at the idea of the so-called integrity fee, in particular, but those in NY turned a listening ear. The two bills that nearly reached the finish line both included a modified implementation of the fee. A “victory” there would have been enormous for the leagues, but the clock ran out on lawmakers.
From the sound of it, the NBA might have a new lobbying partner in 2019. Check out this comment from MGM CEO Jim Murren during the joint press conference:
“I think we’ll be able to help the league establish its dialogue in the states in which we operate. Now that we’ve also signed an affiliate agreement with Boyd Gaming, we’re literally going to be in every state in the United States that will approve sports betting.”
New York is, of course, one of those states.
As the focus shifts to data, the NBA and MGM suddenly have similar interests for future legislation. While $25 million isn’t a big number, it’s still money that operators other than MGM are not paying. It would likely prefer that its competitors also paid for data, something that lawmakers could mandate.
Expect MGM to throw its resources behind the NBA’s lobbying interests next year.
