U.S. sports leagues split on how to monetize sports betting

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By Wayne Parry (Associated Press)

ATLANTIC CITY, N.J. (AP) — America’s major professional sports leagues are split on how to get a piece of the action from legal sports betting after failing to get early adopting states to cut them in.

But they are back in the game this year with several state legislatures considering granting them fees from sports bets.

The National Football League, Major League Baseball, National Basketball Association and the National Hockey League uniformly fought to stop the spread of sports gambling for years, but retrenched in their positions after a key loss – a U.S. Supreme Court ruling last year that granted New Jersey and other states the option to allow wagering.

That shift from the courts to statehouses, Congress and the open market has revealed divisions among the leagues in how to approach the inevitability of expanded legal betting.

Some are lobbying individual states to include a 0.25 percent cut of all sports bets placed in their states. Others are concentrating on making free-market deals with individual gambling companies. Some are doing both those things and others say they don’t want or need payments from sportsbooks.

The U.S. Supreme Court ruled last May that all states are free to legalize sports betting. Eight states currently accept bets with many more expected to follow suit – some soon, others in future years. None of the laws passed in 2018 gave leagues what they’d hoped for.

But at least six states have included fees for the leagues in sports betting bills they are considering this year, with more bills expected.

The NBA, MLB and golf’s PGA Tour began lobbying individual states for direct payments, an idea widely known among legislators and lobbyists as an ”integrity fee” but that the leagues prefer to call a royalty. The leagues say they deserve to be reimbursed for costs to make sure their games are free from scandal and manipulation. They also feel that outside companies making money from games should share profits with those organizing the sports.

”It obviously helps the leagues in providing compensation to us for our product,” said Bryan Seeley, a senior vice president of Major League Baseball. ”It also helps defray the costs for us for integrity and regulatory costs.”

Those costs include hiring additional people to monitor games and betting activity, training players, referees and other league employees on integrity measures, developing special software and hiring outside consultants, said Dan Spillane, an NBA senior vice president. But neither of those leagues would quantify exactly how much integrity measures are costing them or how much is new spending, given that illegal sports betting has been popular in America for a long time and other countries offer legal wagering on their games.

Seeley said gambling companies need to partner with leagues so both sides have incentives to grow appeal and profitability, he said.

”I can’t think of another industry where a class of people is able to make hundreds of millions of dollars off someone else’s product, put risk on that party, and pay them nothing,” Seeley said. ”Some of the revenue that’s going to be made by the gambling companies needs to be shared.”

The NFL – even with the most popular betting sport in the United States – says it never sought such payments.

”Rather, we are focused on game integrity and consumer protection,” NFL spokesman Brian McCarthy said.

The National Hockey League has put most of its energy into reaching direct deals with gambling companies, including gambling giant MGM Resorts International, one of a flurry of deals the leagues made last year. These pacts have included sportsbooks licensing official league data as well as using league and team logos in marketing and advertising.

”Instead of seeking legislation at the federal level or even at the state level, our approach has been to work directly with the industry,” NHL Commissioner Gary Bettman said. ”We believe that, whether it’s our intellectual property, our data, whether it’s video of our game, we have important assets, and if somebody is going to avail themselves or want to avail themselves of those assets in order to conduct their business, then we’re going to need to have a negotiation.”

MLB and the NBA say they are pursuing state-by-state fees and deals with private companies as parallel but independent efforts. David Schwartz, director of the Center for Gaming Research at the University of Nevada-Las Vegas, sees that as ”an adjustment by the leagues to the political reality of the situation.”

”I imagine that as the market grows, they will seek various ways to monetize public interest in sports betting, perhaps even some they haven’t thought of yet,” Schwartz said.

At least five states considered royalties to leagues last year before deciding against paying them. The leagues think they’ll do better this year with more lobbying. So far this year, Missouri, New York, Kansas, Illinois, Iowa and Massachusetts have introduced bills providing fees of between 0.2 percent and 1 percent for the leagues.

That doesn’t necessarily mean there’s strong support for the fees in those states. Lawmakers in several of those jurisdictions say they included the fee in bills for the purposes of discussion, but say they’re not convinced it should be adopted.

New York state Sen. Joseph Addabbo Jr. said the bill he sponsored is basically a reintroduction of last year’s unsuccessful bill. He’s not sold on the 0.2 percent fee it would provide to the leagues, noting that Nevada, where sports betting has been legal for years, does not share its revenue with the leagues.

”Somebody is going to have to justify an integrity fee, credibly,” he said. ”The leagues say there’s more work involved in ensuring the integrity of their games; I get it. But I need to maximize the funding for our state. There’s a pie, and everyone wants their little slice. And the state wants the biggest slice.”

Iowa state Rep. Bobby Kaufmann included a 0.25 percent fee in one of his state’s bills because, ”I wanted to give every one of the stakeholders – the casinos, the leagues, the lottery and the horsemen – their ‘dream bill.’ But I don’t believe right now (the fee) has the votes.

”Iowa doesn’t have any pro sports leagues, but our casinos are in 19 different locations,” he said. ”An integrity fee would just direct money away from Iowa to out-of-state entities.”

Missouri state Sen. Paul Wieland opposes such fees, which are in one of his state’s bills.

”I don’t think that the leagues have any rights to fees,” he said. ”The leagues are in the sports and entertainment business, and the casinos are in the gaming business. If the leagues feel they should get something, they should work out individual deals with casinos to be the ‘official sports book of,’ just like beer companies do.”

Illinois state Rep. Mike Zalewski won’t commit to supporting an integrity fee, but is sympathetic to the position of the leagues.

”It’s their product,” Zalewski said. ”They want to have a say in this.”

Some state lawmakers and gambling companies object to the proposed fee taking the form of a percentage of all bets made, as opposed to a percentage of gambling companies’ profits, which is a far smaller number.

One thing the leagues have agreed on with one another is the idea of federal regulation, preferring a single set of uniform rules than different laws in each state. A bill introduced late last year that would have the U.S. Justice Department set minimum standards for states to meet in offering sports betting does not include royalties. But it does not explicitly forbid them, either, and whether such payments are ultimately added is expected to be a central focus or negotiations as it makes its way through Congress.

Associated Press writer Geoff Mulvihill in Philadelphia contributed to this report.

Follow Wayne Parry at http://twitter.com/WayneParryAC

More AP sports: https://apnews.com/apf-sports and https://twitter.com/AP-Sports

Golden Knights sign defenseman Engelland to one-year deal

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LAS VEGAS (AP) The Vegas Golden Knights signed defenseman Deryk Engelland on Tuesday to a one-year deal for the upcoming season.

The contract includes a $700,000 base salary and incentives that could bring the total value of the deal to $1.5 million.

The 37-year-old Engelland played in 74 games last season and finished with 12 points and 18 penalty minutes. He set career-marks with 152 blocked shots and 165 hits.

The Knights took Engelland during the 2017 expansion draft.

The team also acquired goaltender Garret Sparks from the Toronto Maple Leafs in exchange for forward David Clarkson and a fourth-round selection in the 2020 NHL entry draft.

Trade: Clarkson contract back to Toronto; Vegas opens up space

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Nostalgia is in the air, as “The Lion King” remake is in theaters, so maybe it’s time to cue “The Circle of Life.”

In a peculiar bit of salary cap management, David Clarkson – er, David Clarkson’s contract – and the Toronto Maple Leafs are back together again. While Garret Sparks goes to the Vegas Golden Knights, the Maple Leafs receive a fourth-round pick for their troubles.

Maple Leafs get: Clarkson’s contract ($5.25M for one more season), Vegas 2020 fourth-round pick.

Golden Knights receive: Cap relief even though they were going to send Clarkson to LTIR; a decent goalie consideration with Garret Sparks.

This is all about cap and asset management for both teams.

Clarkson was headed to LTIR whether his contract stayed in Vegas or matriculated to Toronto, and now his deal can be neighbors with Nathan Horton after they were exchanged. The Maple Leafs still have some work to do, naturally, as they need to fit Mitch Marner into the mix. The numbers might melt your brain a bit.

The Golden Knights still need to sort out their own issues with Nikita Gusev lingering as a fascinating RFA, and that resolution hasn’t come yet. In the meantime, or maybe instead, the Golden Knights took advantage of extra wiggle room to bring back veteran (and Vegas-loving) defenseman Deryk Engelland for a cheap deal.

Depth goaltending also buzzed around these moves.

Again, Sparks represents an interesting consideration for Vegas, as Malcolm Subban hasn’t been an unqualified solution as Marc-Andre Fleury‘s backup. Perhaps Sparks would end up prevailing after both of their contracts expire following the 2019-20 season?

Meanwhile, the Maple Leafs opened up room for a depth option as well, as they confirmed that Michal Neuvirth has been invited to training camp on a PTO.

[ProHockeyTalk’s 2019 NHL free agency tracker]

It kind of makes you want to dig up that Charlie Kelly mailroom conspiracy board to try to cover all the ins and outs, but the bigger picture takeaway is that the Maple Leafs and Golden Knights continue to work on their cap conundrums, and this trade was really just another step in the process.

At least it was a pretty odd and funny step, though.

James O’Brien is a writer for Pro Hockey Talk on NBC Sports. Drop him a line at phtblog@nbcsports.com or follow him on Twitter @cyclelikesedins.

Predators are being bold with term; are they being smart?

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If nothing else, the Nashville Predators aren’t afraid to be bold.

In a vacuum, the Colton Sissons signing isn’t something that will make or break the Predators’ future. That seven-year, $20 million contract has inspired some fascinating debates, but the most interesting questions arise around GM David Poile’s larger team building, and his courageous decisions.

As we’ve seen, Poile doesn’t just lock up obvious core players to term, he frequently gives supporting cast players unusual security, too.

This signing seems like a good excuse to dive into the Predators’ biggest offseason decisions, and also ponder maybe the biggest one of all: what to do with captain Roman Josi, whose bargain contract will only last for one more season.

The interlocking P.K. Subban, Matt Duchene, Roman Josi situation

By any reasonable estimate, the Predators got hosed in getting such a small return for Subban in that deal with the Devils.

Of course, the Predators’ goal wasn’t necessarily to get a great return for Subban, but instead to get rid of Subban’s $9M to (most directly) sign Matt Duchene, and maybe eventually provide more leeway to extend Josi.

There was some argument to trading away Subban, as at 30, there’s a risk that his $9M AAV could become scary.

The thing is, the Predators only seemed to expose themselves to greater risks. It remains to be seen if Matt Duchene will be worth $8M, even right away, and he’s already 28. Roman Josi turned 29 in June, so if Josi’s cap hit is comparable to Subban’s — and it could be a lot higher if Josi plays the market right — then the Predators would take even bigger risks on Josi. After all, Josi’s next contract will begin in 2020-21, while Subban’s is set to expire after 2021-22.

So, in moving on from Subban to Duchene and/or Josi, the Predators are continuing to make big gambles that they’re right. Even if Subban really was on the decline, at least his deal isn’t going on for that much longer. Nashville’s instead chosen one or maybe two even riskier contracts at comparable prices, really rolling the dice that they’re not painting themselves into a corner.

There’s also the scenario where Josi leaves Nashville, and things could get pretty dizzying from there.

Even if you look at it as a Matt Duchene for P.K. Subban trade alone, that’s not necessarily a guaranteed “win” for Nashville. It’s all pretty bold, though.

[This post goes into even greater detail about trading Subban, and the aftermath.]

Lots of term

Nashville doesn’t have much term locked in its goalies Pekka Rinne and Juuse Saros, which is wise, as goalies are very tough to predict. Those risks are instead spread out to a considerable number of skaters, and Poile’s crossing his fingers that he’s going to find the sweet spot with veterans, rather than going all that heavy on youth.

The long-term plan has frequently been fruitful for the Predators, as Viktor Arvidsson ($4.25M for five more seasons) and Filip Forsberg ($6M for three more seasons) rank as some of the best bargains in the NHL. Josi’s $4M is right up there, though that fun ride ends after 2019-20.

Your mileage varies when you praise the overall work, though, because some savings are offset by clunkers. It stings to spend $10.1M in combined cap space on Kyle Turris and Nick Bonino, especially since $16M for Matt Duchene and Ryan Johansen ranks somewhere between “the price of doing business” and “bad.”

[ProHockeyTalk’s 2019 NHL free agency tracker]

So that’s the thing with locking down supporting cast members. It’s nice to have a defensive forward who seemingly moves the needle like Colton Sissons seems to do …

… Yet is he a bit of an extravagance at $2.857M per year? Again, that’s a matter of debate.

The uncomfortable truth is that, if the Predators are wrong about enough of these deals, then it’s that much tougher to wiggle your way out of mistakes. Yes, maybe the Predators can move Sissons if he slides, but you risk falling behind the pack if you lose value propositions too often.

Will that be the case with the Predators? We’ll have to wait and see, and the most fascinating test cases come down the line. If it doesn’t work out next year, in particular, then things could pretty uncomfortable, pretty quickly.

James O’Brien is a writer for Pro Hockey Talk on NBC Sports. Drop him a line at phtblog@nbcsports.com or follow him on Twitter @cyclelikesedins.

Sissons, Predators agree to seven-year, $20 million deal

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We see long-term deals with high annual average values.

We see short-term deals with lower annual average values.

But rarely do we see long-term deals with low annual average values. Like less than $3 million low.

Yet, despite the rarity of such a pact, David Poile and the Nashville Predators have become some sort of trendsetters in getting plays to sign lengthy deals worth a pittance annually.

Colton Sissons becomes the second in the past three years to sign on with the Predators long-term at a small AVV. Sissons new deal, avoiding arbitration, is a seven-year contract worth $20 million — an AAV of $2.85 million.

“Colton will be an important part of our team for the next seven seasons, and we are happy he has made a long-term commitment to our organization and the city the Nashville,” Poile said. “He’s a heart and soul player who is versatile and can fill many important roles on our team, including on the penalty kill and power play. His offensive production has increased each season, and he remains an integral part of our defensive structure down the middle of the ice. Colton is also an up-and-coming leader in our organization, which is something we value strongly.”

Poile seems to have no issue signing depth guys to lengthy deals. In 2016, he signed Calle Jarnkork to a six-year deal worth $12 million. In fact, he’s the only general manager to pull of such moves.

[ProHockeyTalk’s 2019 NHL free agency tracker]

Both players have chosen security over maximizing earning potential.

Sissons, 25, had a career-year last season, scoring 15 goals and 30 points in 75 games.

His AAV is in the ballpark of what was projected. Evolving Wild’s model had him making $2.65 million. What wasn’t foreseen is that term.

EW’s model projected a three-year contract for Sissons with a 30.2 percent probability of coming to fruition. But what percentage of chance did EW give a seven-year contract? 0.4 percent.

Anything is possible, kids.


Scott Billeck is a writer for Pro Hockey Talk on NBC Sports. Drop him a line at phtblog@nbcsports.com or follow him on Twitter @scottbilleck