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

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Penguins GM on Maatta over Johnson, future for Malkin and Letang

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With trades already heating up during the trade-friendly time that is the week surrounding the 2019 NHL Draft, the most fun activity is grading the impact of trades … but imagining what else might happen is almost as fun.

Pittsburgh Penguins GM Jim Rutherford didn’t really make it seem like he’s eager to trade Evgeni Malkin or Kris Letang during an interview with 93.7 The Fan on Monday, but Rutherford also didn’t slam the door totally shut by guaranteeing that Malkin and Letang will be back, either.

Fair or not, some will allow their imaginations to go through the roof after Rutherford merely didn’t close the door and lock it.

Not pursuing those trades, but would listen?

During the interview, Rutherford comically referenced Wayne Gretzky being traded as Rutherford was essentially claiming “never say never,” as the Pittsburgh Post-Gazette’s Matt Vensel transcribed.

“There’s been great players traded in this league,” Rutherford said. “If somebody comes along with a package that makes sense for the Penguins, we have to look at it. These are not, the guys that you mentioned, are not guys that I’m pushing to trade.”

Rutherford also said that Malkin and Letang are the “kind of players you win championships with,” and stated that he believes they’re still great players.

For plenty of Penguins fans, this is mostly a relief, especially if Rutherford is really just giving such trades “Dumb & Dumber” odds.

The most important Malkin-related quote may have surfaced a week ago, as Rutherford explained that things seem to have smoother over between the team and player, via The Athletic’s Josh Yohe (sub required):

“At the time you asked me those questions, it was hard to zero in on too many people because I was thinking about making a lot of changes,” Rutherford said while referencing spicier comments after the Penguins were swept by the Islanders. “But I’ll say this: I believe in Geno Malkin. He came off a year that wasn’t up to his standard last year. We all know that. But he’s a great, great player. I know how good he is, and I know very well what he can do for this team. I wasn’t going to 100 percent commit at that point in time. But in the back of my mind, I knew he was going to be part of this team going forward. And you know what? He was aware of that, too.”

(Anyone else think that “I believe in Geno Malkin” could be a hot-selling shirt in Pittsburgh?)

Rutherford reiterated another stance from a week ago: that he doesn’t expect to trade Phil Kessel. His comments in that regard may calm down those worried about a reckless Letang/Malkin trade, too, as a lot of Rutherford’s language is “I’m not looking to trade X, but I have to at least listen …”

With all of that in mind, it’s maybe most pressing to hear Rutherford speak about more plausible trade targets on his team.

Jack of no trades?

Interestingly, Rutherford didn’t exactly fan the flames about Jack Johnson being traded.

During Monday’s spot with 93.7 The Fan, Rutherford seemed to indicate that, with Olli Maatta traded for cap space, the Penguins may not try to get rid of Johnson’s contract. Surprisingly, Rutherford also claimed that Johnson was not involved in the trade that Phil Kessel reportedly nixed, which would have sent Kessel and Johnson to the Minnesota Wild for Jason Zucker and Victor Rask.

Moving Maatta did get the Penguins out of the most immediate “trouble” that might surface from the salary cap possibly being closer to $82 million than the expected $83 million for 2019-20 … but not at least projecting much interest in trading Johnson should be disappointing for Penguins fans.

It would have been startling enough last summer when the Penguins handed Johnson – a deeply flawed, and not especially young, defenseman – a contract that included a $3.25M cap hit. But it was downright bewildering that the now-32-year-old also received beefy term, as that problem deal runs through 2022-23.

Yes, the Penguins’ defense needs help, but there’s an uncomfortable argument that getting rid of Johnson would count as “addition by subtraction” even before you factor in getting rid of that $3.25M cap hit.

While Maatta’s market value was almost certainly far better than JJ’s value (the Penguins landed a solid package for the defenseman) it’s cringe-worthy to consider an either/or possibility coming down to Maatta vs. Johnson. Especially since, frankly, Maatta isn’t that much more expensive than Johnson, what with Maatta coming in at $4.083M per season.

Penguins fans might want to look away at this Sean Tierney visualization of the team’s defensemen in 2018-19, which uses Evolving Hockey’s Goals Above Replacement (GAR) data:

(You can slice it up in many other ways, and it usually doesn’t come out looking much better.)

Again, it’s possible that the Penguins simply didn’t have any real offers to get rid of Johnson. Maybe Rutherford simply didn’t want to admit it, or maybe there was a part of him that hopes that projecting some positivity might keep the door open to get rid of a big mistake.

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Ultimately, the Penguins’ window of contention could close rapidly, so it’s important to get this stuff right.

In the case of trading Malkin or Letang, the best move would almost certainly be to stay put. Meanwhile, if the Penguins aren’t exploring avenues to get rid of Johnson-type problems, then the Penguins are leaving opportunities on the table. Finally, with Kessel, the option just might not be there — whether it would be smart to trade Kessel or not.

Elliotte Friedman points to the Penguins being one of the most aggressive teams in the latest edition of “31 Thoughts,” so they’re certainly a team to watch over the next week or so.

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.

Preds hire Scuderi, Bordeleau, Rook as development coaches

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NASHVILLE, Tenn. (AP) — The Nashville Predators have hired Rob Scuderi, Sebastien Bordeleau and Dave Rook as development coaches to help polish their prospects for the NHL.

General manager David Poile announced the hirings Tuesday. Scuderi will develop defensemen, with Bordeleau working with forwards and Rook with goaltenders. They will work with Scott Nichol, the Predators’ director of player development and general manager of their AHL franchise Milwaukee.

The 40-year-old Scuderi retired from the NHL in 2016 after 12 years and 783 career games with the Penguins, the Kings and Blackhawks, winning two Stanley Cups.

Bordeleau played three seasons with Predators from their start as an expansion franchise. He was skills coach for the Montreal Canadiens each of the last two seasons and this past season for the Canadiennes of the now-defunct Canadian Women’s Hockey League.

Rook has been a goaltending consultant for Nashville the past five seasons, helping Predators goalies Juuse Saros and Troy Groseneck. He was goaltending coach for Columbus between 2009 and 2011.

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

Trade: Flyers add Braun to blue line as Sharks shed salary

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One day after the San Jose Sharks handed Erik Karlsson $92 million over the next eight years, they shipped defenseman Justin Braun to the Philadelphia Flyers in exchange for a 2019 second-round pick (No. 41 overall) and a third-round selection in 2020.

“Justin has been an important part of our organization since we drafted him in 2007 and over that time, we have seen him develop not only as a player on the ice but as a man,” said Sharks general manager Doug Wilson in a statement. “He has played a large role in our team’s success since joining the Sharks roster, including appearing in three Conference Finals and competing for the Stanley Cup in 2016. I want to thank Justin and his wife, Jessie, for their commitment to the Sharks organization and wish them all the best in their future.”

In the wake of the Karlsson extension Wilson needed to shed some salary off the Sharks’ cap. This trade does that, freeing up $3.8M from their books for the 2019-20 NHL season. Braun has one year left on his deal and is eligible to become an unrestricted free agent in 2020.

Wilson and the Sharks now have a little over $16M in cap space, per Cap Friendly, to try and re-sign some of the team’s restricted free agents like Timo Meier and Kevin Labanc, and figure out what to do with UFAs Joe Pavelski, Joe Thornton, Joonas Donskoi and Gustav Nyquist.

“Under a cap system, choices and decisions need to be made,” Wilson said on Monday. “I don’t think anybody should rush to conclusions on anything. There’s many ways to accomplish different things.”

The Braun acquisition continues an aggressive off-season by Flyers GM Chuck Fletcher. In the span of a week he’s acquired the negotiating rights to pending UFA Kevin Hayes, swapped defensemen with the Washington Capitals by shipping Radko Gudas in exchange for Matt Niskanen, bought out Andrew MacDonald‘s contract, and now added Braun.

This now gives the Flyers a blue line with a left side featuring Ivan Provorov (RFA), Shayne Gostisbehere, Sam Morin, Robert Hagg, and Travis Sanheim (RFA). Who will be on the move out of that group? Judging by how some NHL GMs are talking this week, it could be a very busy summer of player movement.

“I think there’s been more conversation, more communication between the GMs in the last month than maybe ever since I’ve been a GM,” Wilson said. “There’s so much competition, especially for the high-end player. … There’s a lot of things going on.”

MORE:
Sharks set to sweat salary cap after Karlsson extension
Teams looking for defense should seek trades, not free agents
Free agent market for defensemen looks thin without Karlsson

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Sean Leahy is a writer for Pro Hockey Talk on NBC Sports. Drop him a line at phtblog@nbcsports.com or follow him on Twitter @Sean_Leahy.

Lightning re-sign Coburn to $3.4M, 2-year deal

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TAMPA, Fla. (AP) — The Tampa Bay Lightning have re-signed defenseman Braydon Coburn to a $3.4 million, two-year deal.

Coburn will count $1.7 million against the salary cap in each of the next two seasons. General manager Julien BriseBois announced the contract Tuesday.

The 34-year-old had four goals and 19 assists in 74 games last season when he averaged 17:08 of ice time. Coburn took a $2 million annual pay cut from his last contract, which should help Tampa Bay remain among the NHL’s top Stanley Cup contenders.

Coburn has 228 points in 924 games with the Atlanta Thrashers, Philadelphia Flyers and Lightning. Tampa Bay acquired him in 2015.

This deal comes less than a day after two-time Norris Trophy winning defenseman Erik Karlsson re-signed with San Jose. The Lightning were considered among the favorites to sign Karlsson if he became a free agent.

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