The NBA and the MLB are lobbying for the inclusion of an “integrity fee” made payable to the leagues in all proposed sports betting legislation. They want this fee to be equal to one percent of the sports betting handle over a given period. This would be equivalent to about 20 percent of the revenue of the operator.
The reason for this fee is to have a comprehensive monitoring system. It would help to protect against game fixing and corrupt behavior. There is always an incentive to manipulate games when betting is involved.
Sports leagues lobby for an integrity fee
In 2018, the US Supreme Court struck down the PASPA federal law that made sports betting illegal in most states. In the months after this, many states passed legislation to legalize sports betting. The sports leagues started recognizing that sports betting was very lucrative. It could be even more so in the future with the legalization of online sports betting in many new states. They began to lobby for the inclusion of the integrity fee.
Sportsbooks oppose the fee
Online sports betting operators argue that they already have a struggle to earn an appreciable annual profit. They are responsible for paying tax on sports betting revenue according to a tax rate set by the state where they operate. There is also a federal excise fee of 0.25 percent of the handle.
Possible knock-on effects
The integrity fee could result in such a tight profit margin that sportsbooks would have to put the price up on straight bets.
Another negative effect could be sports bettors rather using illegal sports betting sites. This would counteract the positive effects of legalizing sports betting. These unlicensed sites do not have to follow the rules and regulations, offer fair games, or ensure responsible betting.
Is a compromise on the horizon?
The leagues may get their way in some states, but there are likely to be others that will push through legislation without including an integrity fee. This could result in competitive disadvantages for sportsbooks in certain states.
Sports betting is becoming more popular all the time as it is fun, requires skill, and can result in decent rewards. It can have a positive impact on a player’s intelligence level as it requires looking at statistics and making informed decisions.
In Kansas, a new sports betting bill introduces an integrity fee of .25 percent of the handle and states that the fee can never go to more than five percent of the sports betting revenue for the given period. This is not acceptable for those who believe in applying no fee at all. However, compromises such as this could help to bring the sportsbooks around to the idea of an integrity fee in the future.