PGA Wants to Charge Royalty Fees for Sports Betting Apps
PGA Tour Vice President David Miller said the pro golf tour does not object to sports betting on PGA events, but he would like to see the PGA receive a royalty fee for mobile and online sports betting. The PGA royalty fee would be in lieu of the kind of “integrity fee” that the NBA and MLB have proposed.
The royalty fee would be based on the PGA’s intellectual property and associated data. Since the PGA and its players produce the contests bettors use for wagers — along with the sports statistics on which the outcome of the bets hang — David Miller believes the professional golf association should be able to charge a fee for them.
Speaking in New York City at the Hashtag Sports media innovation event on a sports betting and data right panel, David Miller said legal and licensed online sports betting could help grow viewership of golf on television. According to Miller, though, indirect revenue growth is not enough.
Sports Betting Apps Are the Future
While sitting on the panel for “Live and Kicking: Why Official Data Holds the Keys to Success”, David Miller described the idea of a royalty fee. Miller said, “It’s not realistic to think that people will go to casinos to fund their accounts or to bet.”
It’s going to happen on phones, and you’re not going to eliminate the illegal market if it’s limited to physical casinos only.”
It is a solid argument. In a world built around convenience, the bulk of sports bettors want to use their smartphone to bet on sports. If they have to drive to a physical location, then sportsbooks are going to have minimal impact.
In-State Sports Betting Apps
States must legalize intrastate sports betting to make the new gamble feasible. While it is still illegal to bet on sports across state lines (1961 Wire Act, 2006 UIGEA), federal laws do not make it illegal to wager using a desktop computer, tablet computer, or smartphone for sports wagers inside the state’s boundaries.
In at least one case, though, US state-level lawmakers have designed a law which requires a sports bet be placed inside a casino’s sportsbook. Pennsylvania’s sports betting law included such a stipulation. It is shortsighted.
Are Games Intellectual Property
The idea of “intellectual property” was tried before by the NFL, when fantasy football sites first became mainstream. The NFL argued that its stats and game information was its intellectual property, so independent fantasy football websites should be shut down. In the NFL’s vision, only the official NFL website could use its stats or host a fantasy football league. The attempt to enforce that claim proved a dismal failure. The NFL had allowed newspapers to print stats for decades, because they knew it was good publicity. Their call for intellectual property fees in the Internet age fell on deaf ears.
Of course, the proliferation of fantasy football online was a boon to the NFL, fueling 20 years of growth and providing immense amounts of free publicity. The NFL’s attempts to squelch fantasy sites was similar to Hollywood’s attempts to squelch the VHS video stores in the early 1980s. Lucky for them, they failed.
The PGA learned its lessons from such failures and has a different strategy. David Miller, who is also assistant legal counsel for the PGA, wants lawmakers to require royalty fees in sports betting legislation. Legal measures will be ineffective, but state gaming laws could institute royalty fees for sports betting apps.
Royalty Fee or Integrity Fee?
David Miller’s suggestion might or might not work out, but it is a better argument than the integrity fees being put forward by NBA Commissioner Adam Silver and MLB Commissioner Rob Manfred. The NBA and MLB argue that the leagues should be compensated for maintaining the integrity of the sports — essentially combating match-fixing and point-shaving.
The problem with that argument is the major sports league have maintained for decades they are doing all they can to protect the integrity of their respective games. If so, then their argument for an integrity fee to compensate them for the extra resources they’ll need to expend now makes little sense. Adam Silver picked up the integrity fee idea from journalists discussing the idea, but integrity fees might not be well-considered.