After decades of steadfast and unified opposition, cracks are emerging in the coalition of U.S. sports leagues that has for years impeded the expansion of sports betting outside of Nevada.
In a New York Times op-ed last Friday, National Basketball Association commissioner Adam Silver broke ranks to advocate that the U.S. follow the model set by European countries, legalizing and regulating sports wagering.
“Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards,” Mr. Silver wrote.
His remarks came just a month after the NBA joined with other major sports leagues to file a lawsuit blocking an effort by Governor Chris Christie to decriminalize sports betting in New Jersey.
Mr. Silver’s argument is one used by other proponents of expanding legalized gambling: people will find a way to wager whether it is legal or not. He claims that some $400 billion is wagered on sports illegally each year in the U.S., and that legalization with regulation is the only way to provide fans a safe way to participate.
But other leagues, such as the National Football League and the National Hockey League, maintain their longstanding stance of opposing any expansion of sports wagering, which they have historically shunned because of match-fixing scandals and other image problems.
“I can’t say that the National Hockey League is in the same place conceptually as Adam is right now, and that has to do with some of the premises on which he bases his ultimate conclusion, several of which we might question, or at the very least, want to test more rigorously,” said NHL Deputy Commissioner Bill Daly.
The NFL says that its stance in opposition to sports betting had not changed. A Major League Baseball spokesperson declined to comment.
Yet while the views of the leagues regarding traditional sports betting are in conflict, they have simultaneously endorsed – in unanimity – a fast-growing, unregulated new genre of sports wagering known as daily fantasy sports. “All of the sports leagues are embracing some form of online gaming. The only difference is that Adam Silver has been refreshingly honest about it, whereas the other sports league commissioners seem to be engaged in double talk,” said Marc Edelman, a sports law consultant.
Last week, the NBA announced a partnership with FanDuel, the largest “daily game” operator, in exchange for an equity stake, while the NHL announced a similar deal with DraftKings, the second largest operator in the space and a partner of Major League Baseball. While neither firm has an agreement with the NFL, they have forged agreements with several individual NFL teams.
Daily fantasy games, in which users select teams of real-life players and wager on those teams in peer-to-peer matchups and large tournaments, some with payouts as high as $10 million, are exempted from a 2006 law cracking down on illegal internet gambling. These games have since exploded in popularity in the U.S. as an alternative to traditional sports gambling.
“We would argue that the difference between gambling and what sites like FanDuel are doing is very thin,” said Adam Krejcik, a gaming analyst at Eilers Research, who describes the leagues’ diverging position towards the two forms of wagering as “ironic”. “On the one hand you have all these associations saying how they detest gambling, but then they turn around and say they want to be a part of FanDuel.”
Daily fantasy games are a booming subset of the broader fantasy sports industry, which boasts 42 million players in North America, and which is seen by many leagues as a key driver of fan engagement and consumption. “The conclusion is that it is more profitable, at least in short run, to partner with these contests rather than seek to make them disappear,” said Edelman.
While some question the legal grounding of daily fantasy games, proponents are quick to point out that neither federal nor state authorities have raised a credible challenge to their legal status. “Daily fantasy games are legal and betting on sports outside of Nevada is not. We feel very comfortable that the law is clear on that,” said Sal LaRocca, the NBA’s president of Global Operations and Merchandising, speaking about the FanDuel partnership.
