The National Basketball Association (“NBA”) has reached a deal with MGM Resorts International (“MGM”) to create a partnership for legal sports betting and wagering. The partnership comes on the heels of this year’s U.S. Supreme Court ruling that allows for legalized sports gambling outside of Nevada. It also makes the NBA the first major American sports league to partner up with a sportsbook operator.
As the official gaming partner of the NBA and WNBA, MGM receives the rights to use league highlights, league and team logos, and official data at its casinos and digitally through its sports betting apps. Additionally, MGM will be promoted across the NBA’s digital platform, which includes NBA TV, NBA.com, social media accounts and other applications.
The financial terms of the deal are undisclosed, though it is assumed the compensation package takes into consideration MGM’s use of the NBA’s valuable intellectual property and official data, as well as wagered amounts on NBA and WNBA games. According to ESPN, some industry sources have suggested the partnership has a three-year term valued at a minimum of $25 Million. It should be noted that even with this partnership with MGM, the NBA has reserved the right to license its official data to other casinos and betting operators.
The NBA’s involvement in such a deal is not entirely surprising because the NBA had been lobbying to legalize sports betting and now that states are able to legalize wagering on sports, the NBA (along with Major League Baseball and the PGA) has been lobbying states that are considering legalizing gambling to pay the sports leagues "integrity fees," controversial fees which are based on the amount wagered on the games and events of each respective sport. The NBA’s deal with MGM affirms the league’s interest and intention of participating in gambling revenue streams.
The deal between the NBA and MGM is likely the first of many such partnerships between American professional sports leagues and betting operators because the money involved is simply too great for professional sports leagues to ignore. It seems quite possible that the NFL will make similar deals sooner rather than later because it is the most valuable American sports league and the sport that receives the most betting activity in the United States.
It will be very interesting to see how legalized sports betting in conjunction with sports leagues plays out over the next several years. There are valid concerns about directly involving sports franchises with gambling entities. Will it corrupt sports (and some athletes) or will it simply refine a system and offer new revenue streams to sports leagues? Stay tuned.