How will legal sports betting change the NBA?

Legal Sports Betting – What’s Expected The NBA?

The recent sports betting ruling marked a historic day in U.S sport with the Supreme Court paving the way for states to legalize sports betting. The NBA has been on the front line of the march toward this day for four years now.

So what exactly does all of this mean for the NBA, and what will the effects be? Below are some basic questions answered, to enable us to get a better grasp on the situation.

Q: How will the NBA make money from legalized sports betting?

A: The NBA is trying to get a cut of the takings straight from the bookmaker, or an online mobile site or app. The league is spending a lot of money to lobby state legislatures to get a “royalty” on wagers, which essentially a percentage of each bet wagered on NBA games. Even getting a tiny percentage of each wager, which is likely the best they will be able to negotiate, could be worth billions over the next ten years.

The potential profit is why NBA commissioner Adam Silver has often spoken about his desire for Congress to pass a sports betting bill. It is a lot easier to guarantee a fee from every state through one body than try to pull something together in places where the NBA does not have teams, and little negotiation power. There’s little doubt that the NBA and other major sports leagues care about protecting the integrity of their sports, but ultimately the push for legalized sports betting is an all-out money grab from all involved.

Q: How will teams make money off decision to legalize sports betting?

A: Most NBA teams have sponsorships with casinos and/or owners with ties to a casino. The Phoenix Suns play in an arena with casino naming rights, and money has been finding its way to teams for a while now. But the ruling brings about an array of new opportunities, one notable example being through jersey advertising, which are designed perfectly to promote betting companies and Casinos. Nearly two-thirds of EPL teams in the U.K have casino sponsorships, many prominently placed on the jersey.

Q: Will the players profit from the ruling?

A: No doubt about it. Sponsorships come under the window of basketball-related income, and the players get 50% of the takings. In the recent NBA collective bargaining agreement, the union negotiated that income from gambling/betting falls under BRI and will be shared with the players according. This is the new cash cow for the league.

Q: What impact will legal sports betting have on the NBA salary cap?

A: Following a modest increase in the cap this season, the league is expecting the salary cap to increase by $7 million in the year 2019. The NBA hasn’t given an explanation for this, but it’s expected that a large chunk of that falls under the expectation of the new wagering-related revenue.

It should take a couple of years for states to get wagering operations established fully before the likely money flow to the NBA occurs.

Q: How will you be able to bet on NBA games?

A: Here is how you know the league really wants people betting on games. In some states pushing heavily to pass sports betting laws, the lawmakers want to make people physically travel go to their casinos or racetracks and bet at a kiosk. This is an effort to save or their own current institutions.

The NBA one the other hand has been lobbying states to offer wagering on mobile phones and the ability to register a mobile betting account without having to go to physically go to a location first (which is the current situation in Nevada). The NBA says that push is to compete with the illegal offshore sportsbooks that currently offer simple online sports betting sites. This would likely mean an abundance of betting within arenas during games, which is something that exists in many countries in the world anyway however.

Q: How will this change the way we watch games?

A: Get ready for a lot of sports betting advertising on your televisions. This is a question for the league’s media partners. who will have also run into millions of dollars of potential advertising revenue from new and existing betting agencies. Many people may watch games because they have a bet riding and not out of general interest of the contest.

Q: Will this change the way the NBA handles injuries and DNP’s?

A: Increased transparency is going to be required, and NBA teams will likely need to announce the playing roster a lot earlier prior to tip-off. The NFL, which knows who pays their bills, has been doing this with injury  and practice reports for many years. The NBA has begun this process, though teams still sometimes fudge injury reports, or overstate the injuries to cover for rest days. The screws will need to be tightened here, because there is way too much money involved now.

Q: Is the NBA doing anything to protect the integrity of the game?

A: The NBA already hires agencies to monitor all legal NBA betting all over the world.

Sportradar, in the U.K is one such agency — and they are pretty impressive. Sportrader has busted match-fixing in many sports. These firms of course cannot keep an eye on illegal off-shore wagering, which is why moving to a legal framework benefits both the bettors and the regulators.

But the NBA is pushing for regulations in all states throughout the U.S, such as banning certain prop betting markets that could be easily manipulated. For example, a Prop market for who gets called for a Tech Foul in a game is a market that is easily exploited, so the NBA likely wouldn’t want to allow such markets. For other in-game bets — such as ‘who score the last basket’, the NBA is seeking to keep low limits on these bets to curb the temptation for fixing.