As the push for nationally legalized sports betting continues, the NBA has stated it would like to receive one percent of every bet made on its games, which would of course result in a large amount of additional revenue for the league. That money would be taken off the top from sports-gambling operators such as William Hill, which runs more than 100 sports books in Nevada.
According to William Hill, however, the NBA’s one-percent cut could amount to a much larger percentage of sports-book revenues.
“These guys are great marketers,” William Hill CEO Joe Asher said on Ferrall on the Bench. “It’s not one percent. They say one percent. It’s 20 percent. It’s 20 percent of revenue. Forget about paying (our VP’s) salary and all of our marketing costs and all of that other stuff. They want 20 percent off the top. It is just an unbelievable money-grab. You know who should be the most upset abut this? CBS and all the other big media companies.”
Asher said that the NBA’s cut – an “integrity fee” – would limit marketing opportunities for gambling operators, which would result in less revenue for media companies.
“What’s the one controllable expense in this business?” Asher asked. “It’s your marketing costs. You can’t really do much with your payroll costs or your technology costs – all your infrastructure costs. They’re fixed. The variable cost in the business is how much you’re going to spend on marketing. if you have to pay 20 percent off the top to the NBA, there’s that much less that’s left for marketing. So we’re not going to be able to advertise on CBS or ESPN or any other network. Look, there is plenty of money to be had by all parties involved in this, as long as people understand what makes for a healthy sports-betting ecosystem.”
The NBA’s announcement wasn’t at all random. The Supreme Court is revisiting the Professional and Amateur Sports Protection Act of 1992, a federal law that greatly restricts sports betting in the United States.
“I was in the court room in December in Washington when the Supreme Court heard the case, and you couldn’t have been in the court room and not felt good,” Asher said. “It seemed to be positive, but you don’t know. You’re reading tea leaves and trying to guess by the judge’s questioning what they’re thinking, so you don’t really know.”
Asher said the Supreme Court will render a decision between February and June.