NBA Commissioner Pushes for Fee on Sports Betting

Business News

The NBA and MLB have changed course on sports betting, and Americans don’t like it.

After the two leagues announced that they’d be willing to lobby for sports betting if, among other requirements, they got a 1 percent cut of sports bets placed in New York, the Sharkey Institute at Seton Hall University did a survey about the 1 percent demand and found that nearly seven out of 10 people opposed it.

Greg Gemignani, a Las Vegas-based lawyer with Dickinson Wright, said the 1 percent take may not seem like a lot but, considering that Las Vegas books cleared a 0.7 percent profit off Super Bowl betting this year, that 1 percent is harsh.

“If you’re paying one percent of handle that far exceeds what the books actually earned off the Super Bowl,” Gemignani said. “Whether 1 percent is doable or difficult would depend on a book-to-book basis.”

On average, he said that Las Vegas books earn about 4.8 percent from standard betting but have to pay state and federal taxes on that amount.

What the NBA and MLB are asking, he said, doesn’t make sense for books from a business perspective.

“I think there’s a role for major league sports to participate, but I think taking a percent of handle is huge. If you don’t win when your income is relatively low, you’re going to end up losing money and, in the end, these are businesses,” Gemignani said. “They still have to pay taxes, payroll, technology and licensing fees, and information service fees.”

He went on to note that the federal government could do books a favor by removing the government’s 0.25 percent excise tax on gambling revenue.