Exclusive: MLB says betting is a “derivative” of sport and leagues should be compensated as such
New derivative language appears for the first time in presentation made to Washington gaming regulator this week
US betting regulation should recognise that sports betting is “derivative” of the sport and the pro leagues should be compensated accordingly, Major League Baseball (MLB) has said.
The derivative language appeared for the first time in a presentation made by the MLB to Washington State Gaming Commission this week, with the league calling for a 0.25% royalty fee on turnover as well as requirements for operators to use official data.
“Statutory and regulatory structure must recognize that sports betting is derivative of the games – i.e., without sports there is no sports betting,” MLB said.
Ryan Rodenberg, an associate professor of sports law at Florida State University, said the language was an attempt to link betting directly with sports.
“Major League Baseball’s description of sports betting as ‘derivative of the games’ is a profound speaking point in the current discourse,” said Rodenberg.
“The word ‘derivative’ has a specific meaning – legal and practical – in finance, but it has no substantive history in the context of sports betting.”
In a major 1977 court case, a federal judge ruled against the derivative argument when the NFL tried to prevent Delaware from offering sports betting.
The court compared it to a hot dog producer being unable to stop a bakery from making hot dog rolls.
In its presentation, MLB said the royalty fee amounted to less than 4% of “the billions of dollars of revenue that operators will generate from taking bets on games.”
The league argued a royalty fee would also encourage sports leagues to “lean in” and help promote and offer products that generate more interest in games and revenue for operators and states.
On data, the league argued its official feed, developed with Sportradar, would helped reduce courtsiding and boost turnover by having more uptime.
Opponents argue there is no need for official data requirement in law, with the league already successful in signing commercial deals with operators including FanDuel and DraftKings.
Fox Bet and bet365 also signed up for the feed this week.