Major League Baseball Teams and A New Revenue Stream: Online Gaming Business Partners

Major League Baseball Teams and A New Revenue Stream: Online Gaming Business Partners

In the wake of major financial losses incurred during a pandemic-shortened 2020 baseball season, where no fans watched the games in person before the playoffs, Major League Baseball teams looking for new revenue streams may soon follow the Washington Nationals and Chicago Cubs’ lead.

“It’s a good idea,” a league source said of the Nationals’ announcement on Monday that the club had entered into a “multi-year, exclusive partnership” with digital gaming company BetMGM. The business arrangement includes the opening of a sportsbook next to Nationals Park, the team’s home stadium in the capital.

The Cubs in September last year did a similar business, announcing a partnership between the stored franchise and the Daily Fantasy Sports (DFS) online betting company, DraftKings.

A Supreme Court ruling almost three years ago – when the country’s highest court lifted the federal ban on legal sports betting in states – paved the way for MLB and the 30 teams to potentially make billions in new revenue. However, there are still some legal hurdles to remove for teams considering such business proposals, and whether players should be compensated with some of the revenue made through these partnerships. And there are ethical and moral concerns that come to mind when considering baseball’s scary history of gambling.

“MLB promotes these conditions,” said economist Andrew Zimbalist, a professor at Smith College and a Forbes contributor. “If more people invest, more people will watch, and that will increase TV revenues. It will also allow teams to increase ticket prices – depending on, of course, when fans are allowed to return to stadiums. It’s bigger fan avid. One of the things sports leagues struggle with is the proliferation of the internet and all the different types of entertainment sources. There is more competition than ever before.

“If you’re going to build a fan base, sports betting will do it.”

However, for the Yankees and Mets to capitalize on a potentially lucrative partnership, state laws must be ratified. New York Gov. Andrew Cuomo earlier this month announced a proposal to authorize mobile sports betting in the state, and now the proposal must go through the state legislature.

“Under Governor Cuomo’s proposal, the New York State Gaming Commission will send a request for proposals to select and license a sports operator or platform to offer mobile sports betting in New York,” read part of a press release from Cuomo’s office. “This operator or platform must have a partnership with one of the existing licensed commercial casinos.”

Cuomo also mandated that all mobile apps used for sports betting must include protection against abuse and addiction, although the press release did not outline any such guarantees.

“New York has the potential to be the largest sports betting market in the United States, and by legalizing online sports betting, we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the Covid-19 crisis. , ”It says in Cuomo’s press release.

Baseball’s hit-hit king, Pete Rose, was given a life ban from the sport for betting on baseball games, including those involving the Cincinnati Reds, the team he played for and managed in the 1980s. And eight members of the 1919 Chicago White Sox, including “Shoeless” Joe Jackson, were banned for life for throwing the World Series that year.

A sports lawyer said that although these business partnerships between teams and online gaming companies are “an alternative source of revenue, especially if there is no attendance this year,” there should be rules to prevent threats to the integrity of the game.

“If I’m a gambler and I know you get Batter X out with a curveball when he gets two strikes, you can be sure I’ll bet on a pitcher trying to curveball Batter X to infinity every time he’s 0 -2 in the count, ”said the sports lawyer. “On the flip side, teams need to generate revenue that they can after last year.”

Following the Supreme Court ruling in 2018, former baseball commissioner Fay Vincent went a step further in an interview with New York Daily news, and asked if a “gaming commissioner” would be appointed to prevent a black cloud from encircling the sport.

“How are we going to handle a completely blank sheet?” Vincent asked in 2018 Daily news interview.

But Zimbalist said he believes professional baseball players – whether they earn a minimum or as high as $ 30 million a year – will not be as likely to “become prey” for gambling offenders in this brave new world of the sport that has business relationships with legal sports betting .

“It’s hard for me to imagine,” said Zimbalist. “These players are multimillionaires, so I do not think it will have harmful effects on the players. Maybe it’s judges or judges who take the case. My biggest concern would be for college athletes and college sports. These athletes fit the circumstances of the Chicago Black Sox players. ”

Zimbalist also said that MLB players “absolutely” should seek to receive additional compensation from this type of deal.

“The players provide the source of the games,” said Zimbalist. It may be easier in wage leagues (like the NBA), where wages are directly linked to income, although unions must ensure that gaming income is included in defined income.

“In MLB, it should be calculated that as team revenues grow, players become more valuable to teams (owners) and should be able to order higher salaries,” Zimbalist added.

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