Records Show MLB, NBA Now Lobbying On Sports Betting In Nearly A Dozen States
Tue, Mar 27, 2018
There are three primary parties involved in the movement toward widespread, legal sports betting.
There are operators, mostly casino owners, who want to offer the product to their customers with as few financial burdens as practical.
Then there are the leagues, pitching themselves as the foundations of integrity and seeking direct compensation from those operators.
And then there are the lawmakers, trying to craft mutually agreeable legislation that reserves a slice for the state.
The National Basketball Association and Major League Baseball recently formed a lobbying alliance to try to shape that legislation nationwide. The two are joined together, traveling from state to state to pitch their blueprint as a model for all to follow. Their lawyers are adept at testifying, but they rely on the relationship between local lobbyists and lawmakers to make more-personal inroads.
Registrations are a matter of public record, so it’s easy enough to follow the paper trail around the country. Last month, Legal Sports Report wrote about league lobbyist activity in at least six states, projecting that list to expand. And it has. As interest in sports betting has continued to build, the leagues have continued to ramp up their efforts.
Another review shows lobbying activity in nearly a dozen states with sports betting bills on file.
Connecticut has been a focal point for the debate surrounding sports betting for months now. Lawmakers there have held several hearings, dedicating as much time to the issue as perhaps any other state so far. Theirs is one of only a few with an enabling law on file, though regulations are still pending some additional work.
It appears a near certainty that Connecticut sports betting will move forward, and the leagues would very much like to influence the specifics. The NBA and MLB have proposed their model legislation to lawmakers there on several occasions, mostly without success. In fact, the pushback against their testimony has created some quotable moments during committee hearings.
In February, the leagues hired lobbyists from both Orrick, Herrington & Sutcliffe and Hartford-based Capitol Strategy Group to represent their interests. The NBA and MLB retain Orrick in several states, usually partnering them with a local group like Capitol Strategy.
The leagues now employ at least four lawyers apiece in Connecticut, paying their two firms a total of $15,500 per month.
Illinois is a leverage state for sports betting, having strong ties to both the “sports” and “betting” parts of the equation.
On the sports side, Chicago hosts professional teams across all four major leagues. Collegiate teams draw significant attention in the midwest, too, of which Illinois has several. It’d be fair to say that sports drive a lot of tourism and revenue to the state.
So do casinos, though. Illinois is a gambling state with ten riverboat casinos, around 30 pari-mutuel betting facilities, and an enormous network of slot parlors. Those parlors alone paid more than $325 million in state taxes last year.
Illinois sports betting remains illegal under state law, but there are a handful of bills on file aiming to change that. And the leagues seem to be taking note. They’ve employed lobbyists from All-Circo and Shaw Decremer Consulting, though the financial terms are not publicly disclosed.
Some of the leagues’ representation in Illinois comes without a price tag, anyhow. Sen. Napolean Harris is a former NFL linebacker, and his sports betting bill is based on their preferred model.
Massachusetts isn’t very far down the road toward legalizing sports betting, but the pieces seem to be coming together. The first two bills were introduced this year, both of them study bills looking to create an exploratory commission. Some of that exploration is already underway separately, too.
The Massachusetts Gaming Commission has begun to educate lawmakers about sports betting, as evidenced by their recent white paper. They’re cautious with their revenue estimates, but they do recognize the consumer benefits that come with a regulated market. The existing and planned commercial casinos are on board with the idea, too.
In February, the NBA and MLB hired Boston-based Smith, Costello & Crawford, and they’ve since added Orrick lobbyists to their registration in Massachusetts. There haven’t been any hearings or testimony yet as far as we’re aware, but it should make for an insightful showdown when the time comes.
New Jersey is the linchpin for legalized sports betting in the US. If it doesn’t win its case in the Supreme Court, the rest of the discussion becomes mostly irrelevant. Most states’ sports betting bills/laws contain activation clauses that hinge on the result.
Experts seem to think NJ will prevail in court, though, and stakeholders are preparing as if they do, too. Monmouth Park racetrack has already installed a sports bar in-waiting, and there are early plans for sportsbooks at more than one Atlantic City casino.
The state already has a sports betting law in the books — that’s the source of the Supreme Court case — but it will still need to establish regulations if it’s permitted to do so. Once again, the leagues will do what they can do get their model adopted in the Garden State, although that seems like a longshot. After all, they’re the ones who have been litigating against New Jersey.
In February, the NBA and MLB hired lawyers from Trenton’s Advocacy & Management Group to lead their New Jersey advocacy.
Cordo & Co ($10,000/month)
Patrick B. Jenkins & Associates ($8,000/month)
The Parkside Group ($12,000/month)
Riddett Associates ($8,000/month)
Stanley Schlein (MLB only, $5,250/month)
New York was on our previous list in February, but it’s worth highlighting again after another look.
There are now at least five NY firms on retainer to lobby for the NBA and MLB. And most of those firms have several lawyers dedicated to the issue. The Parkside Group, for example, has five on the case. In total, the leagues are spending $43,250 per month to lobby in New York alone.
That should be a good indication of the weight they’re put into the state’s efforts, which are moving along briskly. A series of bills have been introduced this year, some of which follow the leagues’ model and some of which do not. The most-recent one contains a modified version of their blueprint, reducing their integrity fee from one percent to 0.25 percent of handle.
It seems league lobbying efforts might be having an effect on NY sports betting.
Apart from New Jersey, West Virginia is the only other state on this list that has already legalized sports betting. WV sports betting became law without a signature from Gov. Jim Justice, and the reasons for his inaction eventually became clear.
For one thing, the governor’s family owns The Greenbrier, one of the five gaming establishments that will be permitted to offer sports betting. Signing off on the bill could be taken as poor optics.
But the governor also expressed sympathy for the leagues’ position during interviews with local media. He indicated that he may call a special session urging lawmakers to revisit the specifics of the law they just crafted. Any change seems unlikely given the broad support at passage, but it does provide a small opening for the leagues’ crowbar.
Legal Sports Report has been aware of lobbyist activities in the state for several months, but records weren’t e-filed back in February. They are now, though, and they disclose registrations from a handful of firms, including Orrick, on the leagues’ behalf.
Lottery representatives say they could be ready to accept wagers within 90 days of a Supreme Court ruling, so time is of the essence.
What do lobbyists do?
Lobbyists are essentially for-hire advocates who tend to have particular pull within their statehouse.
Here, this is from the website of AMG, lobbying in New Jersey:
For over thirty years, our principals have established and cultivated relationships with key decision makers in the state Legislature, Governor’s administration, and regulatory agencies.
We leverage these relationships to promote legislation and regulations that will advance your industry, and stop those that don’t.
There’s not much to add that would make that more clear or more palatable. It’s as unsavory as it sounds, and it’s an integral part of how the lawmaking machine works. The potential for impropriety is one of the reasons records are made public.
What does it mean?
First of all, it means that the leagues have lobbyists in more than half the states considering sports betting bills. They’re almost certainly spending six figures each month, though that number is quite small in comparison to the gains they could realize if their model is widely accepted.
It also means they seem to be growing increasingly pessimistic about their chances to win the NJ sports betting case. They’re at least preparing for the “worst-case” scenario in which states are given free rein to regulate sports betting at their own discretion. A decision in that case could come as early as this week (but more likely within the next couple months).
Incidentally, a recent poll revealed that the majority of sports-betting Americans do not agree with leagues’ involvement in the industry. They are involved, though, and they’re investing significant resources to be as involved as they can be.
You can’t really fault them for trying, either. This window is the leagues’ only opportunity to ask for a share of the sports betting pie. And it’s quite a big pie. The fees they’re seeking will be measured in billions of dollars if their lobbying efforts are widely successful.