Massachusetts resuscitates the issue of integrity fees in sports betting

Massachusetts resuscitates the issue of integrity fees in sports betting
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As states begin to plan for life after the pandemic, the legalization of sports betting and marijuana provides an easy path to rebuilding budgets. Some state legislatures are getting a head start. At least one may be trying use the chaos of the coronavirus to slip otherwise controversial provisions through the cracks.

Mike Reiss of ESPN.com provides an update on the status of sports betting in Massachusetts. The Massachusetts Senate did not include sports betting in an economic development bill that was passed on Wednesday. The Massachusetts House of Representatives, however, included sports betting in its version of the economic development bill.

Where it goes from here remains to be seen. It makes plenty of sense for every state to have legalized sports betting at this point. The stigma of gambling has disappeared, and any state that doesn’t have it will risk seeing their citizens cross the border to legally bet on sports in a neighboring state.

Here’s the twist in the bill passed by the Massachusetts House: It dusts off the concept of the “integrity fee,” giving one percent of the gross revenue to the owner of the venue that hosts any contests held in Massachusetts.

In the weeks after the Supreme Court made sports betting legal on a state-by-state basis in May 2018, sports leagues made a clunky and ultimately unpersuasive run at getting a piece of a state’s handle based on the notion that legalized betting requires extra steps to preserve the integrity of the outcomes of the games. That argument never took, in large part because most saw it for what it was: An effort to make a quick and easy money grab.

The Patriots, who obviously would benefit from this provision because Gillette Stadium is privately owned, deny any involvement in lobbying for this provision in the House bill.

“Neither the team nor the league asked for, as suggested, this ‘integrity’ fee,” the team said in a statement issued to Reiss. “We’re focused more on the fan engagement elements of the bill.”

However it plays out, Massachusetts and every other state that hasn’t embraced sports betting should do so, but without an integrity fee. As it stands, sports leagues and teams will make billions from increased interest generally and from business arrangements that specifically create partnership and endorsement opportunities with those who want to leverage an official link to the leagues and teams as a way to lure customers. There’s simply no reason to get one or more points off the top.

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