Source: DGS Media
“Tension building between the league and its teams”
JULY 5, 2018 (DGS Media) — Daniel Etna, Partner and Co-Chair of the Sports Law Group at NYC law firm, Herrick Feinstein LLP, which has led council on advertising and sponsorship contracts for both the New York Yankees and the Chicago Cubs, is speaking out against the MLB’s stance on sports betting.
Speaking exclusively with DGS Media, which tracks the legal gambling industry on its web site, NJOnlineGambling.com, Etna described a growing tension between the MLB and its teams over the league’s decision to prevent teams from accepting advertising from sports betting operators — a move some see as an act of petulance after numerous failed attempts by the league to secure a piece of the betting pie through the imposition of so-called ‘integrity fees’.
“First of all, I really think the MLB fumbled the ball by asking states to mandate that sports betting operators pay integrity fees. The MLB initially asked for way too much — an impossible number — and the whole thing was not well thought out,” Etna said.
The MLB has made several failed attempts to have the so-called ‘integrity fees’ included in state sports betting legislation, which would provide the league a new revenue stream directly tied to legal sports betting. The attempts have so far failed, including on June 11th, when New Jersey Gov. Phil Murphy signed the final bill legalizing sports betting in his state after dropping the section on integrity fees from the legislation.
Just two days later, in what DGS Media analyst Adam Small described as a ‘clearly retaliatory’ measure, the MLB sent a legal memo to its teams, reading in part: “Clubs may not at this time enter into any (advertising) relationship with a pure sports book, or with a casino with a sports book to the extent that the arrangement involves sports betting.”
“Essentially, what the league did was say that if it can’t strong-arm gambling revenue for itself in what amounts to kickbacks, legislated and enforced by the states — it is not going to allow its teams to benefit from potentially lucrative revenue sources for themselves,” Small said.
That dichotomy is becoming a source of tension between the league and its teams, according to Etna, whose clients include the Chicago Cubs and New York Yankees. “The ban on advertising affects the MLB teams on a local level, which means that’s not shared revenue. Any money a team generates in local markets goes directly in its coffers. There is absolutely tension building between the league and its teams, because the teams are missing out on a potential revenue stream,” Etna told NJOnlineGambling.com. “The requests for integrity fees, and things like this advertising ban — they’re black eyes for the MLB and the other leagues.”
Etna said that legal sports betting is poised to bring with it new, fertile sources of ad revenue and media rights, both areas he’s extremely familiar with helping sports franchises navigate and that sports betting will get more eyeballs watching on TV and more fans in the seats — something both the MLB and its teams should be concerned about.
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DGS Media operates NJOnlineGambling.com, an independent resource created by a team of iGaming professionals exclusively for New Jersey online gambling enthusiasts and industry followers. The web site covers the latest industry news, reviews of Garden State gaming operators, game guides and more.
In late 2017, DGS Media also launched PennBets.com, a similar resource for Pennsylvania residents.