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10/22/2018 12:41:00 PM
'Integrity fee' among likely clashes ahead of legalizing Hoosier sports betting

Dan Carden, Times of Northwest Indiana

INDIANAPOLIS — Hoosier lawmakers are likely to get an earful next year from the state's casinos, professional sports leagues and prospective bettors as they attempt to figure out whether and how to permit sports wagering in Indiana.

A legislative study committee last week got a preview of some of the probable clashes to come, particularly over the issue of "integrity fees."

NBA Senior Vice President Daniel Spillane told the General Assembly's Interim Study Committee on Public Policy if Indiana legalizes sports betting, the NBA wants a 0.25 percent royalty on every wager placed on professional basketball games. 

Spillane said the league deserves a piece of the action, because the NBA is providing the product on which Hoosiers will be betting.

Moreover, he said, widespread sports betting will force the league to incur additional costs aimed at ensuring the integrity of its games, such as monitoring for suspicious bets and play, so the "integrity fee" is needed to make the NBA whole.

Matt Bell, president of the Casino Association of Indiana, said his 11 casino members, which include all the Northwest Indiana casinos except Michigan City's Blue Chip, are not interested in paying integrity fees to sports leagues.

He explained to the committee that while legal sports bets would bring in a lot of money, the casino "win," or what's left after paying successful bets, is only about 3 to 5 percent of the total amount wagered, since sports books try to balance the wagering on each team so a surprise outcome doesn't devastate the casino's bottom line.

Bell said giving the NBA and Major League Baseball, which also is pushing for integrity fees, a slice of the total placed wagers would further shrink the casino win and ultimately produce significantly less sports revenue for the state to tax, according to a recent study of Indiana's sports wagering market by Eilers and Krejcik Gaming.

"That would amount to a $14 million state subsidy for those leagues," Bell said. "They would take that money away from the state of Indiana and hold onto it as leagues."

State Sen. Greg Taylor, D-Indianapolis, also challenged the idea that the NBA deserves any money from sports wagering in a transaction between a Hoosier and an Indiana casino, just because a basketball game is the subject of the bet. 

Taylor pointed out that the NBA sold his personal information to advertisers the last time he bought an Indiana Pacers jersey from the NBA website, and the NBA never sent Taylor a check even though his name and address were the subject of that transaction.

Aside from no sports league fees, Bell said the state's casinos have their own wish list for how sports wagering should operate in Indiana.

Those recommendations include: licenses limited to the 13 existing casinos; regulations overseen by the Indiana Gaming Commission; reasonable taxes and licensing fees; statewide wagering on mobile devices permitted; no betting restrictions on Indiana professional or college teams; "prop bets" and in-game wagering allowed; and casinos authorized to contract with 3rd party sports book providers.

Bell also said sports wagering should be limited to Hoosiers age 21 and older, and the Casino Association will be seeking greater state support for "responsible gaming" initiatives and to stamp out bookies and other forms of illegal sports betting.

"We look forward to a great debate throughout the legislative session," Bell said.

Related Links:
• Indiana sports betting study by Eilers and Krejcik

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