Why is New York debating 'integrity fees' for sports betting?
Reported by Oliver Rudgewick
After the landmark US decision to repeal PASPA and allow US states to legalise sports betting, integrity fees have been in the spotlight. But what are they? And what affect can they have on the US gambling industry?
Integrity fees are, in essence, a tax on sports betting paid directly from betting agencies to sports governing bodies. The fees have been backed by the NBA and Major League Baseball in particular, in order to profit from the proliferation of their sport.
A similar model used in Australia and France, where sports organisations obtain an undisclosed fee from betting agencies dependent on revenues.
The proposed US integrity fees would work as a percentage of the handle, which is the amount of money wagered, not the gross revenue attained from those wagers.
US sports organisations have been backing integrity fees since 2018, when Indiana proposed a bill including a 1% fee to be paid to sport organisations.
New Jersey has already legalise sports betting but decided against imposing fees on betting agencies. New Jersey Democratic state Senate President Steve Sweeney even compared the fees to “extortion”.
New York is also debating integrity fees. The latest incarnation of New York's sports betting bill includes a 0.20% percent fee to be paid to sport organisations based on the handle. But, this is under the provision that professional sports leagues must provide proof of their spending on integrity monitoring to receive compensation.
As it stands, it seems that the only way in which integrity fees can be imposed, is for sporting organisations to agree fees with states, or a federal law which imposes these fees through legislation.