July 31, 2018 - 11:28 am
Updated March 19, 2019 - 1:08 pm
MGM Resorts International has signed a sports betting sponsorship agreement with the NBA, potentially setting a standard for cooperation between sports leagues and casino operators as wagering spreads nationwide.
The move makes the NBA the first professional sports league to have official ties with a legal sports betting house and comes just two months after the Supreme Court overturned a law prohibiting sports betting in most states.
The partnership will allow MGM Resorts to use official NBA and WNBA data and branding on a non-exclusive basis across the Las Vegas-based resort operator’s land-based and digital sports betting offerings in the United States, the company said in a statement.
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In turn, the NBA will promote MGM Resorts across its digital assets, including NBA TV, NBA.com, the NBA App and NBA social media platforms.
The NBA and other sports leagues have been lobbying states to impose a fee on sports betting, something casino operators have vehemently opposed. The so-called integrity fee would be paid to the leagues and based on the amount wagered. State legislatures have rejected the idea so far.
MGM will pay at least a $25 million fee to the NBA over three years, according to ESPN, which cited industry sources. MGM spokesman Brian Ahern would not tell the Las Vegas Review-Journal whether the operator will pay a fee to the league. The NBA did not respond to a request for comment.
“It is a win-win for both as it legitimizes sports betting now and the NBA gets some money,” said Brian McGill, an analyst at New York-based Telsey Advisory Group. “The NBA realized they are not going to beat (the casino operators), so they might as well join them.”
Paying a fee for official data makes sense because casino operators need it for in-game betting, one of the fast-growing segments of the sports wagering industry, said David Katz, an analyst at Jefferies in New York.
“That is the one lever that the leagues have in this negotiation,” Katz said. “If they want the flow of data, they have to pay the leagues for it.”
The ability of MGM — and other casino operators — to advertise on league websites and TV will likely increase how quickly people around the nation take up sports betting, McGill said.
Union Gaming analyst John DeCree agreed, saying MGM and other Las Vegas giants are still unknown to many outside Nevada.
“Gaming companies are not as common household names as some other industries. The partnership with the NBA will improve commercialization” and “expand MGM’s reach to new consumers,” DeCree said.
Shares of MGM rose 60 cents, or 2 percent, to close at $31.37 Tuesday, near a one-month high.
First of many deals
The American Gaming Association hailed the deal and said it expects the pact to be the first of many between resorts and leagues.
“Sports betting deals should be done through contracts, not statutory obligations,” said Sara Slane, senior vice president for public affairs for the group, referring to the integrity fee. “Today’s announcement highlights the symbiotic partnership between casino gaming companies and sports entities.”
DeCree said the NFL will be the next most important league for casinos. Professional and college football account for about 40 percent of wagering in Nevada, followed by basketball at 30 percent, he said.
NFL spokesman Brian McCarthy declined to comment on whether the league is looking to make a similar deal with MGM or another resort operator.
NHL Deputy Commissioner Bill Daly said the league did not have any comment on MGM’s agreement with the NBA. But he said he expects both the NHL and its clubs “to become active in this space.”
Caesars Entertainment spokesman Rich Broome hinted it could reach similar deals.
“The sports betting market will evolve over several years. Current and new partnerships will be a key element of our customer engagement strategy,” said Broome.
Boyd Gaming Corp. spokesman David Strow declined to comment on whether the company is considering a similar deal with the NBA or other leagues.
A spokesperson for Penn National Gaming did not return a request for comment.
MGM’s NBA ties
MGM has been on a tear this week in sports betting, which is expected to become a multibillion-dollar industry for casino operators in several years.
On Sunday, the company announced a partnership with Boyd Gaming that would potentially give it access to online sports betting in an additional eight states.
MGM also announced it had formed a $200 million joint venture with GVC Holdings, one of the world’s largest sportsbooks, to use its sports betting technology across the U.S.
As gaming revenues have stagnated, MGM CEO Jim Murren has made sports entertainment a bigger focus for the company in recent years.
It bought the WNBA Las Vegas Aces in December and is the presenting sponsor of the annual NBA Summer League at the UNLV arenas. MGM also owns 50 percent of T-Mobile Arena, which hosts major sporting events.
DeCree said Murren is pushing to get an NBA team at T-Mobile. The CEO said in May that he thought Las Vegas would get an NBA team in three to five years. MGM would likely be the biggest beneficiary among Las Vegas resort operators.
“Murren is adamant about being a pioneer and leader in sports betting and sports entertainment,” DeCree said. “There are a lot of advantages to be the first mover, and Murren is really hustling.”
Murren declined to speak with the Review-Journal on Tuesday.
Contact Todd Prince at 702-383-0386 or firstname.lastname@example.org. Follow @toddprincetv on Twitter. Review-Journal staff writers Michael Gehlken, Adam Hill and Richard N. Velotta contributed to this report.