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Why Bengals, Reds and other Ohio teams oppose sports betting

11th November, 15:32

COLUMBUS - Sports leagues long opposed legalized sports gambling, but now, with legalization imminent, they're not totally opposed to the idea.

But they do want a cut.

The leagues want sportsbooks to use data compiled by their teams and authorized partners for certain wagers. Two states, Illinois and Tennessee, have passed laws requiring use of "official league data" for in-play bets. In-play bets are placed throughout a game and the odds change with every change in possession or play.

In Ohio, local teams have banded together to lobby lawmakers.

The Reds and PGA Tour spoke out against the bill last month because of the data issue. They've since been joined by most of Ohio's professional teams: the Bengals, Columbus Crew, Cleveland Browns and Cleveland Indians.

The Cleveland Cavaliers, whose owner Dan Gilbert also owns Cleveland's Jack Casino and the Jack Thistledown Racino, has not taken a public position on the bill.

Ohio has two pending sports betting bills, one each in the House and Senate. The main point of difference has been which agency should regulate gaming: the Ohio Lottery Commission or the Ohio Casino Control Commission.

Ohio's public universities and independent colleges have said they want no part in it.

The teams say they go to great lengths to collect accurate data that would add integrity to the sportsbook experience. Inaccurate or "pirated" data from unofficial sources could lead to angry fans who turn their ire toward local organizations, the Reds wrote to lawmakers last month.

This is essential, they say, for bets on events such as number of passing yards by a quarterback or rebounds in one quarter of a basketball game.

"We believe official league data is essential to ensuring the integrity of sporting events and to protecting consumers by ensuring that the information used to settle wagers is correct and timely, something that can only come from official data provided by the sports leagues themselves," Bengals Director of Business Development Bob Bedinghaus said in a statement.

Twenty states have legalized sports betting, including Colorado where voters approved a ballot measure on Tuesday. All but two don't require official data. In New Hampshire, sportsbooks have to disclose the source of their data.

League officials lobbying in other states have suggested bookmakers pay fees ranging from 0.25% to 1% of all wagers.

In Ohio, the teams aren't looking to set a rate in law. And they want state regulators to be able to step in if a bookmaker thinks the data is not offered on "commercially reasonable terms."

"A market that requires all bookmakers to use official data will be a more robust and profitable market without problems of fraud or consumer complaints," Bryan Seeley, MLB senior vice president and deputy legal counsel, said. "It's good for the market as well as the Ohio consumer."

Nevada has run sportsbooks for decades and never required official league data. But in-play betting only began there in the last few years. In private negotiations, the NBA and MLB have reportedly asked Nevada sportsbooks for 0.25% of all wagers placed.

The NBA sought the same cut from Indiana legislators. Dubbed an "integrity tax," the money would have gone in part to monitor suspicious betting activity.

A league data fee was not included in the law. Indiana accepted $32.5 million in bets last month, its first of legal sports betting.

A league fee or integrity tax increases the overall tax burden on the sportsbook operator, which "wins" about 3 to 5 percent of what's wagered. Gaming advocates say that could lead to fewer operators in the market and less competition, allowing the illegal market to thrive.

Eric Schipper, a lobbyist for Penn National Gaming, said league data mandates are a "money grab." Penn National operates the Hollywood casinos in Columbus and Toledo and racinos at Dayton Raceway and at Mahoning Valley Race Course - entities that want to offer sports betting.

Schipper said Penn National and other companies share information about suspicious activity with each other an law enforcement through a new association.

"The gaming industry is willing and able to do its part to address the issue," Schipper told lawmakers earlier this year.

Schipper also pointed to a study commissioned by the American Gaming Association, which opposes mandated league fees. The study found indirect sources such as TV marketing will drive more than $4 billion to the leagues.