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Professional leagues make pitch for official data in sports wagering

March 20, 2019

Professional sports leagues are pushing state lawmakers to require that official data be used to determine the outcome of all sports betting if it is legalized in Indiana.

Legislation already passed by the Senate would legalize sports wagering, but the bill only requires that official league data be used to determine winners for so-called in-game bets, which are those made when a game is already in progress—not just on a contest's outcome but on individual plays or in-play statistics.

But representatives connected to the NFL, NBA, MLB, IndyCar racing and PGA Tour argued in favor of requiring official league data be used for all gambling—even though no other state requires it. Casino officials, however, said they oppose a mandate because it will give the leagues a monopoly over the data they need to conduct sports wagering.

The debate was part of roughly five hours of testimony the House Public Policy Committee heard Wednesday on Senate Bill 552, which would impact nearly every part of the gambling industry in Indiana.

The legislation, authored by Republican Sens. Mark Messmer of Jasper and Jon Ford of Terre Haute, would also let horse-track casinos add table games this year as opposed to waiting until 2021 and allow two Gary casinos to move—one to a nearby interstate site and the other to Terre Haute. It would also remove limits on the number of casinos a company can own in the state.

But legalizing sports gambling would be the biggest change. A U.S. Supreme Court decision from May paved the way for states to allow betting on football, basketball, baseball and other sports—if lawmakers in those states approve.

SB 552 would legalize wagering on professional and college sports, but prohibits it on e-sports, high school sports or amateur sports. It would allow gamblers to place bets on smartphones after signing up in person at a casino or off-track betting facility, such as Winner’s Circle in downtown Indianapolis. The bill does not impose an integrity or royalty fee that would be paid to professional sports leagues, which had been previously proposed.

Supporters of of bill say legalizing sports wagering adds oversight to an activity that's already happening illegally and could generate millions of dollars in tax revenue for the state. According to the American Gaming Association, $107 billion is wagered illegally on sports every year.

Dan Emerson, chief legal officer for the Indianapolis Colts, said officials from various sports leagues are concerned without using official data, two different observers could come to two different conclusions about in-game actions, such as how many yards the ball moved. 

“You run the risk of having conflicted results,” Emerson said. 

When Rep. Sean Eberhart, R- Shelbyville, pointed out that no other state that has legalized sports gambling has required official league data to be used for any bets, Emerson said the leagues are looking for Indiana to be the model. 

“I’m not sure we want to be the model for that,” Eberhart responded.

But opponents of requiring the use of official data say the leagues would then have a monopoly, enabling them to charge any amount wanted to companies that take sports bets and need that data.

David Miller, vice president and assistant general counsel for PGA Tour, spoke on behalf of the PGA, MLB and NBA and said they’d support a provision that required leagues to charge reasonable prices. 

“We have no intent to use some monopoly power,” Miller said. 

But Matt Bell, president of the Casino Association of Indiana, said his organization would like the official league data provision removed from the legislation. He said casino officials prefer to negotiate those data agreements privately, without a mandate.

Andrew Winchell, director of government affairs with the online betting site FanDuel, said the company isn't taking a position on whether official league data should be mandated or not. FanDuel already has an agreement with the NBA.

Mark Miles, CEO of Indianapolis Motor Speedway parent company Hulman & Co., said official data “is essential” to sports betting.

“I don’t know how it’s possible to offer in race betting without it,” Miles said.

Slippery slope?

As for the casino shuffling, the bill would allow Majestic Star I and Majestic Star II to relocate out of Buffington Harbor on Lake Michigan—something Gary officials have been advocating as they try to clear the area for other development projects.
 
Spectacle Entertainment—a company founded by some of the same investors that operated Centaur Gaming before it was purchased by Caesars Entertainment—recently bought the casinos and wants to move one to the Interstate 80/94 corridor in Gary and the other to Terre Haute, which the bill would allow.
 
But the legislation also creates a competitive process to determine which casino operation could open a facility in Terre Haute, which means Spectacle wouldn’t be guaranteed permission to move forward on that location. Other casinos would be allowed to move unused gambling “positions" from their existing casinos. The state caps the number of gambling positions at each location but some casinos fall under the number.
 
The bill also would remove the two-license limit on the number of casinos an individual company could control to make that competitive process possible for some operators that already have two casinos. (Horse-track casinos already are exempted from that requirement.)
 
At least one other casino operator—Rising Star’s owner, Las Vegas-based Full House Resorts Inc.—has expressed interest in opening a casino in Terre Haute.

Former longtime Democratic state Rep. Charlie Brown testified for the bill on behalf of Gary, arguing that the bill would help the city succeed. 

“If Gary does not succeed, the state does not succeed,” Brown said. 

But Rep. Matt Lehman, R-Berne, questioned whether allowing Majestic Star I and Majestic Star II to relocate could create a slippery slope of other casinos throughout the state seeking to move too. 

Brown said other casinos certainly could come forward and request to relocate, but if they do, the state could consider it just as it is considering this proposal. And if the proposal is in the best economic interest of the communities and casinos involved, then the state shouldn’t be opposed to considering the request. 

Other cities in northwest Indiana remain strongly opposed to the Gary casino moves out of concern the changes would negatively impact business at Ameristar Casino in East Chicago and Horseshoe Hammond Casino. 

East Chicago Mayor Anthony Copeland said casinos should have to abide by the original rules set by the Indiana Legislature.

“This is surely about the expansion of gaming,” Copeland said.

The bill does include provisions that would provide financial support to East Chicago, Hammond, Evansville and Michigan City—the cities most at risk of losing revenue if the casinos move—but Phil Taillon, chief of staff for Hammond Mayor Mark McDermott, said that is solving a problem the bill creates.

“Let’s just not create the problems in the first place,” Taillon said.

Representatives for Ameristar and its owner Penn National Gaming argued that the bill would disrupt market stability. 

Eberhart pushed back on that claim though, asking whether the casino operator adjusted to other issues that impacted the market, like when Ohio legalized casinos in 2009. 

“I heard the words market stability several times,” Eberhart said. “I’m wondering why market stability applies at one point in time but not another point in time.”

The bill passed the Indiana Senate last month. The House Public Policy Committee did not vote on the bill on Wednesday. 

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