Sporting Organizations and Royalty Fees
Royalty fees have been a long-debated topic that intensified after PASPA crumbled to dust in May, struck down by the U.S. Supreme Court (SCOTUS). While the country’s main sporting organizations saw themselves championing the benefits of these payouts, many protested. Now, the State of Missouri is leading the offense with a newly-proposed bill.
Dubbed House Bill 119, the plan has been put together by GOP Rep Cody Smith. According to Mr. Smith, a percentage of all wagers placed should be directed to sports governing bodies.
In addition, operators will be charged a $10,000 fee for interactive licenses and the same amount when they want to obtain a bricks-and-mortar certification. The bill will also seek to put a legal restriction on who can gamble and when, making the legal age 21.
Cobby Smith, Republic Representative in Missouri.
According to Bill 119, 0.75% of the total sports betting handle will be allocated directly to a special fund that will be used by the Missouri Gaming Commission (MGC), which will then be tasked with redistributing the money.
Another 0.25% from all wagers on NCAA football and Division 1 basketball events will be paid back to the collegiate body. The MGC will seek to endorse colleges that field teams in both competitions.
The bill will also have operators only base their wagers on official data provided by the main sporting body. A number of organizations, including the National Basketball Association (NBA) have signed data deals to do just that – provide accurate and genuine information about the odds of events.
Anyone who holds a license will also have to pay a $5,000 integrity fee back to the MCG. For each time a license is renewed, an additional $10,000 will have to be submitted as payment of costs associated with the process.
The MCG will create a safe fund, the Missouri State Wagering Fund, which will contribute to the General Revenue Fund in the event that the MCG hasn’t used the available money. The tax will amount to 14% (12% plus an administrative fee worth 2%, bringing the total to 14%) from the gross gaming revenue (GGR) companies generate.
Mr. Smith and the Missouri lawmakers will address the bill once they are back on January 9, 2019. It’s worth noting that royalty fees were suggested and dropped in Washington, D.C.
One of the issues we had on the table and have been seeking is a so-called integrity fee. […] We think the integrity fee is something that we are entitled to, one, because we have the additional costs and also — something that as I’ve said before… – NBA Commissioner Adam Silver
This is not the first piece of legislation that has sought to apply additional costs to sports betting. Royalty fees used to be an issue, with sporting bodies supporting them. NBA Commissioner Adam Silver was among the people to highlight the need for such payment, occasioned by the increased enforcement costs the organization would incur.
In the end, though, all organizations agreed to drop their demands, faced with criticism that the integrity fees would not serve their reported purpose.