Could Legal Sports Betting in the US Mean a Salary Spike for NBA Players?

Could Legal Sports Betting in the US Mean a Salary Spike for NBA Players?

The partnership announced Tuesday between MGM Resorts International and the National Basketball Association (NBA) over access to direct data feeds is already producing some interesting drama on the side.

The juiciest morsel of all: could the NBA's newly minted focus toward legalized sports betting, as evinced by the $25 million deal with worldwide gambling, entertainment and hotel leader MGM - the first deal of its kind featuring any of the four major pro sports leagues - lead to yet another salary cap spike for NBA players? If so, it could mean nothing less than a mad dash to sign players in free agency, which could lead to some substantive upheavals in rosters throughout the league, similar to what happened as a result of 2016 salary cap hike of $24 billion that, among other things, enabled the Golden State Warriors to sign superstar Kevin Durant and win another two NBA Championships.

Nevertheless, it is as yet unknown just how much of a boon increased access to legal sports wagering in states where the activity was previously banned from regulation by the Professional and Amateur Sports Protection Act of 1992 (PASPA) - which was recently overturned by virtue of a majority decision from the US Supreme Court - will have on the professional sports leagues. Still, sports betting activity in the United States, even being driven primarily by sports wagering taking place at legal offshore sportsbook websites such as Bovada, BetOnline, SportsBetting, BetDSI and 5Dimes, is estimated to have totaled out somewhere between $150 billion and $250 billion last year, so there is some solid anecdotal evidence pointing toward at least a generally positive effect on the leagues' ratings and fan engagement. If those predictions prove to be true, then the inevitable attempts on the part of the leagues' management to capitalize - or more accurately to monetize - on it (look for an increased push toward data exclusivity rights as talk of pernicious "integrity fees" more or less drops off due to lack of interest), then the resulting influx of cash could indeed result in a raise in the NBA's salary cap.

However, even before the announcement of the NBA's deal with MGM, talk of a raise to the cap was already starting to swirl in sports business circles. Business Insider's web publication cited to (as usual) unnamed "league sources" who indicated that online gambling - another element of the 21st betting scene that is starting to make major inroads into the mainstream consciousness - could indeed be the crucible in which the whole "spike or take a hike" dictum plays out before our eyes.

Whatever happens vis a vis a new salary cap for NBA players, next summer is probably going to be a very busy time indeed as nearly half of all players in the league are due to enter free agency status. If sports betting causes another massive influx of cash, then the huge amounts of free agents could create a tidal wave that carries with it the possibility for all sorts of shake ups in the makeup of the league itself - to say nothing of the eventual winner of upcoming championships. Chances are, if there is a major increase in available moneys in the bigwig circles of the league, if there is suddenly a big salary cap increase to go along with it, those two factors, combined with all the new free agents we already know are coming, then we should all get ready for the wind of change to start blowing through the sport - it could be unprecedented in scope and scale.

But what about that aforementioned done deal between the NBA and MGM - and how will it affect the situation of salary cap increases, or will it have any effect at all? Well, for starters, the deal, which grants NBA player and game data exclusivity rights to MGM casino sportsbook operators while the NBA advertises MGM as its exclusive gaming partner was only a matter of measly $25 million, and, while that would certainly change the life of this humble scribe and his four malnourished children, it's practically chump change to the NBA. To put it in terms more germane to the conversation at hand, $25 million (to be paid out over a period of three years) is what a single decent but still decidedly middle tier NBA player MIGHT be worth to a decent but not great team.

So all that is to say that, while the MGM and NBA deal does make history as the first such alliance between a major American professional sports league and one of the world's leading gambling companies (two unlikely bedfellows if our recollection of history serves us well enough), the partnership is not liable to make a dent in the grander scheme of the NBA. Neither is it likely to make a windfall of cash for more strategic free agency pickups a la Durant's retention by the Warriors.

What is likely to create the updraft folks seem to be looking for is the broader acceptance of legalized sports betting generally. Ever since PASPA was struck down from the federal legal rolls by the highest court in the land, there have been almost two dozen state governments that have jumped at the chance to legalize, regulate and - most importantly for the bottom line - tax the revenues associated with the sports betting industry. Over the next three to five years, we could honestly be looking at a situation in which nearly every state in the country except for possible Oregon, some place in the Deep South (but certainly not Mississippi, which began taking wagers on sports as of Wednesday, Aug. 1) and definitely ultra religious Utah that will not have a legal domestic sports betting industry to call their own. That is the kind of economy of scale that could make a difference in any and all sports leagues.

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