Iowa Sports Betting Bill Facing Opposition from NBA and MLB

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As it turns out, the state of Iowa has been preparing a House bill that is aimed at legalizing sports betting in case the U.S. Supreme Court lifts the nationwide ban on sportsbetting, but the Major League Baseball (MLB) and the National Basketball League are not too happy about it. Both leagues have officially registered an opposing bill against the Iowa House bill.

However, it is more complicated than it seems – the leagues are not actually opposed to the state’s bid to legalize sports betting, per se. Apparently, the real problem is a provision of the bill that points to a proposed “integrity fee.” The integrity does not guarantee the leagues a piece of the profits that will be amassed from sports betting once it is legalized. According to the Iowa Gaming Association, while the leagues are not being forward about it, NBA and MLB are essentially demanding for major league sports fees.

Members of the Iowa casino industry have unanimously pointed out that the fees that the leagues are demanding is not only unrealistic but will also make sportsbooks unprofitable in the long run.

“It would kill sports betting in any state,” said Iowa Gaming Association president, Wes Ehrecke in an interview with a news outlet.

“It is unfortunate there wouldn’t be a good partnership with all the leagues because they will benefit from people watching games and betting on games,” Ehrecke told the news outlet. “But there certainly doesn’t need to be an integrity fee.”

Ehrecke further pointed out that in case the leagues are allowed to have the 1 percent fee that they are asking for, they would be walking away with about 20 percent or more of what is left after pot money is paid out. In addition to this, he also based his reasoning on the fact that 95 percent of the money wagered would be returned to the gamblers, and the remaining 5 percent is divided among the state, overhead expenses, federal taxes and a small share of the profits for the casinos and community groups.

Iowa’s sports gambling legislation is scheduled for consideration today (Wednesday, 7th )and if passed will establish a framework to legalize sports betting on college and professional sports which would then be regulated by the Iowa Racing and Gaming Commission.

DraftKings Hoping to Get Into Legal Sports Betting by 2019

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DraftKings has always argued that its business, a daily fantasy sports game where customers play to win cash prizes in exchange for cash entry fees, is a game a skill and not chance – the former being legal and the latter being illegal in the United States. However, for those who have been looking forward to it, the operator is now officially preparing to cross over to the other side with a new sports betting product that they hope to get off the ground by 2019. Hopefully, by that time the United States Supreme Court will have already delivered a ruling regarding the bill that intends to legalize sports betting in the country. From the looks of it, it is likely that the court will rule in favor of New Jersey and abolish the Professional and Amateur Sports Protection Act (PASPA).

“We’re certainly going to go after it,” DraftKings CEO Jason Robins said in an interview. “I think the Supreme Court — I’m hopeful — will rule that way. You can’t really predict what the government will do, but you have to be prepared.”

“For me, it was always, ‘this is going to happen, it’s just [a matter of] when. We’ll be prepared,” he added.

By branching out from the full-slate, roster-drafting contests that made it the top spot for daily fantasy sports competition the company hopes to achieve the same level of success in the legal sports betting industry. In fact, it has already created a single-game contest which will allow DraftKings’ customers to participate in 2018’s NFL title game. By 2019, DraftKings hopes to have a curved up a solid reputation and attracted enough customer recognition that will be very helpful in securing a portion of the Super Bowl action.

The company will also keep running their daily fantasy sports platform which Robins says will continue to grow, and may even grow faster thus dispelling the need to constantly keep tabs on it. The company thinks that the new venture is just as important as the business they have been running all this while. While DraftKings has always distanced itself from sports betting in the past, it is quite clear that the opportunities that legal sports betting presents are just too enticing to be ignored especially considering the huge revenue potential of the market. After all, it’s business.

NBA Expects a Cut Should Sports Betting Be Legalized

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The United States Supreme Court is still chewing over the legality of Professional and Amateur Sports Protection Act (PASPA), the 1992 federal law that imposed a ban on sports gambling in the country. However, in anticipation that the ban will be lifted and that sports betting will finally be legalized, a number of states are already laying the groundwork for statutory frameworks in the form of various legislations. New York is among these states and it is where hearings hosted by the Senate’s Racing, Gaming, and Wagering Committee were held earlier this week, on Wednesday.

It was at this hearing when a top NBA official revealed the league’s thoughts on what they considered to be an ideal sports betting environment. The NBA wants in on the profits amassed from wagers on professional basketball games in the United States. According to NBA senior vice president, Dan Spillane, the league will be taking on “risk that sports betting imposes” and should, therefore, receive the 1 percent compensation of the total amount wagered on the league’s games.

“Without our games and fans, there could be no sports betting. And if sports betting becomes legal in New York and other states, sports leagues will need to invest more in compliance and enforcement, including bet monitoring, investigations, and education,” Spillane told the committee. “To compensate leagues for the risk and expense created by betting and the commercial value our product creates for betting operators, we believe it is reasonable for operators to pay each league 1% of the total amount bet on its games.”

Who Is Buying It?

Well, at least the league is being halfway honest about it. The NBA is very smart and while it may seem like it, the league is definitely not a victim of circumstance in this case. Case in point, it has been the only league that has been very open about embracing the possibility of a legalized-sports-betting future. Seemingly, the true intent was backed by their vision to use sports gambling as a quasi-revenue stream – which makes their logic pertaining to the whole issue quite assailable. Spillane further argued that a similar model was already in place in countries like Australia and France where there is legalized sports betting and the leagues in said countries are compensated.

The fee represents a colossal financial windfall for the NBA, as well as other leagues which are likely to make similar requests if NBA’s is approved. A renowned gaming research firm estimates that in case states where sports betting is legal or will be legalized agree to compensate the leagues, the total annual revenue will be about $2 billion. At the moment, NBA’s proposal is still nothing more than a statement to kick off a negotiation – on Wednesday, it was greeted with a lot of skepticism thus making its future rather uncertain.

Kentucky Among States Seeking Sports Betting Legalization

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There is a lot of optimism as far as sports betting is concerned and a number of states are preparing for the landmark ruling that will hopefully repeal the Professional and Amateur Sports Protection Act (PASPA). Kentucky is the eighth state where sports betting could become a reality if PASPA is repealed and bill SB 22 that was submitted on Wednesday by Senator Julian Carroll gains enough political support. The bill seeks to amend a Kentucky statute that exempts some sports from the current sports betting ban in the state. This bill further seeks to award the Kentucky Horse Racing Commission oversight authority to implement new sports betting regulations. It will also channel all tax revenues generated from the activity to the state coffers.

This is Caroll’s second attempt at pushing a bill that will potentially put Kentucky on the map in regards to sports betting. His first attempt was in September last year when he filed bill BR 155 that sought for the conceptualization and implementation of a sensible framework for legalized sports betting at the Kentucky racetracks and the off-track betting facilities. Unfortunately, the bill flopped before the end of 2017 but the senator maintained that sports betting is a viable solution to Kentucky’s budget problem.

“When the (state financial advisors) PFM Group made their recommendations to cut pensions it was my mission to find a new source of revenue for the ailing systems,” Carroll said in an interview with the Legislative Research Commission in September. “The state has a moral and legal obligation to fund state pensions. Reducing the benefits of thousands of hard-working public servants is not an option.”

Caroll has been rather open about his motivation for the legislative push – he has reaffirmed that the tax revenue from sports betting would be used to support pension schemes as well as facilitating the provision of other civil services. Under the new bill’s terms, gaming operators would need to pay an initial licensing fee of $250,000 and an additional 20 percent tax on gross gaming revenues – from all the funds that will be collected in this way, 60 percent will be allocated to the Kentucky Employees Retirement Systems Non-Hazardous and Kentucky Teachers’ retirement funds.

Blockchain Could Redefine the Sports Betting Experience

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Since 2017, a plethora of sports betting sites and apps have been shifting towards offering bettors the opportunity to place bets discretely from anywhere using their smartphones. The convenience that this provides has been a great marketing move that has paid off handsomely by attracting a staggering number of new users to online sports betting. However, there have been challenges when it comes to payment systems especially when it comes to traditional payment services and digital wallets who have always been circumspect about supporting online gambling. While this would have represented a dead end of sorts in the past, the utilization of specialized payment gateways in facilitating bankroll funding and payouts in online casinos took over.

Even though these services can be thought of as saviors to the online gambling scene, their involvement has in many ways amplified the risks of failure and fraud. The aforementioned payment gateways and services are always under threat from hackers and other cyber-criminals. Even handicapper sites and services that usually offer paid analyses to less savvy bettors do not always produce the wins that they promise to gamblers.

To address these issues, stakeholders in the online gambling industry are looking into blockchain technology. Several efforts are already being made in order to create better online betting experiences. Just to mention a few, HEROcoin is an effort that aims to decentralize sports betting, BlitzPredict through its aggregation service intends to provide gamblers with trustworthy insights and Electroneum’s token is designed to be used a digital currency in online gambling sites.

Facilitation of Easier Funding and Payouts

Unlike traditional means, payments made using blockchain are much faster as the tokens do not need to be routed through several financial institutions or clearing houses. In essence, this gives the users ultimate power over how and when they use their money. Furthermore, Electroneum which is a relatively new cryptocurrency has set a pace for allowing easy estimation of digital currencies and fiat currency by limiting its token to two decimal places.


Blockchain powered platforms such as HEROcoin are offering great ways of achieving transparency and fairness by making betting a peer-to-peer and decentralized activity. Not only do users get to trace the flow of money and the terms but they also are allowed to define the conditions of wagers through smart contracts.

Trustworthy Insights

Services like BlitzPredict promote quality insights by allowing analytic enthusiasts to share their prediction models with other users. High performing models in BlitzPredict’s framework are rewarded with the platform’s own token which can then be used to place bets using the platform. This kind of rewards mechanism encourages gamblers to make data-driven decisions rather than relying on bad advice or hunches.

Indiana to Join States Seeking Sports Betting Legalization

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Indiana is set to be among the over dozen other states that have been preparing for significant changes in federal law pertaining to sports betting. At the moment, the United States Supreme Court is weighing arguments on whether or not to abolish 1992’s Professional and Amateur Sports Protection Act that will imply nationwide legalization of sports betting. A number of the states that are already preparing for this are quite optimistic that the Supreme Court will make a decision that upholds their wishes before the third quarter of 2018.

Indiana’s entry into the list was marked by a legislation that is going to be filed this session by a Republican lawmaker. This is, however, not Indiana’s first shot at fighting for sports betting – the state’s first attempt in 2015 did not bear any fruit but with New Jersey’s petition for the abolishment of PASPA being picked up by the Supreme Court everything has changed in their favor. Should PASPA be revoked, a number of states will have already legalized sports betting or will be in the process of finalizing the legislation – these include California, Pennsylvania, Mississippi, New York and Michigan.

Congress Might Act on Sports Betting

According to NBA Commissioner Adam Silver, the US Congress has shown a lot of interest in the topic of sports betting as well as NBA’s demands for a federal framework for it. Three years ago, Silver endorsed the lifting of the ban that imposed certain regulation and technological safeguards. His reasoning was that this would keep bettors from resorting to illicit bookmaking and shady offshore betting sites.

This seems like a longshot since it essentially implies diverting attention to what would represent a large expansion of gaming at the federal level which has not been possible for very many years. Regardless, there have been several efforts made towards it including calls for hearings on an active legislation by Rep. Frank Pallone that seeks to repeal the federal ban and leave sports betting to the states.