There are already eight states in the U.S. that have legalized sports gambling since this past May, with several more preparing to consider legislation after the new year kicks off. Adding to the growing list of jurisdictions that are amenable to the idea of allowing their residents to place bets on sporting events are Missouri and Ohio, both of which have said that they see no problem giving the sports leagues their request “integrity fee.”
Missouri already has a bill in the works, Senate Bill 44 (S.B. 44). It would allow sports wagers at floating casinos, as well as through online platforms, and would place a tax of 12% on the adjusted gross receipts of sportsbooks. In addition, there would be 2% “administrative fee” assessed on adjusted gross receipts, as well as an integrity fee of one-half a percent.
In addition, operators would also have to pay a $10,000 fee for each brick-and-mortar license, as well as each interactive license. An additional fee of $5,000 would have to be paid as a separate integrity fee to the Missouri Gaming Commission and the $10,000 fee would be assessed every time a license is renewed.
Ohio is looking for a deal that could see several states come together for sports gambling. Bill Coley, an Ohio State Senator, is arguing for a multi-state agreement that would give sports leagues one-quarter of one percent as an integrity fee.
During a legislative committee meeting in Kansas last week, Coley asserted, “If we get it right, the big winners are the leagues. Mark Cuban said it right, the value of your franchise just doubles.”
Integrity fees have been a controversial topic since first being raised, even before sports gambling became legal, and the U.S. Sports leagues have argued that they deserve to receive a piece of each bet in order to ensure they have the resources to keep games from being fixed. This argument doesn’t stand up to scrutiny, however, because the leagues are already responsible for maintaining integrity in sports competitions.
Sportsbooks are obviously opposed to the idea because it reduces their take. Some have asserted that margins are so slim now that including an integrity fee would put them in the red.
Integrity fees aren’t necessary – the sports leagues have the resources in place to manage their industries. To date, the idea of offering a fee hasn’t been a popular one with any of the states that have legalized gambling and not one has included the fee in its legislation. That alone shows what the general opinion is on integrity fees.
