NBA Makes Deal With MGM for Betting, First for a U.S. League

(Bloomberg) -- The National Basketball Association now has an official sports book.

The league announced Tuesday that it has formed a partnership with MGM Resorts International, that will make the Las Vegas-based casino operator its first-ever sports gambling partner. In states where such betting has been legalized, MGM will be able to use official NBA and WNBA logos and trademarks, and have access to official NBA data streams to create products like in-game betting.

The three-year deal is worth $25 million, according to a person with knowledge of the deal. Representatives for the NBA and MGM declined to comment on terms.

“It was very important that we were able to establish through a commercial relationship that indeed we should be compensated for our intellectual property and our official data,” NBA Commissioner Adam Silver said at a press conference in midtown Manhattan.

First League

This is the furthest any major U.S. league has gone to embrace the new sports-betting reality. It's another big step for the NBA, which was the first U.S. league to publicly support legalized sports betting, while warning about the dangers of allowing each state to write its own rules.

The deal marks a partnership between two groups that have been largely at odds since the Supreme Court in May overturned the federal ban on sports gambling. Leagues like the NBA and Major League Baseball have spent months pushing for financial concessions and protections from state legislatures, including a cut of every dollar wagered on their games, the required use of official data, which the leagues sell, and the real-time sharing of anonymous betting data to help identify suspicious activity.

Operators such as MGM have been vocal in opposing some of those provisions, arguing that anything that hurts their margins would hinder their ability to compete with illegal bookmakers.

“This is a work in process” determined to preserve the integrity of the game, MGM Chief Operating Officer James Murren said. “We're trying to figure this out together.”

More Deals

While the “official gaming partner of the NBA” tag is exclusive, the underlying business arrangements are not, Silver said. That means that the NBA could, and likely will, sign similar deals with other operators. NBA teams are also free to sign their own deals with operators.

In lieu of a federal law that instills the NBA's ideal language around topics such as an “integrity fee” and data sharing, these deals offer a way for the league to achieve some of its revenue and integrity goals by winning them on an operator-by-operator basis, instead of a state-by-state basis.

“We thought we could accomplish commercially a lot of what we were trying to achieve with the state legislatures,” Silver said. He added that there's nothing in the MGM deal that shifts money to the NBA based on how much people bet on the league.

The announcement continues a busy week for MGM's sports-betting operations. The company on Sunday announced a $200 million joint venture with European gambling giant GVC Holdings Plc, the parent of brands including Ladbrokes, Coral, bwin and partypoker. Under the 50/50 venture, which will extend for 25 years, the two will work together to expand sports betting and online casino offerings across the U.S.

MGM also formed a separate partnership with Las Vegas-based casino operator Boyd Gaming Corp. that will allow each company to offer products in jurisdictions where the other has a physical location. That shared licensing deal, which Murren called “unprecedented,” gives both companies an immediate presence in 15 states.

“We're literally going to be in every state in the U.S. that will approve sports betting,” Murren said Tuesday.

The deal expands on the business relationship between the NBA and MGM. The casino operator is the title partner of the NBA's summer league, which takes place in Las Vegas, and owns the city's WNBA franchise, the Las Vegas Aces.

--With assistance from Scott Soshnick.

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Joshua Petri, Jamie Butters

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