Executive VP of gaming Kenny Gersh Supports 0.25% Integrity Fee
Executive vice president of gaming Kenny Gersh recently said that he doesn’t consider the 0.25 percent integrity fee wrong. Talking at the Global Gaming Expo, held at the Sands Expo & Convention Center and The Venetian in Las Vegas, he explained why an integrity fee is not a bad idea.
According to him, the state will designate only a handful of designated entities that will be provided with “specific” licenses. In fairness, if somebody is making money because of the games, they shouldn’t mind paying the integrity fee. He said that there will be no bettering on the Yankees vs. Red Sox game if the two teams weren’t playing each other. As the league is the one that creates the matches and organizes the events, they should take a share from the overall earnings.
He did not talk specifically about maintaining “integrity” but justified that such a fee would be completely fair. His comments suggest that the integrity angle wouldn’t last long. A 0.25 percent fee doesn’t appear like a hefty amount. However, when it is applied to the fee based on the total amount of the wagers, instead of the net profits, it becomes an uncomfortable liability.
The leagues were originally looking for one percent integrity fee. This fee would have made sports betting almost unprofitable. The salaries of employees, property and income taxes and insurance and other expenses alone would have tumbled the balance sheets of the sports betting operators. The leagues could simply be trying to gobble up as much as they can from sports betting. They are ignoring the transparency and collaboration that comes along with legalization and regularization of the betting markets.
In short- leagues are greedy. An integrity fee doesn’t guarantee fairness in the games. Sports betting operators are not inherently malicious organizations that need to pay up a fees upfront to ensure they remain fair. They simply work as enablers for people who want to bet on their favorite teams. An integrity fee is a reminiscence of the pre-PASPA strike down era when sports betting was looked down upon. Leagues must realize that organized sports betting drives millions of more people to the games and helps them earn better profits through more lucrative broadcast and sponsorship deals.
SVP of public affairs of the American Gaming Association, Sara Slane said that sports betting operators are already investing billions of dollars in licenses, salaries and more. They can’t take the risk of betting, pay the leagues and then provide backend benefits as well.