MGM's deal with NBA likely to be about live data

Aug 7, 2018 3:10 AM

The quiet revolution in the realm of sports wagering is all about the data. How will sportsbooks get it? How much, if anything, are they prepared to pay for it? Is the MGM Resorts International deal with the NBA about marketing or about giving the casino giant a leg up on its competitors?

Did MGM throw the rest of the developing national sport wagering companies under the bus (as suggested by one industry veteran)?

As often can be the case as a new business emerges, there are certainly, as they say “more questions than answers.” Throw in “time will tell” and it’s “a wait and see proposition,” while we’re at it.

Most involved in the sports betting world now is of the opinion “in-game,” also called “in-play” betting is the money-making future of sports wagering. As so ably described by Arne K. Lang in his book, “Sports Betting and Bookmaking – An American History,” the early days of the enterprise were first controlled by local bookies who were then joined by legal operators in Nevada and later, thanks to the technological revolution, by astoundingly successful offshore operations.

No data feed was required then to determine who won a match, which team scored the most points or who scored the most runs. Disputes over these results were rare. Once a score or result was posted, the winners got paid and the losers waited until the next contest to get even.

Now, with the ability to book these “in-play” wagers, bookies need the ability to access all manner of information with immediacy and accuracy. The quandary faced is clear: Bookies can’t take “in-play” bets, in addition to the myriad of proposition wagers like we see for the Super Bowl, unless they have the information required to determine a winning bet result as quickly as possible.

No bettor wants to wait to get paid while the bookie tries to find out an “official result.”

A wonderful example of why sportsbooks need a reliable data feed will come with Las Vegas’ Thanksgiving Day Weekend heads-up golf match between Tiger Woods and Phil Mickelson. It’s likely to be one of the most heavily bet events of its kind because it’s so perfectly suited to “in-play” betting. The action is likely to be hot and heavy worldwide.

But to keep the bets churning, bet takers will need data such as the longest drive, the number of putts and closest to the hole. The things you could bet on in an 18-hole match seem unending. The problem remains, however, in having an official and accepted data source to decide if a bet is winner or loser. Who will provide it and what would it cost?

We may not hear much more from the various sports leagues and other sports bodies, such as the Professional Golfers Association (PGA), regarding the so-called “integrity fee.” However, expect a long, drawn out money battle over the kind of data that will fuel the “in-play” wagering boom. Will the leagues or a third party control such data feeds? Will the costs be progressively and yearly increased to bookies, such as they continue to face with the television feed of all the NFL games? As one casino industry insider told me without equivocation, “If you pay the sports leagues for anything (such as a data feed or “integrity fee”) the cost of it will go up and up nonstop.”

This brings us to MGM’s NBA deal.

MGM and the NBA announced last week a multi-year agreement providing the worldwide casino/resort operator with access to official NBA and WNBA data, in addition to other league promotional materials.

It’s an approximately $25 million, three-year deal that allows MGM’s use of the NBA and WNBA data and branding, but is not exclusive, allowing the leagues to make similar deals with other casinos offering sports betting.

When the NBA season rolls around in late October, MGM will, if it can get its technology in shape, be able to move to the forefront in the realm of “in-play” betting. What is uncertain is the NBA’s position regarding other, third-party data sources and if they will continue to have access to NBA arenas to send out their own data feed. Will other bookmakers be forced to do a deal with the basketball league if they want an extensive “in-play” menu in their shop or on their mobile app? Will the MGM/NBA deal leave tire tracks on the rest of the industry or will an accord be reached regarding data?

The questions go on and on.

As to the answers, we’ll just have to wait.