NBA partners with MGM in sports betting deal

The deal is for three years and $25 million and it also calls for MGM and NBA to cross-promote each other’s brands on their various platforms.

"Clearly, this created a new sponsorship opportunity for the NBA," said Jeffrey Boyle, senior manager of audit firm EisnerAmper’s sports and entertainment practice.

The deal is also non-exclusive for the NBA, meaning it can still sell its data and brands to other casinos and sports betting operators, though only MGM will be its “official gaming partner.”

It is considered a big development in the emerging U.S. legal sports betting market, as casinos, racetracks, technology and data companies, fantasy sports providers, sports book operators and others team up in the wake of a May court decision that allowed states to regulate the wagers.

It is the first official foray of any professional sports league into the new business of American sports betting, as the leagues seek ways to monetize their ownership rights to game broadcasts, team names, logos and, they would argue, game data.

As they lobby lawmakers in states looking to legalize sports betting, the leagues have sought so-called “integrity fees” - usually a small percentage of total wagers - but have so far not been successful.

"My overarching objective is the integrity of the game," said MGM Chief Executive Jim Murren at a news conference in New York with NBA Commissioner Adam Silver. "To be able to have the official NBA data for sports bettors around the world is very valuable, and ... I’ve paid for that."

Murren also said he expects to be able to take online sports bets by the end of this week in New Jersey, where MGM owns the Borgata Hotel Casino & Spa in Atlantic City.

That would be yet another major milestone that will let anyone within state lines place bets on sports from their phones or computers.

MGM on Monday also announced a joint venture with UK-based GVC Holdings PLC, which owns sports book operator Ladbrokes, as well as a partnership with Boyd Gaming Corp.

Transcription of NBA Commissioner Adam Silver's 'sports betting announcement'

Today, we're here for what we believe is a historic announcement -- and that is that MGM Resorts will be the NBA's first official gaming partner.

This is an industry, an area that we've been discussing a lot over the last several years. Of course, with the Supreme Court's repeal of PASPA (Professional and Amateur Sports Protection Act of 1992) a few months ago, this has all really come to a head. I think it's no secret that the people who've been following this league know our first choice was to have a federal bill that would replace PASPA and create a consistent national framework for sports betting, but that's not the landscape we're currently dealing with; we're working with state-by-state. And as I've also said, while we've had discussions throughout the country with state legislatures, we also indicated that we were open into entering into commercial relationships directly with casino operators.

MGM has a very unique position with the NBA and the WNBA. Of course, the MGM -- through Jim Murren as their CEO -- is the owner of the Las Vegas Aces, our WNBA team in Las Vegas. And in addition, MGM is our partner in the Las Vegas Summer League. Jim and I had an opportunity to spend a fair amount of time together in July when I was in Las Vegas for the summer league, and we said let's take advantage of this opportunity to do something historic -- and that is to enter into the first commercial partnership between a gaming establishment and the NBA. And what this relationship entails is access to official data, for the many casinos that MGM operates -- the use of the NBA's intellectual property -- and as we discussed before, we're very focused on integrity provisions to protect our fans, to protect those who choose to engage and bet on the NBA.

We'll get into some of those details later, but as I said, to us there was no better partner out there in the gaming business to begin with than MGM -- both because of the breadth of their holdings. They have roughly 12 resorts just in Las Vegas alone, and operate in several other states. I'll add that Nevada has, by far and away, the most sports betting experience in the country. Sports betting has been legal in the state of Nevada for almost 70 years. So there's an enormous amount of regulatory experience there on how to deal with sports leagues and how to deal with bettors.

And for us, I know the way Jim and I both approach this would be that it would be a learning experience. We didn't overnegotiate the deal. I think there was a lot of good faith involved, which can only come about when you have a pre-existing relationship with your partner -- and I think that -- and compliments to the folks at MGM and to the many people at the NBA who worked on this deal. We all realized that there were certain areas where we just didn't have enough information, frankly, to keep negotiating to the nth degree -- that we were better off saying, let's work on -- in terms of reasonableness and good faith, and let's see how this business begins to unfold.

I have to say, lastly, what was very important for the NBA was that we were able to establish, through a commercial relationship, that indeed we should be compensated for our intellectual property and for our official data. And I think that ultimately, it was on us to convince MGM that there was a commercial benefit to compensating us for that data -- that this wasn't just about doing the right thing in terms of intellectual property, but that through this relationship with the NBA and the WNBA, that Jim could indeed differentiate his business from his competitors. And number one, with this official gaming status designation that MGM and its properties will have, but also, by creating a better user experience for gamers. So that they know when, whether they're at a bricks-and-mortar casino or they're using his app online -- that it's gonna be an experience that both MGM and the NBA have worked on together, where the consumer is first and foremost.

Lastly, I'll just say we're thrilled, Jim, to be entering into this partnership with you. I could not think of a better person and a better company to begin this relationship with. And now, I hand this over to my friend, Jim Murren.