How will SCOTUS ruling on sports gambling affect MMA?

May 14, 2018

The United States Supreme Court struck down the federal law banning sports gambling.  As a result, states can now legalize sports betting.  The ruling will certainly affect the sport of MMA.

As of Monday, New Jersey plans to be the first state to offer legal sports betting based upon the new ruling.  Delaware, Mississippi, New York, Pennsylvania and West Virginia are also expected to make it legal in quick order.

Prior to the ruling, Nevada had been the only state allowed to offer sports betting.  Oregon, Delaware and Montana maintained sport lotteries.

The major sports leagues: the NFL, NBA NHL and Major League Baseball as well as the NCAA supported the federal law but were ruled against by the highest court.

The most salient point of today’s Court ruling: “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”  This statement affirms the belief that states are free to regulate if federal law does not conflict.  The Court believed the federal law in place regulated sports gambling.

Sports leagues such as the NBA and MLB are looking for “integrity fees” which would be a way to profit from the new opportunity.

For those wondering, the UFC has spoken favorably about legalization.  It may seem evident that the previous UFC owners, the Fertitta brothers, would be partial to sports gambling since their money came from the casino industry.  But, under questioning from New Jersey’s lawmaker Frank Pallone (operating on his own agenda) last December, the UFC’s Vice President of Regulatory Affairs Marc Ratner supported sports gaming.  Although he did not speak for the UFC, he indicated that the company had the infrastructure to deal with any issues with respect to match-fixing based on gambling.

Pallone first asked whether UFC was bet on in other parts of the world. Ratner stated, “I know offshore there’s betting everywhere. In Nevada, all our fights are put on the board, you can bet on the first fight through the last..Personally, not for the UFC, I am in favor of sports betting around the world, around the country especially.” He also asked about how the UFC preserves the integrity of the sport with the knowledge that gambling is ongoing.  He also asked whether gambling has helped with fan engagement to which Ratner stated it did.

We will see how states will deal with sports gambling and the impact it will have in MMA.

Payout Perspective:

Notably, PFL undertook a uniform policy but one of the bans on sponsors was that of gambling sites.  The sponsors have already been turned into the promotion so for some fighters they cannot take advantage of a potential market.  However, other leagues where fighters solicit sponsors might see an uptick.

It is still too early to see how state-sponsored gambling may impact MMA.  Daily Fantasy Sports for MMA came and went as the industry did not seem to stick with the sport of MMA.  But, the potential ease and accessibility of gambling will likely build for years to come.  With many regional MMA cards happening at tribal casinos, you can envision the venues building sportsbooks so you can make bets prior to going in and watching the fights.  This represents the good and bad of the potential future for MMA and sports gambling as the concern over the social issues (i.e., addiction) and integrity will be something to monitor.

There will be an influx of sponsors coming into the market for both fighters and leagues.  Pun intended, but you can bet on gambling being a part of the MMA landscape in the future with the potential revenue that may come from this ruling.

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