For those who aren't aware, last week was the culmination of a long process whereby the NBA presented to the New York State Senate committee that they were in favor of legalized gambling provided they received 1% of each bet placed. The issue is headed to the US Supreme Court in the Spring, and should New Jersey be successful in their campaign to legalize gambling it is likely that many other states will follow suit. The NBA is also advocating bringing in-play betting options and smartphone apps into play, to bring US sports betting in-line with other big gambling markets like the UK.Attempting to estimate the amount of money the proposed 1% tariff could generate is difficult, but by way of comparison we can look at the English Premier League. In 2015 it was estimated that the average amount wagered legally worldwide on each Premier League game was about $200 million (source), so for a 380 game season that totals $76 billion. Now obviously that includes worldwide takings and not just the domestic UK market, but the USA is also 5 times the size of the UK in terms of population so will be off to a running start. This figure also doesn't include cup competitions or the Champions League, which are enormously popular and have more in common with the NBA Playoffs than the regular season.Now the real impact this could have on teams will be determined by whether or not it is decided that this new revenue will be classed as Basketball Related Income under the CBA. If it is, then 50% of all gambling income will have to be made available as player compensation under the salary cap.So say in 5 years time the NBA sees $70 billion wagered on its games over the year, not at all unreasonable considering a) the number (1230) of games in the regular season and b) the intrigue of playoffs. The NBA would in this scenario generate $700 million in additional revenue, and this is ignoring the inevitable partnerships that would have been arranged between these gambling firms and the league. Split that between the teams and that's $23.3 million per team, of which half would have to go towards the players (source).Only once in modern NBA history has the cap risen by more than $8 million in a season, and that was the crazy summer of 2016. If the NBA gets its way on gambling, the result could likely be another huge salary cap spike, and growth in the legal gambling market could lead to further spikes under the current CBA.
For those who aren't aware, last week was the culmination of a long process whereby the NBA presented to the New York State Senate committee that they were in favor of legalized gambling provided they received 1% of each bet placed. The issue is headed to the US Supreme Court in the Spring, and should New Jersey be successful in their campaign to legalize gambling it is likely that many other states will follow suit. The NBA is also advocating bringing in-play betting options and smartphone apps into play, to bring US sports betting in-line with other big gambling markets like the UK.
Attempting to estimate the amount of money the proposed 1% tariff could generate is difficult, but by way of comparison we can look at the English Premier League. In 2015 it was estimated that the average amount wagered legally worldwide on each Premier League game was about $200 million (source), so for a 380 game season that totals $76 billion. Now obviously that includes worldwide takings and not just the domestic UK market, but the USA is also 5 times the size of the UK in terms of population so will be off to a running start. This figure also doesn't include cup competitions or the Champions League, which are enormously popular and have more in common with the NBA Playoffs than the regular season.
Now the real impact this could have on teams will be determined by whether or not it is decided that this new revenue will be classed as Basketball Related Income under the CBA. If it is, then 50% of all gambling income will have to be made available as player compensation under the salary cap.
So say in 5 years time the NBA sees $70 billion wagered on its games over the year, not at all unreasonable considering a) the number (1230) of games in the regular season and b) the intrigue of playoffs. The NBA would in this scenario generate $700 million in additional revenue, and this is ignoring the inevitable partnerships that would have been arranged between these gambling firms and the league. Split that between the teams and that's $23.3 million per team, of which half would have to go towards the players (source).
Only once in modern NBA history has the cap risen by more than $8 million in a season, and that was the crazy summer of 2016. If the NBA gets its way on gambling, the result could likely be another huge salary cap spike, and growth in the legal gambling market could lead to further spikes under the current CBA.
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