Tuesday, September 30, 2008

Australian Professional Sports Linking to Online Gambling Firms

As opposed to the stance of professional sports in the US (see related post), in Australia, teams are actively working partnerships with gambling firms -- and earning extra cash. They do have limits on the scope of wagers offered, such as limits on whether the teams can profit or loss from a single match, and limits on wagers on political or other non-sporting propositions.

The cash isn't large, but $2 to $3 million (Australian dollars) per year isn't insignificant. Professional sports leagues' salary structures in other countries are generally not as large as their U.S. counterparts. For 2008, the Australian National Rugby League has a salary cap of $4.1 million (Australian dollars), which is approximately $3.25 million U.S. dollars. So, adding $2 to $3 million in easy revenue when you're only paying out $4 million in salaries (hopefully getting revenues in excess of costs), just adds to the profit picture. The Canberra Times article has information on the gambling deal just struck with the Gold Coast Titans of the NRL. For the Australian Football League, their 2008 salary cap is $8.5 million (AUD) / $6.75 million (USD). So, $2 to $3 million would be a material boost to that league as well. The Australian Football League has the highest salary cap of the professional sports leagues in that country.

Two excerpts from the article are very informative and show the different (and rational in my opinion) perspective of sports leagues in other countries and the leagues here in the U.S.

The Gold Coast Titans CEO was quoted that he anticipated criticism of the club's move into gambling but argued that bookmaking organizations were making money from betting on sport, including the NRL, so they might as well profit.

The best quote is, "while we accept that sports betting is a reality and that clubs are looking to build revenue streams, we will retain the right to examine each proposal on a case-by-case basis," NRL chief executive David Gallop said.

Huge. The chief executive (i.e. commissioner) of a professional sports league accepts sports betting as a reality and accepts the desire by clubs to tie into that to build revenue, but reserves the right to intelligently review and regulate such activity. Seems to make sense to me.

The gambling entity has agreed as part of the deal to implement safeguards to protect the integrity of the game and players and in addition the team signed a betting integrity agreement.

When will the U.S. sports leagues figure this out?

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