Former MLB Commissioner Fay Vincent believes that the gates to sports gambling will soon be broken open. His supporting evidence? The recent sale of the Miami Marlins for a staggering $1.2 billion. The franchise was previously bought for $158 Million in 2002.
“I know that [gambling] is precisely why these prices are going up,” Vincent said in a recent ESPN interview. “I have been really astonished and can’t believe, with the amount of money that’s going to flow to sports if gambling is permitted, that it’s not a subject of interest. And no one seems to be paying attention.”
With recent pro-gambling comments by NBA commissioner Adam Silver, among others, it seems like a reasonable explanation for why businessman Bruce Sherman and former New York Yankee Derek Jeter are putting such a loud investment for an underwhelming MLB franchise.
Vincent and many others believe that legal gambling will be great for the American sports industry, and it’s not hard to see why.
As much as people love to predict the winners of sports games that they have no part in, it can only increase interest if people are actually getting some cash in return for picking the right team.
In the current entertainment industry, sports leagues face a bit of a competitive challenge—reality TV shows like American Ninja Warrior display similar impressive athletics in a much more condensed time than a three hour baseball game. A lot of people aren’t willing to watch a sport through the regular season with such low stakes. So the motivation for commissioners and owners to try and get legislation changed is definitely already there.
And let’s face it, when people with wallets this thick get involved in something, they generally get what they want.
So, for the sake of the hypothetical, let’s go ahead and assume that at some point in the near future, sports gambling is legalized.
What does it mean for the three biggest American sports leagues?
For the MLB, it might very well mean Bruce Sherman and Derek Jeter have made a very solid investment. One of the biggest complaints about baseball’s entertainment value is that there are so many games that each one individually means very little. But all of the sudden, the mid-July bout between the Phillies and the Braves could decide whether you win $50 or lose $50.
The only thing that might take a bite out of the MLB’s post-legalization revenue increase is that out of all of the sports, baseball would feel the most like classic gambling. Experts say that a good AAA minor league squad would win about 30% of their games in the MLB, so it’s fair to say there’s a lot of randomness in any given MLB matchup.
For the NBA, it could be a double-edged sword. While the league will undoubtedly prosper in the midst of the renewed interest in regular season and even early playoff games, it could be toxic for the quality of the league itself. As it stands, there is a good motivation for owners and commissioners to try and find a way to sustain a better level of competitive parity. If money gets involved, I have to think that some of that motivation goes away.
However, from an economic standpoint, the NBA can reap huge benefits from this. The average American knows a lot more about the NBA than they do the MLB, and there are still a lot of games being played. Plus, the less chaotic nature of the NBA might lure in gamblers.
While it sounds counter-intuitive, I think there could be some downside to this for the NFL. While the immediate result will be a treasure chest of new revenue, the success this legislation would bring to the other sports may damage the NFL’s future. The NFL’s popularity, after all, is largely a result of each game meaning something. With this legislation, football would lose that patent.
With fears about concussions looming over the league like a dark shadow, the last thing the NFL needs is serious competition from the other sports.
Overall, gambling is something that simply makes sense in sports. Half a century ago, the problem was that players might be motivated to intentionally lose to make some money—but as big as contracts are now, I hardly think that should be a problem.
At this point, consider sports gambling as an inevitable future.