FANTASY SPORTS - WHY THE MLB LIKES THE CARVE-OUT

16 March 2007

Big bucks for sports bodies...and politicians

The New York Sun carried an insightful op-ed piece this week which examines why American sports bodies like Major League Baseball have implacably opposed online gambling in the USA.....as long as there's a carve-out in the legislation for fantasy sports.

Along with horse-racing and state lotteries, the carve-out for fantasy sports is continued in the latest American legislation that seeks to hamstring online gambling in the United States by making financial transactions with online gambling companies illegal.

The article explains that the MLB spent a good part of last year trying to corner the fantasy baseball market, unsuccessfully arguing in court that player names and statistics are not public events, and raising the licensing fees for officially endorsed fantasy baseball games such as those run by ESPN well into the millions of dollars.

This, the article claims was part of a basic strategy to centralise the huge fantasy market around MLB's Web site, thus giving baseball a finger in every fantasy pie.

Though that strategy was dealt a blow by the August decision that MLB could not stop small companies from running fantasy games using baseball statistics, fantasy games remain a large and growing revenue stream for MLB, with seven officially licensed fantasy games, with each licensee paying a reported $2.5 million - an extremely valuable platform for the promotion of the sport.

The piece goes on to sharply criticise Senator Jon Kyl, long the nemesis of the online gambling industry with his repeated attempts to introduce banning laws: "Happily for baseball, Mr. Kyl's ban on online gambling includes a carve-out for fantasy sports," the article explains. "Five card stud might be crack, but apparently the crystal meth that is fantasy baseball is fine with the good senator, who obligingly cleared out a whole gang of rival dealers so that MLB and the other major team sports could sling their product on the corner.

"Head over to MLB.com and you'll be pointed to clean destinations where you can wager on baseball through fantasy sports leagues - a good, legal way to spend some of that cash you otherwise would have burned in your virtual crackpipe."

The author then claims that according to records accessed through the Center for Responsive Politics, Kyl raked in $41 398 from MLB executives and the game's political action committee last year. And he wasn't the only one to benefit from this organisation's largesse.

Senator McCain, for instance, received $20 343 toward his Straight Talk America PAC from MLB. And Rep. Tom Davis, in his guise as chairman of the House Government Reform Committee, counted the MLB among his top 20 donors - right up there with Microsoft, at $11 250. Senator DeWine counted up $21 200 in contributions from MLB bigwigs, and another $27 210 from the lobbying firm of Baker & Hostetler, whose main client is.....MLB.

Another thing these politicians have in common with each other and with Senator Kyl is their membership of the Republican Party. But MLB owners happily cut their checks to both political parties - around $280 000 funneled toward the Democratic senatorial and congressional committees, and another $72 000 to the Democratic National Committee Services Corp., will keep Hill staffers returning phone calls.

Sadly for baseball, a look over the pattern of giving, gives off the feeling of a lot of bets gone bad, something of which Kyl would no doubt disapprove. DeWine wasn't the only MLB-backed loser. Baseball sent Washington's Senator Cantwell, a frequent sponsor of bills approving of various heroic baseball deeds, $14 800 - but her opponent, Michael McGavick, got $23 400. In Virginia, Senator Allen got $9 400. In Pennsylvania, Senator Santorum nearly doubled up on Senator Casey in baseball cash. Ex- New York Mayor Rudi Giuliani's campaign funds received $21 400 from MLB owners.

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