Report Alleges Michigan Lawmakers Were Enticed To Include Official Data Mandate For Legal Sportsbooks

Posted on January 25, 2020

The official data mandate for future Michigan legal sportsbooks could be proof of the power of the “golden rule.” That rule is those who have the gold make the rules.

A report in The Athletic alleges that three Wolverine State lawmakers got a plush visit to a Florida golf course to meet with representatives of MLB, the NBA and the PGA. Conveniently, months later the state enacted a law that forces legal sportsbooks in Michigan to buy “official” data from those same leagues.

What is an official data mandate, and why does it matter?

Sportsbook operators typically do not hire staff to sit and watch all the games that they offer action on. Instead, they rely on other companies to provide that information.

That includes not only who wins games but the results of individual actions within those contests. There are many vendors in this line of work.

Some of them, however, have paid money to professional sports leagues to become the “official” provider. An example is Sportradar with the NBA.

Leagues have argued in many states that legislatures should compel legal sportsbooks to buy that data only from their official partners. The argument is that “unofficial” channels are unreliable, and it provides an incentive to the leagues to make sure their data partners are in compliance with league standards.

While not all states have acquiesced to this request, Michigan did. The new law in Michigan requires sportsbooks to buy their information from official sources for in-game wagers unless the sportsbooks can prove the cost of doing so is commercially unreasonable.

If the recently surfaced report is true, then how this mandate became law is clear. The allegations point to it being a quid pro quo.

What The Athletic report alleges and who is involved

According to the report, Michigan House Speaker Lee Chatfield, Rep. Brandt Iden and Rep. Jim Lilly all traveled to TPC Sawgrass in Florida last February. There they met with MLB, the NBA and the PGA.

The lawmakers don’t dispute that they met with those representatives during that time. What they do dispute, however, is that the leagues paid for their accommodations.

The article in The Athletic states the leagues paid $260 per person for food and drink. Chatfield, Iden and Lilly say they paid for their flights and lodging themselves.

While $260 is a drop in the bucket compared to the hundreds of thousands of dollars the leagues have spent on lobbyists toward this end, the amount of money isn’t crucial. What is far more important is the power that these individuals held.

Why this is an issue for the Wolverine State going forward

If the allegations are true and these three pivotal lawmakers in the sports betting legalization process got free meals from the very parties who most stood to gain from the inclusion of this part of the law, that’s a bad optic. It calls into question whether the law would have included that requirement if not for the alleged palm-greasing.

There is a bigger concern, however. The law also repealed an old statute that forbids gambling companies from making direct political donations.

If lawmakers like Chatfield, Iden and Lilly can essentially be bought, if true, by gambling interests for a measly $260 in drinks and food, what might thousands of dollars toward reelection campaigns buy? Following that train of thought leads to a dark place.

It’s unclear as of yet whether the state will investigate. Regardless of that, the mandate is problematic.

There is simply no proof that “official” data is in any way superior to “unofficial” information. The “official” companies use the exact same collection and reporting methods as their competitors.

The only real difference is a contract between those companies and the leagues. It’s proof that the golden rule can often override the rule of law.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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