The debate over official betting has erupted as a key front in the fight over legal US sports gambling. Leagues are determined to become primary stakeholders in the industry and profit from it, ideally via a cut of every wager placed on their events. Short of that, they have a more modest goal: to impose mandates on state-regulated operators, requiring them to use official data. Official data is the stats, scores and other information associated with a sporting event that are published by a governing body of a sport or league, organization or association whose corporate headquarters are located in the United States or an entity expressly authorized to provide such data to licensees.
Typically, official data is supplied by major league sports franchises or their federations. The American Gaming Association supports private commercial agreements for official data but opposes legislative mandates that tie operators to specific sources. Mandates limit choice and drive up costs for bettors. They also introduce inconsistencies and distortions into the marketplace by granting one party what amounts to a data monopoly.
As a result, the majority of states that have legalized sports betting have declined to include official data mandates in their laws. The only exception is Tennessee, which requires that sportsbooks use official data for Tier 2 bets, defined as those placed during an in-game period. That structure is a compromise that allows regulators to deem whether or not a source provides official data in a commercially reasonable manner.
Illinois is the latest state to adopt a similar policy, though it is somewhat more nuanced than Tennessee’s. The law specifies that sportsbooks must use official data for Tier 2 bets, which are bets on the final score and outcome of a game. Tier 1 bets, on the other hand, can be graded without access to official data, as they are based solely on observed human behavior and statistical patterns.
In the past, some lawmakers have attempted to bundle official data mandates with a host of other issues related to legal sports betting, including integrity fees and the treatment of professional and collegiate sports teams. Efforts to add these items to legislation in Louisiana, Florida and Kentucky have ended up sinking the proposals.
The question of what constitutes official data remains open, but the fact is that it is not enough to create a reliable and consistent betting product. The availability of a wide range of data sources and the ability to compare them against each other is essential to creating a competitive betting market. States that want to create a robust sports betting industry should leave data requirements up to the discretion of regulators rather than forcing companies to sign costly licensing agreements with a single source of information.