MLB royalties for Washington state if sports betting is legalized

MLB royalties for Washington state if sports betting is legalized

Washington state is still quite a ways away from legalizing sports betting, but that isn’t stopping the MLB from declaring royalty fees if lawmakers intend to do so. Three bills related to sports betting were discussed in the state’s last legislative session, but none of them even came close to receiving approval.

SB 5965 simply served as a placeholder, while HB 1992 and HB 1975 received a little more traction. HB 1992 would make sports betting legal at both commercial casinos and tribal establishments, while HB 1975 would only allow tribal casinos to offer sports betting. Neither HB 1992 nor HB 1975 would permit mobile sports wagering.


Of the two, HB 1975 (the bill for tribal casinos only) definitely garnered the most support. It did pass in the committee for Commerce and Gaming, but it fell short once it was sent over to appropriations. Regardless of which bill ultimately does come to pass, the Gambling Commission for the state will undoubtedly oversee legal sports betting within Washington.

As it currently stands, the road to legal sports betting is an uphill battle for the rainy state. Even the most optimistic predictions don’t expect sports betting to become legal until 2021, more than a year away.

Nonetheless, the MLB is making it explicitly clear that they believe they are due a royalty if/when the state does legalize sports betting. In a presentation conducted late last week, Major League Baseball’s sports betting and investigation senior counsel member Marquest Meeks mentioned that the league should receive a 0.25% royalty fee for every wager placed.

Meeks believes this is fair because the ability to place a wager on MLB games would not be possible without baseball. Furthermore, he indicates that this is crucial to upholding the integrity of Major League Baseball. Much of his presentation focused on the infamous Black Sox scandal, in which several members of the 1919 Chicago White Sox conspired to fix the outcome of the World Series.

Now a whole century later, sports betting is quickly growing in popularity thanks to the recent overturning of the federal ban on it. There are a total of 13 states now that offer legal sports wagering in some capacity. It is important to note that none of these 13 states actually pay a royalty to the MLB.

Imposing a royalty on the state of Washington is particularly tricky due to the fact that there are several tribes with gaming compacts with the state. Considering that the most popular bill, HB 1975, would only permit sports betting at tribal casinos, it is near impossible for the MLB to force the state to pay a royalty. Governments cannot place any taxes and/or fees on any form of tribal gaming. If a royalty is ultimately agreed to, tribes within the state will need to commit to paying it themselves.

It is definitely understandable why the MLB would want royalty fees for wagers placed on their sport. Unfortunately, Washington state is just not a good state to focus their efforts on. The state is home to an MLB team, the Seattle Mariners, but this alone is not enough to mandate a royalty. Add on the fact that no state with legal sports betting is currently paying a royalty to the league and it is clear that the MLB is really making a longshot with their proposal in Washington.

Before the league gets carried away, Washington state does first need to actually legalize sports betting. The next meeting for the state’s Gambling Commission will be in the middle of November.

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