Three NBA owners are investing in Sportradar AG, a sports data company which provides information for some of the world's largest international bookmakers. The investments by Mark Cuban, Michael Jordan, and Ted Leonsis are being reported that the team owners see legalized sports betting in the United States as "inevitable".
The investment is further sign that leaders in the NBA see the federal PASPA law as likely to be overturned, whether New Jersey's attempt to legalize sportsbooks succeeds or fails.
Revolution Growth and Ted Leonsis
Those investments were made by Revolution Growth, a private equity firm founded by Ted Leonsis, who owns the Washington Wizards of the NBA and the Washington Capitals of the NHL. Michael Jordan is the owner of the Charlotte Hornets, while Mark Cuban is the owner of the Dallas Mavericks.
Revolution Growth invested a total of $44 million in Sportradar, which is based in Switzerland.
Ted Leonsis became famous for turning AOL into a huge success during his leadership in the mass media corporation from 1994 to 2007. In discussing the investment in Sportradar, the Greek-American businessman said he was attracted by the company's deep experience in sports betting.
Ted Leonsis on U.S. Sports Betting Laws
Leonsis told Bloomberg, "Overseas, gaming and fraud detection have been perfected. So now that they've come to the U.S., I just felt they were just so well-positioned."
He added that unregulated sports betting on the NFL alone generates at least $100 billion a year in the United States. Leonsis figures it is inevitable that sports gambling will be legalized in the United States, where it can be used to generate revenues for dozens of cash-strapped state treasuries.
Saying it was "probably an inevitability" that federal bans on sports betting would be overturned, Leonsis said Sportradar AG's "experience is going to translate and augur well here, because we're [Americans are] years behind."
Sportradar's Advisory Board
Leonsis, Mark Cuban, and Michael Jordan will join Evan Morgan, a Revolution Growth partner, on the U.S. Advisory Board for Sportradar, which has its US base of operations in Minneapolis. None of the three men revealed the amount they invested in the company, though their presence on the advisory board suggests each made a significant contribution.
Mark Cuban said, himself a tech billionaire, said his group understands the importance of technology to the growth of sports broadcasting. Cuban, who made $5.7 billion dollars when he sold Broadcast.com to Yahoo in 1999, said, "Data drives the sports world, and Sportradar is the leading global provider. With our support I think they can be much bigger."
About Sportradar
Americans who've never heard of Sportradar probably are more familiar with its services than they think. The Swiss company has exclusive rights to distribute statistical data for the National Football League, Nascar, and the National Hockey League. Anytime someone looks up NFL, Nascar, or NHL stats on their iPad tablet or Microsoft computer, they are using Sportradar stats. All they have to do is scroll down to the bottom of that stats page to see the company's identification.
The company was founded in 2000. Since then, its service had underpinned the legal European sports betting industry. Besides providing data, the company also provides fraud protection for gamblers and bookmakers alike. In the United States, the company has been far less active, because sports gambling is illegal in 46 states. Instead, the Swiss company has focused on building relationships with top Internet companies like Google, Facebook, and Twitter. Sportradar also provides stats for FanDuel, the Scottish daily fantasy sports site.
Ulrich Harmuth on US Sports Betting
Ulrich Harmuth, Sportradar's American president, said that his company is well-situated to expand operations, if the 1992 PASPA law is ever overturned. Harmuth said, "If the U.S. market opens up for gaming we are ready to shoot. We have the products readily available. We're in the perfect position to also serve customers in the U.S. gaming market."
The Professional and Amateur Sports Protection Act (PASPA) is being tested again in a Philadelphia appellate court. The 3rd Circuit Court of Appeals agreed to an "en banc" ruling on the PASPA, after the State of New Jersey appealed a 2-1 August decision which ruled against their to legalize sports betting in the state.
The appeal stems from a lawsuit brought by 5 Americans sports associations, including the NFL, NHL, NBA, NCAA, and Major League Baseball. The suit was filed by those five associations after New Jersey changed its gaming laws to allow legal sports betting at the states land-based casinos and racetracks. New Jersey continues to lose court cases involving the PASPA, but many believe the 3rd Circuit Court's en banc panel is the state's best chance to overturn federal law.
If that happened, the sports betting could become legal under federal law a lot sooner than average citizens think.
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