Integrity Fees and Official League Data Mandates

Following the repeal of PASPA in 2018, major US sports leagues (NBA, MLB) sought to monetize the legal betting market, initially proposing a statutory **Integrity Fee** of 1% of total betting handle. Operators successfully defeated this proposal by demonstrating that 1% of handle equated to ~20% of revenue, which would render the industry unprofitable. In response, the leagues pivoted to **Official League Data Mandates**. This strategy involved lobbying states (successfully in Tennessee, Illinois, and Michigan) to legally require sportsbooks to use official league data feeds for settling **in-play (Tier 2) wagers**. This effectively converted the failed tax into a commercial requirement, forcing operators to purchase data rights from exclusive distributors like **Genius Sports** and **Sportradar**. While the statutory "fee" was rejected, the data mandate system successfully secured a revenue stream for leagues, embedding data costs as a fundamental expense for modern sportsbooks.