12.02.07Tigers lottery? MLB eases up, a bit, on gambling
By Bill Shea
Crain's Detroit
Feeling like a little game of chance at Comerica Park?
Two kiosks at the stadium this past season sold $5 scratch-off Michigan Lottery tickets emblazoned with the Detroit Tigers logo. Prizes varied up to $100,000, and included team merchandise and even season tickets.
Legalized gambling, once unthinkable in relation to Major League Baseball, has gradually gained limited acceptance in the game as a source of revenue. The same Major League Baseball that once banned Willie Mays and Mickey Mantle for being associated with casinos has cautiously embraced advertising and sponsorships from various legalized gambling outlets — provided the casinos or lotteries don't permit betting on games.
Betting at games and betting on games is the crucial difference.
But those who keep tabs on the business side of the game agree that baseball is more tolerant of some forms of legalized gambling, especially when there is money to be made for teams and American culture has come to increasingly accept casinos and lotteries.
"Baseball will continue to change the configuration of its rules as their business practices shift and change. Their views on things that may have been taboo in the past change," said Maury Brown, president of Portland, Ore.-based Business of Sports Network, which includes a Web site devoted to the business side of baseball. "There's definitely a softening of (prohibitions against legalized gambling) in baseball."
New York-based lottery ticket maker Scientific Games Inc. spent more than six years trying to persuade baseball to sign a deal to allow team logos on state lottery scratch-offs, said Steve Saferin, vice president and president of properties. The company has licensing deals with Ford Motor Co., Chrysler L.L.C. and a variety of popular culture icons such as the TV show "American Idol."
"Lotteries now are in all but seven states and are viewed by a lot of people as a legitimate way to raise money for good causes," he said.
Finally, in 2006 the team owners unanimously approved a five-year deal.
The commissioner's office and the team owners' primary concern was the question of permitting any form of gambling in connection with the game, Saferin said. The memory of Pete Rose's lifetime banishment in 1989 for betting on games while managing the Cincinnati Reds is still very much alive.
"A scratch-off lottery ticket is about as far from betting on teams as you could get," Saferin said, noting that the National Basketball Association and National Hockey Association already had deals with Scientific Games.
"The league decided this is a legitimate way for teams to generate incremental revenue. It got easier the past three years because a lot of other people had embraced the lottery category, including sports. It was difficult. They've come to the realization that their position needs to be more finely tuned. The real problem is sports betting. This is not sports betting."
Commissioner Bud Selig wanted a unanimous vote from the owners to OK the lottery tickets deal, Saferin said. The approval from owners was also to change MLB's bylaws that forbid team logos on lottery tickets.
Scientific Games rolled out the MLB tickets last year with a Boston Red Sox instant game. This year, 22 teams participated and Scientific Games printed about 175 million tickets since games began.
The Tigers-themed scratch-off tickets were a success this year, lottery officials said.
Since going on sale April 2, about $10 million worth of the scratch-off Tigers lottery tickets have been sold, the state said, which is about 10 percent higher than average $5 tickets sales. Detroit Red Wings and Detroit Pistons scratch-offs have also been sold in the past.
The lottery reported fiscal year 2007 annual sales of $2.3 billion.
Each team receives a cut of the money that Scientific Games paid MLB for the rights to the team logos. Neither MLB nor Scientific Games would say how much the deal is worth, but it's believed to be in the millions of dollars. Teams also got money from local marketing Scientific Games did in each market, Saferin said.
Susan Goodenow, Major League Baseball's vice president of business public relations, declined to comment on the lottery tickets.
Rob Matwick, Tigers vice president of communications, said the team has had an advertising relationship with the lottery for several years, but the scratch-off promotion was through Major League Baseball.
A veteran of more than 20 years in baseball, Matwick said he's seen a shift in attitude about some forms of gambling.
"From an advertising and sponsorship standpoint, it's less restrictive than it used to be," he said. MotorCity Casino and MGM Grand Casino each advertise at Comerica Park. That's allowed because neither offers sports wagering.
"There are still prohibitions that are still in place that have to do with casinos," Matwick said, noting casinos are not permitted to show such things as playing cards or slot machines in stadium advertising.
MotorCity Casino is owned by Marian Ilitch, wife of Tigers owner Mike Ilitch. Baseball forbids its team owners from having a stake in casinos, but the Ilitches say she was never an owner, and baseball agrees — a position with its share of critics, including ex-Commissioner Fay Vincent.
Mike Dietz, president and director of Dietz Trott Sports & Entertainment in Bingham Farms, spent 17 years with Ilitch Holdings Inc., which includes the Tigers and Red Wings. He believes money from legal gambling is a natural source of revenue for sports leagues. Baseball reached a record $6 billion in revenue last year, thanks in part to gambling-related advertising and sponsorships.
"Everything costs more — to field a team, to give fans what they want. There are a lot of bills to pay and a lot of reasons to be open-minded about new sources of revenue," he said. There's only so many (sponsors) and so many are cutting back."
So what does the future hold for baseball and legalized gambling?
Business of Sports Network's Brown thinks it will be driven by profits.
"Are we going to see video poker at the ball park? I don't know. In 20 years, it wouldn't surprise me," he said. "Baseball has gotten wise and smart about how to extract revenue out of things other than baseball. It's a much more sophisticated league."
And perhaps another sign of shifting attitudes: Baseball's 2008 winter meeting will be held in Las Vegas.
Bill Shea: (313) 446-1626, bshea@crain.com
Tiger lottery facts:
- New York-based Scientific Games Inc. spent more than six years persuading Major League Baseball to allow team logos on state lottery scratch-off tickets. Other lottery games from Scientific include scratch-offs featuring Chevy, Dodge, Jeep, Lincoln, NASCAR, NBA, NHL, "American Idol," Hershey's and TV Guide.
- Point-of-sale and broadcast advertising for the Detroit Tigers instant game was done by Troy-based ad agency Simons Michelson Zieve Inc., which has done lottery work since 2005.
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