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“We are not interested in the discussion of integrity fees” | Keith Wachtel, NHL

The National Hockey League has been swift to capitalise on the repeal of PASPA and the subsequent legalisation of gambling in some US states. Starting next season, the organisation will introduce puck and player tracking to create more in-play betting markets around its content. SportBusiness speaks to the league’s chief revenue officer and executive vice-president, global partnerships, Keith Wachtel.

(Nils Petter Nilsson/Ombrello/Getty Images)

When do you anticipate the technology will be ready to introduce puck and player tracking data in the NHL?

We have been developing the system over the past three years. It’s very difficult to track a puck that travels a hundred miles an hour and players that skate 30 miles an hour, so it’s taken us a long time to figure that piece out. We successfully tested the technology at the CES trade show; we did a live demonstration at the All-Star game. It is extensive hardware, puck manufacturing and all of that that needs to be done. We will be rolling that out in all 31 arenas during next season with the hope to launch the system sometime towards the second half of next year. It could be next year’s All-Star, it could be next year’s playoffs, but we do intend to implement the system league-wide in some fashion next season.

What betting markets will that create?

The amount of data that we will have is significant. It’s going to be able to provide data points that we’ve never been able to accumulate. The market for prop bets in the United States – outside of really the NFL, and even that is primarily Superbowl focused – is very limited. If you look at the operators, they tell you that they think it’s certainly going to be an important part of the betting landscape.

I certainly think the marketplace will dictate what makes sense, but we see [betting on] things like hardest shot, fastest skater, distance travelled, the ability to look at who’s going to score the next power-play goal.

Keith Wachtel, chief revenue officer and executive vice-president, global partnerships, NHL

The NHL now has three betting partners: MGM, William Hill and FanDuel. Which betting markets are they most interested in developing?

MGM is very interested in social and predictive gaming – the ability for them to not only provide that for betting markets, but for NHL or sports enthusiasts in general who might want to play against their peers. Obviously, peer-to-peer gaming has been successful in Europe. From that standpoint, we are interested in doing more with this data, whether that’s with MGM or at some point developing that ourselves, where the NHL will have an in-play game that can be engaged by all of our fans. We see these new data streams not just from a betting standpoint. Really it’s all about engagement and that’s why we’re so excited about the development of the system.

The Washington Wizards and NBC Sports Washington recently introduced predictive gaming into a pilot broadcast of one of the team’s games in the NBA. Can you see teams in the NHL doing something similar?

[Washington Wizards owner] Ted Leonsis is [also] one of our owners and extremely progressive. He’s been instrumental in helping us craft what our strategy should be. Given also the progressive nature that we’ve taken in the space, I think we have a greater opportunity quite frankly, to grow the handle in the sport of hockey. We’re seeing tremendous numbers in the growth of hockey, ever since the Golden Knights came to Las Vegas. Like I said, we’re being much more progressive at this point in time than the other major professional leagues in the US, so we see it as a great opportunity to explore all of these types of integrations.

NHL commissioner Gary Bettman has not called for an integrity fee to be levied on bets on the NHL. Why are you less keen on calling for these fees than other leagues?

We are the league that is not interested in the discussion of integrity fees. We are not legislating for that and don’t believe that that is a place for us. If that’s something that happens, then fine, but we are not out there calling for it. We believe in commercial relationships, which is why you see us having three partnerships [with betting companies].

We have no interest in forcing the value of our data on someone if they’re not interested in it. There are lots of ways to engage with the NHL and our fan base, so we are receiving financial benefits from our partners simply for the rights and benefits that we’re providing. We are not involved in the handle whatsoever. There are so many difficulties in doing so from a regulatory standpoint that we believe, at this point in time, with the limited number of states that have legalized it, we’re better engaging and entering into partnerships. If we can increase the engagement and increase viewership, whether that’s through television or digital products, that’s really where the big opportunity is for all of us – not in trying to secure small integrity fees, or even these commercial relationships.

You mentioned the Golden Knights and Las Vegas. How important was the new franchise in securing the partnership with MGM? And how influential was the NBA’s deal with MGM?

We were talking to MGM way before the NBA. The Golden Knights’ arena is partly owned by MGM. Once we brought the Golden Knights to Vegas, it gave us an opportunity to spend a lot of time with operators. First of all, the operators saw the potential of gambling on a sport that has been underserved by the gambling community. Two, the unprecedented run of the Knights meant we spent a lot of time in Las Vegas, cultivating relationships and listening to what they wanted out of the category from the sports marketplace. I think our progressive approach – not having the discussion about integrity fees and data leading it – enabled us to ingratiate ourselves with the community much more quickly.

The Vegas Golden Knights in game five of last year’s Stanley Cup final. (Harry How/Getty Images)

What sort of impact did the success of the Golden Knights have on the amount of betting in Vegas?

If we use the William Hill sportsbook, our partner and the leading sportsbook in Vegas, the handle grew 80 per cent or so in the first year that the Knights were there.

How does MGM’s partnership with the NHL differ from the ones with William Hill and FanDuel?

We have the agreement with our players association to chip the players. MGM saw the benefit of that and wanted to make sure that this was a system that they were going to be able to take advantage of. Right now, they are the only one of our three betting partners that we have granted the rights to puck and player tracking. They saw the tremendous value in the short-term with puck and player tracking data, whereas the others want to see what it is first. If you talk to Scott Butera [MGM president of interactive gaming], I think he will tell you that the way they look at this is as a way to engage fans and MGM customers, no matter where they live.

Did the current collective agreement with the players allow for these relationships or did you have to re-negotiate with the players to get access to their movement data?

It’s not included in our current collective bargaining agreement. We did a separate agreement with them. The players have been great as far as understanding the importance of the engagement factor and what that can lead to in the future for the players. They have been very willing participants and it was an additional agreement for us to be able to do that.

The American Gaming Association predicted the legalisation of betting in the US would be worth an additional $216m in revenues for the NHL. Do you think that’s an accurate figure?

It’s difficult to tell. I think the majority of those predicted revenues are indirect revenues. We don’t really take stock in it, other than we know there is some money to be made on a commercial basis. But for sports leagues it is minimal compared to the rest of their business. That’s why our approach is to do partnerships with big leading brands that see a vision of fan engagement. The revenues are nice to have, they’re new, but the significant revenue streams are not from these commercial relationships. Remember, there’s only a few states that matter right now in the landscape of sports betting. Vegas and New Jersey really are it because of the amount of handle and because of the way they’re set up, especially in New Jersey with mobile betting. As states legalize and more states enable that type of betting infrastructure, the value of those commercial deals with operators goes up significantly, and then there’s a waterfall effect.

Most of your deals with sportsbook operators are short-term. Why is that?

The next two to three years, for us it’s really about establishing these relationships with the operators and learning, seeing what the marketplace wants and then we can reassess in a few years when more states are legal. Who knows? Some of the broadcasters that we’ve talked about, they might get in the game. I think you will start to see the traditional broadcasters and the digital companies start to look at sports betting in a different way.

Are you hamstrung by the fact that sports betting is only legal in a handful of jurisdictions where there is an NHL team?

Our clubs are allowed to take camera-visible signage opportunities with gaming operators, even if gambling is not legal in the state. There are two opportunities for clubs: one in states where sports betting will become legalized, where they’re confident that it will be – it’s an opportunity to get in the door early and start to build some awareness. Secondly, we see it as an opportunity for states that are bordering jurisdictions where gambling is legal. In New York, the New York Rangers could accept William Hill or FanDuel advertising and put William Hill or Fan Duel on a camera-visible dasherboards because New Jersey is right around the corner. Certainly, in states that are legal there’s going to be a much better opportunity for our franchises, but we want to see this as an opportunity for all of our clubs to see a benefit. We are being much more progressive in how we look at it because we want everyone to start engaging, not just at the national but also at the local level.

Keith Wachtel will be speaking at Betting on Sports America, the largest dedicated sports betting trade show in the US, which takes place in New Jersey from April 23-25. The event will present 175 industry leading speakers across 40 sessions and 3 conference rooms. For more information, or to get tickets click here.

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