Pirates want piece of sports betting pie
Seek fees to finance PNC Park upkeep
The Pittsburgh Pirates want a cut of any revenue generated by sports betting in Pennsylvania to help pay for improvements to PNC Park.
In a letter to the state gaming control board, Frank Coonelly, the Pirates president, said he believes the team is entitled to some of the money because “any revenue generated through sports wagering is largely dependent on organizations like the Pirates who actually supply the sports wagering product.”
“It stands to reason that a portion of the revenue collected from sports wagering should be allocated to the maintenance and capital upkeep of PNC Park and the other sports-based facilities in Pennsylvania which provide for sports wagering in the first place,” he wrote. “We are concerned that no such provision is included in the current law or the regulation.”
Mr. Coonelly wrote the letter in response to the request for input sought by the gaming control board on proposed regulations involving sports betting.
The board is in the midst of crafting such regulations after the U.S. Supreme Court last month struck
down a 1992 federal law that barred states from joining Nevada in permitting bets on individual sports events.
Last year’s gaming expansion bill approved by the Pennsylvania Legislature and signed by Gov. Tom Wolf included a provision that authorized sports betting should the federal prohibition be lifted.
Under the legislation, Pennsylvania casinos would have to pay a $10 million fee for the right to offer sports betting operations. Revenue earned from losing wagers would be taxed at 34 percent for the state and 2 percent for local governments.
The Pirates and their landlord, the Pittsburgh-Allegheny County Sports & Exhibition Authority, have been squabbling for two years over who was responsible for various improvements at the North Shore ballpark.
In February, the SEA approved $2.6 million in reimbursements to the team for PNC Park work, which included a new out-of-town scoreboard, seat replacements, new field lighting and new carpeting and painting in suites and the Lexus Club.
But the team argued then that it was entitled to another $1.9 million in reimbursements for the work.
In his recent letter to the gaming board, Mr. Coonelly said that while the SEA is responsible for capital repairs and improvements at the ballpark, the Pirates are on the hook for maintenance and operational expenses.
“The capital needs at PNC Park are significant and unfortunately are much higher than the current funds allocated to them by our landlord,” he stated.
“We have been engaged in constant dialogue over the past five to seven years with city, county and state officials about the need to allocate a funding source to the capital needs of PNC Park.”
In a statement to the Pittsburgh Post-Gazette, Mr. Coonelly said the SEA has not met its obligations under its lease with the team and has stated that a PNC Park capital reserve fund is not sufficient for the 18-year-old ballpark’s growing capital repair and improvement needs. The fund is financed through a surcharge on ticket sales.
The Pirates, he said, have made several suggestions over the years to the SEA on ways to fund the capital reserve fund to meet its obligations.
“Our suggestion to the gaming control board is another effort to help the SEA meet its lease obligations. Specifically, we asked the state gaming control board to consider using a small portion of the substantial tax that the state has placed on sports wagering to assist the SEA in meeting its obligations under the PNC Park lease,” Mr. Coonelly stated.
The SEA is living up to its lease obligations, said board chairman and state Sen. Wayne Fontana, DBrookline.
“There have been disputes over interpretation of the lease. As of now, we’re fine. We’re doing what we need to do as far as maintenance goes,” he said.
Mr. Fontana said he is open to discussing using some of the revenue that local government will get from sports betting for capital improvements, but it can’t be limited to PNC Park. It would have to include Heinz Field, PPG Paints Arena and the David L. Lawrence Convention Center, he said.
But it also needs to be a two-way street, he stressed.
“They want us to find new sources. But when they get a new source, they don’t want to share the wealth. That has to change,” he said.
Lobbying for ‘integrity fees’
In Mr. Coonelly’s letter to the gaming board, the Pirates also urged the board to set aside money for an “integrity fee” to fund programs to educate “our players, fans, and the general public regarding the potential involvement of unsavory characters and organizations that may attempt to alter the outcome of these sporting events.”
The National Basketball Association also has been pushing for such a fee to cover enforcement costs associated with sports betting, although it was not mentioned in a letter that the NBA, the PGA and Major League Baseball sent to the gaming board.
“The proceeds of this integrity fee would also allow teams such as the Pirates and leagues such as MLB to monitor betting lines and betting information internally,” Mr. Coonelly wrote.
State Sen. Jay Costa, DForest Hills, called the Pirates’ request for capital assistance “totally inappropriate.”
“They should worry more about the product they put on the field than taking tax dollars from Pennsylvanians for capital improvements,” he said.
Mr. Costa, the Senate minority leader, said all of the revenue generated from sports betting has been earmarked for the state general fund and local governments.
The General Assembly did consider impact fees in drafting the legislation but decided against it. “It was not something folks felt was warranted under the legislation,” he said.
Mr. Costa said the gaming board has no authority to dole out revenues for any other purposes than those specified in the legislation. “I think they need to go back and read the statute,” he said of the Pirates.
In separate letters, the University of Pittsburgh and Penn State University also lobbied the gaming board for “integrity” or “impact” fees to help cover educational, compliance and staffing costs.
However, the Pirates were the only ones to seek financial assistance related to capital improvements.
Jocelyn Moore, senior vice president of public policy and government affairs for the National Football League, wrote a letter on behalf of the NFL, the Steelers, and the Philadelphia Eagles, but it did not request a cut of the revenue for any of the teams or the imposition of integrity fees.
Ms. Moore did state the league and the two teams were concerned about the $10 million licensing fee and the high tax rate, saying they “may render legal market participants unable to effectively compete with those in the illegal market.”