The legalization of sports betting will trigger major changes across the sports industry. Athlete biometric data and player tracking data are expected to make their way into fantasy sports, sports betting, and other fan engagement products. Firms that use that data to fuel their products and services could be among the most impacted by changes. As the use of data evolves, that information will become a money maker for leagues, teams, and businesses who own it and have the right to control it.
Virtual reality sports events, augmented reality mobile apps, exclusive content, fantasy sports, and betting are only a handful of the potential new revenue sources for those who collect or contribute data. Determining who owns the data, who is authorized to use it, and the purposes for which it may be used will be top priorities because of how they will impact innovation, income, and risk. Due to data privacy and property rights, organizations that use biometric and tracking data may be susceptible to both legal claims and regulatory intervention.
After PASPA, a Biometric Data Conundrum
The U.S. Supreme Court’s decision to strike down the Professional and Amateur Sports Protection Act, a 1992 federal law that barred state-authorized sports gambling, means that states can now cash in on legalized sports betting. Professional sports leagues and other sports organizations are also expected to benefit from this. Leagues are already supporting sports betting legislation, calling for a share of revenue in the form of “integrity fees” that would help police betting and prevent corruption.
Leagues and athletes will also have the opportunity to pull in a lot of money from licensing publicity rights—the name, image, likeness, and statistics of athletes. Some of those statistics will include biometric and tracking data, which are encompassed by intellectual property statutes. This is because biometrics, for instance, are defined as biological and behavioral characteristics that identify a specific person. Intellectual property rights are designed to protect these identifying characteristics. The application of publicity rights specifically to biometric and tracking data has not yet been tested in courts, but surely will be.
In fact, publicity rights in player names, pictures and statistics—which could include biometric and tracking data in the future—is the subject of an Indiana State Supreme Court case. Former NCAA athletes filed a lawsuit contending that online fantasy sports contest providers, including FanDuel, need athlete consent to use player names, pictures and statistics. The plaintiffs reason that because fantasy sports providers utilize athlete property for commercial purposes, athlete consent is required.
Seven professional sports players unions, including those of the four major U.S. leagues, filed a joint “friend of the court” brief in that case, asserting that FanDuel’s daily fantasy sports offerings may constitute misappropriation of the athletes’ publicity rights. In oral arguments on Jun. 28, attorneys for the unions argued that FanDuel makes commercial use of athlete names and stats without athlete consent. Attorneys for FanDuel contend that their use of that does not require consent since it “falls neatly” within First Amendment newsworthiness and public interest exceptions that allow reporting of information under free speech. In response, the athletes say that FanDuel is not just a 21st century media company that allows sports fans to engage with news in the forms of stats while also playing fantasy sports. According to Todd McLawhorn, counsel for the athletes, fantasy sports operators are using athlete name, likeness and stats as the actual playing cards on which to build their gambling operations.
The Application of Publicity Rights to Biometric Data
The extent to which publicity rights apply to biometric and tracking data is not clear. Next generation statistics that leverage biometrics, body mechanics, and other data inherent to the individual player and available at a more granular—and intensely private—level are very different from historical statistics.
Examples of where these next-gen stats may come from include the Whoop armband that some NBA, MLB, and NFL players have worn and the Motus arm sleeve, an official wearable approved by MLB. Zebra Technologies provides shoulder pad sensor systems used by the NFL. Second Spectrum combines video, tracking, machine learning, and analytics to help teams and athletes perform their best and create animations for live broadcasts.
Biometric data includes personal health information that may be protected not only as a publicity right, but also under HIPAA, state biometrics protection statutes, and other privacy laws. This is despite First Amendment and other legal arguments that have been used to diminish the proprietary and private nature of some biometric data.
Next-gen stats can also be commoditized and monetized to an extent historical stats never could. This creates a risk that related publicity rights inherent to athletes may be exploited. While these stats can be used to improve personal and team performance, they are also valuable commodities to teams, leagues, fans, endorsers, and the sports themselves.
Monetizing Biometric Data
To be in the best position to monetize biometric and tracking data while the regulatory framework evolves, sports organizations and sports tech companies who collect, use or disseminate athlete data would be wise to keep a close eye on court rulings and legislation and to work with attorneys knowledgeable in this area. They should also proactively obtain athlete consent and ensure all data is tightly protected.
Where data is a valuable commodity in the sports industry, you can expect the fight over ownership rights to increase. Legalized betting, fantasy sports and fan engagement experiences will fuel innovation in this area. As a result, publicity rights will increasingly come into play. Courts and legislators will weigh in as the regulatory landscape evolves.
Kristy Gale is an attorney, entrepreneur, and sports technology law pioneer dedicated to helping athletes, entertainers and consumers protect their biometric data.