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Two independent recent developments in collegiate and professional sports are converging: the use of athletes’ biometric data and the proliferation of legalized sports betting. Through innovative technologies, the monitoring of players’ physiologic information during performance is growing rapidly. Simultaneously, 20 states have legalized sports wagering with more in the pipeline, ushering in a new era of fan engagement in sports events.
Since there is a good deal of attention on the planning to “re-open” sports, this article discusses potential implications of these developments, particularly for sports content partners and their inclusion of biometric data in their programming. Programmers will likely find the inclusion of this real-time information on an athlete’s physical condition an appealing “add-on” to its content as an innovative tool to capture viewer engagement. But it is not without risk.
There are concerns over ownership of intellectual property, statutory rights of publicity, privacy rights, contract rights, and compliance with nascent regulations on the use of biometric data, the rules of which vary significantly from state to state.
Since May 14, 2018, when the Supreme Court, in Murphy v. National Collegiate Athletic Ass’n, invalidated the Professional and Amateur Sports Protection Act of 1992, nearly half the states have begun to legalize sports betting. Thus, when the collection and use of biometric data is available to sports bettors, this information may trigger additional scrutiny by gaming or privacy regulators, or both.
What is biometric data, and how is it being used?
An athlete’s biometric data are the unique biological and behavioral characteristics that identify a specific individual. Pro teams collect this data and monitor it for coaching, development and talent evaluation decisions. Currently, teams can measure an athlete’s respiration, temperature, blood pressure and other systemic levels in real time. Access to this data can have significant value to participants in sports betting by influencing their assessment of a player’s and team’s performance.
In terms of collegiate sports, the National Collegiate Athletic Association (NCAA) has not issued an overall rule regulating the use of wearable devices. It has approved of the use of some wearable technologies for purposes of health and safety and has limited the collection of biometric data. For example, it denied a request to adopt the use of helmet cameras to gather information assessing head trauma. The NCAA has left rules for wearable devices during competition up to the rules committees for individual sports and the individual universities. The University of Michigan Wolverines were the first major college team to consent to collecting private biometric data from their athletes as part of their apparel contract with Jumpman, a Nike division, which allows for collection of data through heart-rate monitors, GPS trackers and other devices.
What agreements do the major pro sports leagues have regarding player biometric data?
Leagues negotiate Collective Bargaining Agreements (CBAs) with players through their bargaining representative, the players’ union. The CBAs, and the terms of individual player contracts authorized by the CBAs, address the players’ health, safety and medical issues. There are also commercial agreements between teams/leagues and third-party entities, such as creators of wearable technology or wagering partners, which govern the use of player data.
The National Hockey League (NHL) has specific agreements with its players regarding wearable technology. The commercial data agreements between the NHL and hockey players grant the NHL the ability to sell puck and player tracking data. In addition, in October 2018, the NHL entered into an agreement with MGM Resorts International as a gaming partner and afterward announced a data accord with FanDuel, where, as part of the MGM agreement, the NHL would provide “enhanced data and analytics” for wagering content.
Major League Baseball (MLB) has an agreement with players about wearable technology covering “any equipment, program, software, device or attire which is designed to collect and/or analyze information or data related to a Player’s health or performance at any location (including on-field, off-field and/or away from the ballpark).” These technologies include “without limitation: activity trackers, electronic bat sensors, biomechanics compression attire, GPS/tracking compression attire and any device, sensor, equipment, attire or dashboard technology which is designed to measure a Player’s health, performance and/or readiness.”
Any commercial use or exploitation of the data collected by the MLB, however, is “strictly prohibited” and players may opt out of wearing the technology. Players, moreover, are prohibited from using wearable technologies in games. Certain types of biometric data, such as heart health evaluations like EKGs, are used only for maintaining players’ health and not as a part of contract renegotiations. MLB has, however, partnered with WHOOP, a “human performance optimization company” which can capture in-game data. WHOOP manufactures wearable bands that measure steps, calories burned, changes in blood flow, heart rate, heart rate variability, sleep patterns and more. WHOOP technology allows teams to synthesize player load, which is the measure of physical exertion performed by the athlete (external load) or the physiological and psychological stress on the athlete’s systems (internal load), with other player metrics, such as sleep data.
Under its collective bargaining agreement with the players, the National Basketball Association (NBA) has agreed to limit the access teams have to player data they collect. The NBA collects data from wearable devices, which measure “movement information (such as distance, velocity, acceleration, deceleration, jumps, changes of direction, and player load calculated from such information and/or height/weight), biometric information (such as heart rate, heart rate variability, skin temperature, blood oxygen, hydration, lactate, and/or glucose), or other health, fitness, and performance information.” Through traditional methods or wearable technology, the NBA also collects data on breathing rate, bone density, body composition, GPS location, and neuromuscular function.
Furthermore, under the NBA’s CBA, players may opt out of the use of wearable devices. Before a team requests that a player use the wearable technologies in practice, the team must provide the player with a confidential explanation of (1) what the device will measure, (2) what each measurement means, and (3) the benefits to the player in obtaining such data. The NBA has a multiyear deal with MGM as an official gaming partner, has partnered with Francoise de Jeux as its European wagering outlet, and has deals with Sportradar and Genius Sports, who have nonexclusive rights to distribute official NBA betting data to licensed sports bettors.
The NFL, like MLB, reached an agreement with WHOOP in 2017 that gives the players ownership and control of their individual data and the ability to commercialize their data through the players’ union’s group-licensing program. Under the agreement, the NFL provided a wearable band to each player to monitor the effects of travel, sleep, scheduling and recovery from injuries. The NFL also has partnered with a company that manufactures wearable and data-tracking devices, which deploys implants in every player’s equipment and tracks players’ speed, distance traveled and acceleration/deceleration. The company also manufactures RFID tags that can be placed in the footballs themselves.
Who owns player biometric data?
In the future, leagues or teams may seek to license players’ biometric data as part of the other licensed media rights, meaning the data could appear on a broadcast or live stream that viewers could access including for uses including betting. One question this raises is, who owns this information and intellectual property? In the absence of a contractual arrangement (e.g., in a CBA), the answer may depend in part on the application of state law. In Daniels v. FanDuel, the Indiana Supreme Court rejected former college football players’ claims under the Indiana Right of Publicity statute that the use by FanDuel and DraftKings of the players’ names, images and playing statistics without their consent violated their rights under that statute. In C.B.C. Distrib. & Marketing, Inc. v. Maj. League Baseball, the 8th U.S. Circuit Court of Appeals found that CBC’s use of baseball players’ identities in connection with fantasy baseball products without a license made out a cause of action for violation of their rights of publicity under Missouri state law, although it held that the First Amendment preempted application of the Missouri law.
Arguably, biometric data has distinct differences from statistics, which were at issue in Daniels, or the information at issue in C.B.C. Distrib. & Marketing: it is unavailable to the public, and it is often comprised of protected health information (PHI). Therefore, a court may view biometric data as distinguishable from the rights the players sought to protect in Daniels.
The opportunity for amateur athletes to own and be compensated for the fruits of their activities is also an evolving issue. The NCAA voted in October 2019 to allow college athletes to be compensated for the use of their name, image and likeness without jeopardizing their amateur status. The relaxation of the NCAA’s long-standing prohibition of amateur athletes’ compensation will provide another seat at the table in this dynamic legal landscape.
How does access to biometric data connect to sports betting?
Biometric data could become incorporated into betting, either as a metric on which fans bet, or as information that fans use in placing bets on players or teams. News outlets have generally reported that it is unlikely that biometric data itself would be the subject of betting, but would nonetheless be valuable data in betting on sports. But in the same way that bets are made on actions as specific as whether an NBA player will miss a foul shot, it is not inconceivable that bets would also be made on whether the same player’s heart rate increased attempting the foul shot.
Inevitably, the question is: Who would license this information for sports betting purposes? Does the player own this data? Potentially. But it is undetermined how teams or associations could use this data, and how they would release it. The recently defunct Alliance of American Football (AAF) entered into a partnership with MGM in which the AAF licensed the players’ biometric data, which would be used on an app that would allow the bettor to place wagers during the game with odds that were directly affected by the data. The AAF went under before this plan could be executed. While the plans to add biometric data to the real-time player-tracking live stream did not develop before the AAF folded, this could have included features such as a quarterback’s heart rate affecting the betting odds for a certain team. This type of technology is an example of the way the established sports leagues may view biometric data for sports gambling opportunistically: licensing biometric data as an additional revenue stream as well as a way to enhance viewer and fan engagement.
With sports betting, biometric data becomes even more valuable and privacy concerns around protected information, therefore, are heightened, and players may have private causes of action arising from a security breach or similar event. There is an increased incentive for hackers to access this information because of the enhanced value it would have in sports betting, making the cybersecurity concern even more relevant.
What are the implications for sports licensees of biometric data?
As discussed above, the sports leagues have already begun to exploit biometric data in commercial agreements with third parties. The revenues generated by licensing biometric data to programmers and networks as well as companies in the sports betting food chain may be attractive, but in establishing policies governing the data teams and leagues will also have to evaluate the risks of licensing this data to third parties. Teams and leagues, therefore, will likely seek to have strict controls over the use of biometric data.
From the standpoint of programmers and sports betting entities, the coupling of biometric data with the real-time distribution of sports events will be perceived as an innovative way to increase viewer engagement, and therefore, revenues. As this article has identified, this is not without risk. The potential areas of liability, and regulatory compliance, include the following:
• Intellectual Property
• Right of Publicity
• Other Regulatory Requirements
The challenge for lawyers advising programmers and parties in the sports gaming industry will be to ensure that their companies’ use of this new category of content does not expose them to new liabilities. At present, there are already multiple areas of potential exposure, and as the uses of this content increase, it is likely that additional regulatory measures will be developed. To avoid traps for the unwary, practitioners in this field are encouraged to be vigilant in navigating this dynamic legal landscape.
David Sussman is special counsel in Jenner & Block’s Content, Media and Entertainment Practice. Based in New York, he previously served as the chief legal officer at NBCUniversal’s Content Distribution Group, general counsel and executive vice president at MTV Networks and general counsel and chief operating officer of the New York Yankees.
Amy Egerton-Wiley is a Los Angeles-based associate in the firm’s Litigation Department.
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