Provincial Sports-Betting Threatens NBA Franchise Start-Up in Toronto

This city’s bid to become the sports capital of the northern climes has been sidelined temporarily by a dispute involving basketball, betting and health care.

Last fall, Toronto seemed well on its way to becoming a full-service destination for fans of professional sports. The Blue Jays had won baseball’s World Series, the Maple Leafs were setting a National Hockey League record for the longest string of wins to open a season and a group of local investors was awarded Canada’s first National Basketball Association franchise.

Now, the nascent NBA team is in jeopardy, caught in a tussle between a league intent on preserving its image and a provincial government that needs every penny of revenue it can collect.

The issue is a sports-betting game that is part of the lottery of the province of Ontario. Called Pro-Line, the game allows people to bet on the outcomes of a selection of professional sports events every weekend. In its first year of operation it has been highly popular: some 44 million tickets were sold.

But the NBA is adamantly opposed to placing a basketball team in a city where betting on its games is permitted. It awarded the Toronto franchise to the investor group last month on the condition that basketball be removed from the sports lottery, but the province has refused to go along. Meetings have produced no compromises, and neither side is budging.

“Maybe if we had understood how important they (Ontario officials) felt this was, we would have chosen not to start the process,” said NBA deputy commissioner Russ Granik. “We didn’t realize it would be this difficult a problem. I have a hard time being optimistic about the outcome at this point.”

From the standpoint of the provincial government, the issue is one of priorities. Three-quarters of the profits from Ontario’s various lotteries go to support the hospitals of Ontario’s government-provided health system, to the tune of about $400 million last year. Revenue from the basketball portion of the lottery is a tiny fraction of that total, but the province is in a severe budget bind at the moment and, officials say, every dollar is needed.

“This isn’t just something where you can just say, ‘Oh, sure, no problem,’ ” Ontario Premier Bob Rae said last month. “It’s worth a lot of money to the hospitals and community agencies and people supported by the lotteries.”

Ontario officials negotiating with the franchise group and the NBA have said the province could lose even more than the $5 million or so that basketball produces in betting profits each year. Hockey, baseball and football may also demand to be excluded from the lottery if basketball is exempted, they say, costing the province as much as $56 million by 1995, the year the new team is to start playing.

“We couldn’t walk away from that kind of money,” said Larry Bertuzzi, a lawyer who is the chief negotiator for Ontario. “We are trying for a satisfactory resolution, but none has shown itself.” The province was not consulted about the sports-lottery issue until after the franchise was awarded, he said.

The dispute has raised familiar complaints here that the Americans are trying to make the Canadians play by their rules. Granik of the NBA pointed out that no state with an NBA team allows sports gambling. Oregon dropped sports from its state lottery after an NBA lawsuit, and a recent federal law prohibits any state from setting up a sports-gambling enterprise.

“We want people to go to a Toronto game rooting for the home team. We are not jai alai. We are not saying, ‘Watch the performance and lay a bet one way or the other,’ ” Granik said.

If the dispute can be settled, Toronto has the potential to provide large basketball audiences. The Blue Jays had the highest attendance in major league baseball annually until Denver’s new team surpassed them this year, and the Maple Leafs sell 95 percent of their home seats on a regular basis. Before his retirement from basketball, Michael Jordan ranked consistently as the most popular athlete in Canada.