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Good Thursday Morning. Here’s the rundown of this week’s Sports Business Playbook:

• 📰 This Week’s Topic: The Dallas Mavericks have been bought by Las Vegas casino and resort mogul Miriam Adelson, but prior owner Mark Cuban is staying on as a minority owner and is retaining control of the basketball operations. This is one of the most unique franchise sale deal structures in modern sports history, and it points to the larger visions both the Adelson’s and Cuban have for Texas: legalized gambling.

• 🍸️ Impress Your Friends at Cocktail Party: Want to show off your sports knowledge in a public setting but don’t have time to read the deep dive? Hit the “Impress Your Friends at Cocktail Party” section at the bottom for a CliffsNotes of this week’s topic

• 🤯 “Whoa of the Week”: “The Game” Delivers for Fox.

• 💪 Weekly Reminders that Sports are Awesome: An emotional senior day tribute, and a video that I have watched no less than 10 ti〽️es.

Hey team,

A surprising move in the sports ownership world this week, as longtime Dallas Mavericks owner (and Shark Tank fan favorite) Mark Cuban agreed to sell a majority stake in the team at a discounted valuation of $3.5 billion to Miriam Adelson, matriarch of the Adelson casino and resort empire out of Las Vegas and the 35th richest person in the world.

Why was it unexpected?

The move seemingly came out of nowhere, with initial news breaking early yesterday that Adelson was selling ~$2 billion worth of her Las Vegas Sands Corp. holdings to acquire a professional sports franchise. With the Adelson family’s deep ties to Las Vegas, there was initial speculation on something there, particularly given the city’s exploding sports scene.

It was then reported shortly thereafter that the mystery team was the Mavericks.

This raised eyebrows because Mark Cuban has owned the club for 20+ years and is one of the most well known, dedicated and outspoken owners in the NBA.

Selling the club at a significant discount — the Mavericks were valued at $4.5 billion in 2023, 7th highest in the NBA, according to Forbes — is pretty startling given the trajectory of the league and of overall economic expectations for North American sports franchises.

The scandal-plagued Suns sold for $4 billion last year, the Ottawa Senators, a small-market NHL team, got $1 billion, and even the worst owner in sports was able to fetch $6 billion for his NFL club this year.

The initial reasoning for why this may have happened: even though Cuban is selling his majority share, he’s taking a good chunk of money off the table (he bought the club for $285 million in 2000) while keeping a minority stake in the club he loves and retaining full control over the basketball operations.

Having this much control post-sale is almost unheard of, but I don’t think it’s the full story.

What are the the motivations of these two parties?

A number of the Twitter thread bros are taking a break from their “here are the 99 things I learned from Charlie Munger — RIP to the 🐐” posts this week to speculate that this sale plus his decision to leave Shark Tank means that the Cubes is setting up for a presidential run in 2024 — #letsbuild.

I don’t know about Cuban’s presidential aspirations, but I believe there is a much different reason that’s brought these two unlikely parties together on what is probably the most unique team sale in modern sports history: the Dallas Mavericks are going to be the Trojan horse for getting casino gambling and sports betting legalized in Texas.

The Sands of Time

First, who is Miriam Adelson? The Athletic has a detailed write-up on her, but here are the key points.

Adelson is the largest shareholder in Las Vegas Sands Corp., the resort and casino empire which was formerly owned and run by her late husband, Sheldon Adelson.

Sheldon Adelson was a casino tycoon who built the Sands Casino in Las Vegas and then went on to open several other casino resorts in Singapore and Macao, creating the sprawling global empire that it is today. For reference, the company reported $2.8 billion in revenue in Q3 of this year.

When Sheldon passed away in 2021, Miriam took majority control of the Sands. This assumed control has skyrocketed Miriam’s worth to becoming the fifth-richest woman in the world, with an estimated net worth of $32.3 billion.

With the expectation that the Mavs deal gets approved by the NBA, she becomes the second richest owner in the league behind the Clippers’ Steve Ballmer, and she has plenty of dry powder left to deploy. Her $2 billion holdings sale to finance this deal only equated to 10% of her overall stake in Sands Holdings. This war chest plus the need for female representation should make the approval process relatively painless.

So, an incredibly wealthy, powerful group has now joined forces with one of the most progressive owners in the league who is still heavily involved. Here’s what they’re most likely planning.

On Gambling, its the Lonely Star State

Despite the surge in legalization of gambling in other states around the country, most forms of gambling, including casino and sports betting, are illegal in Texas. And frankly, there has never been a serious chance of it becoming legalized.

Legalizing casino gambling requires an amendment to the Texas Constitution, which needs:

1. Two-thirds approval in both chambers of the state Legislature

2. Should the approval in #1 happen, it would then be put before voters, who would need to vote to ratify it.

Previous efforts to even get past #1 have failed pretty miserably, and much of the Republican-controlled legislature has taken a stand against these resolutions on moral grounds. The largest roadblock has been Lieutenant Governor Dan Patrick, who is staunchly opposed to gambling and is in power until 2026.

This does not mean that the state has not attracted interest, though.

Given its central location, size — 2nd largest state in the country at 30 million people — and wealth in its metropolitan areas, Texas has the potential to be one of, if not, the biggest gambling markets in the US.

Some estimates suggest that nearly $8 billion a year is bet illegally in the state, and Texas is watching a ton of additional money flow to border states — i.e., Louisiana, Oklahoma — that have legalized gambling.

This untapped potential has caught the eye of many, including the Adelson family.

In 2020, Sheldon Adelson had become interested in getting casino gambling legalized in Texas, and he set up a large lobbying operation in the state to try to make annual progress on this initiative. In 2023 alone, 60+ lobbyists spent nearly $6 million on behalf of the Sands to legalize commercial casino gaming.

And the Adelson’s can whip some votes. Sheldon and Miriam were/are major Republican donors, having donated over $180 million to Republican campaigns in 2020 according to Forbes, and Miriam has been a generous financial benefactor to Texas Governor Greg Abbott.

Now, Miriam has taken the next step by purchasing the Mavericks.

Given they received a sizable discount and Cuban is staying on and retaining some level of control over the on-court product, it appears the family does not care as much about the club as what it unlocks for them on the casino front.

The franchise will give her:

1. A clear vested interest in Texas

2. Access to additional state resources and legislators

3. An easy foray into ramping up lobbying efforts for the next legislative session in 2025.

It would appear that the Adelson’s and Cuban believe there is daylight for making this initiative a reality, and this plan has been developing for some years.

Here’s why.

Cubes’ Root Idea

The Mavericks have played in the American Airlines Center in downtown Dallas since 2001. The arena is generally okay, but it’s old by today’s arena standards and Cuban has expressed a desire to build a new arena for when the Mavs' current lease runs out in 2031.

His goal is for the arena to be one part of a massive casino and resort complex that would become an entertainment destination in North Texas.

Cuban views the legislation required to make this a reality as less about gambling and more about boosting Texas’ tourism. In an email to Legal Sports Report earlier this year, he stated:

And he’s been pretty blunt about who he wants to build this complex with.

Cuban told the Dallas Morning News last December that “my goal, and we’d partner with Las Vegas Sands, is when we build a new arena it’ll be in the middle of a resort and casino…that’s the mission.”

It’s unclear if the plan all along was for the Adelson’s to buy the Mavericks to kickstart this operation, but it appears evident the two sides have been developing a partnership for some amount of time.

Cuban believes the Adelson’s provide the firepower — both monetary and political capital — to tip the scales in his favor. Should it happen, all parties stand to make a Texas-sized amount of money from this new mega casino resort that also happens to feature the Mavericks.

And for that reason, he’s out.

🍸️ Impress Your Friends at a Cocktail Party

Want to show off your sports knowledge in a public setting but don’t have time to read the deep dive? This section is the CliffsNotes of this week’s topic

• Opener: Las Vegas casino and resort billionaire Miriam Adelson is buying a majority stake in the Dallas Mavericks from longtime owner Mark Cuban.

• Shot: In a relatively unprecedented move, Cuban is keeping a minority stake in the club and retaining control over basketball operations. This deal structure leads me to believe the two groups have ulterior motives: using the Mavericks as a means to get gambling legalized in Texas.

• Chaser: Almost all forms of gambling are illegal in Texas, and the past resolutions to legalize it have failed miserably. The Adelson’s, through their Sands Corporation, have set up a large lobbying operation in the state and are pushing lawmakers on the initiative.

• Chaser: The Adelson’s purchase of the Mavericks, combined with their deep pockets and political connections as major Republican donors, could be the tipping point for Texas on the gambling issue.

• Chaser: Should gambling legalization go through, the Adelson’s and Cuban stand to make billions. Their ideas include a new Mavericks arena that is attached to a casino and resort. If everything goes according to plan, the arena would be in place by the time the Mavericks’ lease with its current arena ends in 2031.

🤯 “Whoa” of the Week

Insane, mind-blowing things constantly happen in the sports business world. Here was my favorite of the past week.

1. “The Game” Delivers

💪 Weekly Reminder that Sports are Awesome

This newsletter is, of course, mostly centered on the business side of sports and the things that happen off the field. That being said, it’s important to remember why we fell in love with sports in the first place, though.

This section is meant to highlight the amazing things that happened in sports this week that serve as that reminder.

1. Washington’s Zion Tupuola-Fetui’s emotional senior day

2. Look away, Ohio fans. We’re a 〽️ichigan newsletter today.

Thanks for reading! Let me know what feedback you have.

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Until next time, sports fans!

-Alex