Sports Betting: A Dark Industry Moves Into Light

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Mobsters, crooked athletes, gambling addicts, and all-around unsavory characters. It sounds like the narrative of an old Hollywood script, but they all played roles in some of the most notorious cases of illegal gambling in American sports.

Last week the Supreme Court struck down a 26-year old law that kept sports betting illegal outside Nevada. Wagering on pro and amateur sports is now permitted in states that have enacted lawful gambling.

The ruling brings out from the underground an industry that has been estimated by some officials to be as large as $400 billion a year. Though, that figure is most likely exaggerated.

As a real-world example, sports betting in the UK where the recreation is legal was UKP 10 billion in 2017. Adjusted for an American population that is 5x greater and a sports market that is deeper and broader, illicit betting in the U.S. is probably closer to a $70-$100 billion handle.

Still, the numbers cannot be ignored and they easily dwarf the $5 billion legitimate business that Las Vegas churns out annually in sports gambling.

Besides the betting public, winners of the recent verdict are state jurisdictions that will benefit from fresh tax rolls, online sports books, brick & mortar gambling parlors, and the leagues themselves who will demand “integrity” fees.

Sports integrity is the right question to explore. Will a regulated gambling industry stamp out the nefarious elements around sports?

Historically, the insiders who were most vulnerable to game fixing activities were unpaid and underpaid athletes, and compulsive gamblers who were professionally connected to sports. They were typically greased by shady outsiders who rounded up money and made the odds.

In the Black Sox scandal, the most infamous case of sports corruption in American history, eight members of the Chicago White Sox team were accused of intentionally losing the 1919 World Series to the Cincinnati Reds.

Disgruntled with meager salaries and resentful of team owner Charles Comiskey for his miserly ways, the players agreed to take money in exchange for throwing off the Series.

Though eventually found not guilty by the courts, all were subsequently banned from baseball, including star slugger “Shoeless Joe” Jackson who today still holds the third highest career batting average in MLB at .356.

On the amateur level, the biggest scandal to ever hit college athletics came to a head in 1951 when basketball players from seven different schools were bribed to shave off points in games.

Among those teams were the CCNY Beavers (City College New York), the Cinderella squad that in 1950 won both the NCAA and NIT championships.

Since student players are potential targets for financial inducements, the NCAA, which fought against legalizing sports betting, is a loser in the Supreme Court decision.

The other group of insiders were the inveterate gamblers such as 3x World Series champion Pete Rose who permanently lost his bid for the Hall of Fame due to his betting activities, which included gambling on his own team as a player and manager.

In 2008, long-time NBA referee Tim Donaghy was sentenced to prison for betting on games that he officiated and where he made calls that affected point spreads.

Strong licensing measures, technological safeguards, and mandatory monitoring of unusual betting-line patterns should help preserve the integrity of athletics in the new world of legalized sports gambling.

Nevertheless, just like the stock market, or any industry where large amounts of money change hands, we should not expect a future free of the occasional scam and scandal.  As we all know too well, history never fails to repeat itself.

Other articles enjoyed  College Hoops & A New York Legacy, The Greatest Sports Deal Ever, Last Bare-Knuckle Champion, For Every Winning Streak, A Losing One

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40 years ago

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