The sporting world in the United States is about to change and become something unrecognisable. Monday’s decision from the U.S. Supreme Court to overturn the Professional and Amateur Sports Protection Act (PASPA) legislation that has, for decades, outlawed sports betting in the U.S. is a very big deal.
And as is only natural when it comes to betting, it will create some losers. Though reactionaries will paint sports gambling as a matter solely of vice and victims, the experience from other parts of the world where betting is commonplace suggests this simplistic view is misguided. For a start, just because something is illegal does not stop it from happening.
The fact of the matter is people have been betting for as long as individuals and teams have contested sport. Even in the U.S., beyond Las Vegas or the casinos and racetracks of New Jersey and Delaware, there has been a booming market for illicit betting. In 2014, National Basketball Association commissioner Adam Silver wrote in the New York Times: “There is no solid data on the volume of illegal sports betting activity in the U.S. but some estimate that nearly $400 billion is illegally wagered on sports each year.”
So if PASPA has failed to save people from themselves, what has it done to protect professional and amateur sports from the malicious intentions of manipulators? In other words, should the U.S. be worried about match-fixing?
This question has long been a tenet of those in favour of upholding PASPA. When the state of Delaware motioned to overturn it in 2009, the National Football League stood in PASPA’s defense. The NFL’s vice president for communications, Brian McCarthy, said: “We don’t want people second-guessing why a player would miss a field goal late in the game.”
McCarthy was expressing a concern that sports betting would lead to corrupted results. He was right — it does. Where he was wrong, however, is to think that match-fixing happens only when sports betting is legal.
In 2011, I sat through every day of a trial in the UK criminal courts involving three Pakistan international cricketers who had been part of a conspiracy to bowl no-balls in a Test match, the highest form of their sport, in return for taking bribes. I learned a lot about the machinations of match-fixers, but I also learned about the wider criminal operations their betting activities help fund. The point is simple: Much of the trillion dollars at stake in the annual global gambling market derives from countries in which sports betting has been illegal — India, China and the United States. This, in turn, has driven sports betting into the hands of organized criminals.
For them, the incentive to fix sporting results is strong. There can be few more profitable enterprises than betting on a result you can guarantee will happen. In turn, this has placed sport — one of the fastest-growing commercial sectors in the western world — in the crosshairs of organized crime.
The European Gaming and Betting Association, an industry lobby group, has reported its belief that of all non-horserace betting in Asia’s illegal gambling market, soccer accounts for between 70 percent and 85 percent of turnover. This makes it an obvious target for the fixers. People such as Wilson Raj Perumal, a self-confessed global match-fixer who operated from premises near Wembley Stadium, the spiritual home of English soccer, have become notorious for their efforts to subvert sport. But people like Perumal find their work harder in an environment in which sport gambling is legalised and regulated than when conducted by a network of opaque, underground-betting operators.
There are a number of reasons for this. First, if the money is made legitimately, then governments, sports authorities and franchises are able to take their share through taxes and commercial operations. They are naturally incentivized to uphold the integrity of their sports through education and protection programs.
Sportradar, a company founded by the German former bookmaker Carsten Koerl, runs a hugely sophisticated monitoring service that verifies sports results for their integrity. It holds a raft of agreements with sports governing bodies to warn them of suspicious betting patterns that might suggest a predetermined outcome. It will be doing so for FIFA at this summer’s World Cup in Russia, too, but it can do this only because betting volumes in a regulated market are transparent, which makes it easy to spot unexpected spikes in volume. In an illegal market, there is no such visibility.
Koerl describes the SCOTUS decision as taking sports betting “out of the shadows and into the light,” and he is right. Koerl’s deputy president at Sportradar, Laila Mintas, anticipates it will bring huge commercial benefits to U.S. sports.
“On average, [bookmakers] spend over 25 percent of their total revenues on marketing,” said Mintas. “[They] will be the next big driver of growth in sports sponsorship.”
That has certainly been the case in the U.K. In 2017-18, the principal sponsors of nine out of 20 Premier League clubs were gambling businesses. Their sponsorship agreements often permit them exclusive access to club stadiums, where they can offer bets to match-going fans. To British visitors, the absence of betting booths at U.S. sports venues has been conspicuous, and it is likely to change eventually.
Then there is the broadcasting angle. Sky and BT Sport, the two major sports broadcasters in the U.K., will pay £9.3m ($12.7m) to the Premier League for each match they broadcast through the 2019-20 to 2021-22 seasons. Almost every single advertisement in the commercial breaks is for one bookmaker or another, suggesting the broadcasters and betting operators know their audience. This carpet bombing of bookies’ commercial messaging is certainly the most troubling aspect of legalized sports betting, particularly in considering the exposure to young people, but the U.S. has a unique opportunity to bring in effective consumer-awareness programming alongside the inevitable commercials.
In any case, the upside for sports is clear. The revenue generated by sports betting directly helps to finance the multimillion-dollar salaries paid to players. As far as sports integrity is concerned, this matters because if a sportsman risks losing millions of dollars in annual wages for fixing a match, with the added risk of his celebrity status being shattered the instant he is uncovered, it becomes commensurately harder to bribe the player. With the enormous salaries on offer to athletes in the major U.S. sports, the integrity risks are lower than in others.
How the corruptibility of athletes is often directly linked to their earnings was recently demonstrated in tennis. In April, the Independent Review of Integrity in Tennis, commissioned by the sport’s four governing bodies, laid bare the extent of the issues it faces. Across 2009, 2010 and 2011, there were 149 betting alerts around tennis matches made to the Tennis Integrity Unit. Across 2015, 2016 and 2017, that number had risen more than five-fold to 767, yet in that later period, between only 1 percent and 4 percent of the alerts related to high-profile Grand Slams with high prize money, and between 9 percent and 11 percent to Tour-level matches. The other 85 percent were at the middle and lowest levels of the game, where players earn markedly less, have substantially less to lose and might be more susceptible to making a corrupt profit.
Sport in the U.S. has frequently fallen victim to such scandals. The college basketball points-shaving incidents at Northwestern, Boston and Tulane stand testament to this though given the volume of sport played, they have been mercifully isolated. However, with the facility of online gambling now set to explode, temptation might get the better of some young sports stars. Even when gambling was less accessible, sports stars have been eaten up before. Pete Rose, aka “Charlie Hustle” — a natural Hall of Famer for his achievements as a player and coach in his sport — is still permanently ineligible to participate in baseball after betting on matches, many involving his own team.
This is something soccer has also experienced. Joey Barton, a one-time England international midfielder and self-confessed gambling addict, was banned for 18 months last year after being found to have bet on 1,260 matches over a 10-year period, in breach of Football Association rules. Upon receiving his punishment, Barton pointed the finger at a “culture of gambling” in English soccer.
“The FA needs to look at its own dependence on the gambling companies, their role in football and in sports broadcasting, rather than just blaming the players who place a bet,” he said.
Clearly, nothing is impervious, but robust monitoring, good governance, sound education and lucrative salaries for athletes are strong buttresses against the greater evil of match-fixing. Even so, none of this is to say the experience for all U.S. sports will be positive from here on in.
One of the advantages soccer has had in attracting vast sums of betting liquidity is its ubiquity. There is a top-level soccer match going on somewhere in the world pretty much every day of the calendar year. If you want to have a soccer bet, you don’t have to look far. For sports such as basketball, with the NBA’s 82 regular-season games, and baseball, with the 162 games played in the Major League Baseball regular season, this should be encouraging. Major League Soccer, with its 34 league games per club each season, holds to a familiar soccer format.
But for the National Football League, which plays its regular season across just 17 weeks, there is no such longevity of narrative. This will likely mean much of the new sponsorship dollars will find homes away from America’s biggest sport. It might also help to explain some of the NFL’s prior resistance to the PASPA change.
Still, in the world of sports betting, one thing has always been for sure: Someone has to lose.