Sports betting is experiencing a surge across the United States. While countries like the U.K. have long had legalized sports betting, it wasn’t until 2018 that the U.S. Supreme Court allowed states to legalize it. Before this ruling, Nevada was the only state where sports betting was permitted.
The Supreme Court’s decision opened the floodgates, and many states quickly legalized sports gambling, attracted by the potential for increased tax revenue. As of May 2024, 38 states and Washington, D.C., have legalized sports betting, with Americans wagering nearly $120 billion on sports in 2023 alone.
Up until about a decade ago, North American sports leagues were apprehensive about legalizing sports betting, fearing it could damage their credibility due to the history of sports gambling scandals in the U.S. The NCAA and other governing bodies were particularly vocal in their opposition. However, following the Supreme Court’s approval, sports leagues have embraced gambling, partnering with brands like Caesars Entertainment. Despite the implementation of integrity monitors to track inconsistencies, several scandals involving athletes and their associates have emerged since the ruling.
Disgruntled players and pay disputes lead to temptation
The Black Sox Scandal of 1919 was a significant event that led to the creation of the position of commissioner of baseball, first held by Kennesaw Mountain Landis. His most notable action was banning the Chicago White Sox players involved in fixing the 1919 World Series for life.
Early baseball regulations explicitly banned gambling, but the financial temptation was too strong for many players, including those on the 1919 White Sox. The players, unhappy with team owner Charles Comiskey and feeling underpaid, were unable to switch teams due to the reserve clause in their contracts, which gave owners exclusive rights to their players indefinitely.
A group of White Sox players agreed to throw the World Series. They were eventually indicted by a grand jury and went to trial. Although they were acquitted of criminal charges, Landis banned all players connected to the fix, including superstar “Shoeless” Joe Jackson, who admitted taking money but maintained his innocence regarding game-fixing.
This was one of several attempts to fix baseball games in the early 20th century as the sport’s popularity grew, with various individuals associated with baseball seeking to profit.
Addiction isn’t limited to substances
While athlete salaries have increased significantly in recent decades, this has not protected players and others involved in sports from gambling addiction.
Athletes are not prohibited from gambling on other sports or at casinos. Many have wagered millions, with some accumulating massive debts due to addiction. These debts can lead to desperate actions that risk their careers. Baseball legend Pete Rose, an admitted compulsive gambler, remains excluded from the Hall of Fame for betting on baseball games.
The most significant modern gambling scandal involved NBA referee Tim Donaghy in the 2000s. Donaghy admitted to providing information on NBA games, including those he officiated, which allegedly influenced his calls. He served prison time for his actions. This demonstrates that gambling issues can affect not just players but also officials.
Unpaid student-athletes are especially vulnerable
Several major point-shaving scandals have occurred in college basketball, notably at City College of New York in the 1950s and Boston College in the late 1970s, the latter involving Henry Hill, the subject of the film “Goodfellas.”
The rise of prop bets, which focus on specific outcomes within a game rather than the overall result, has created new vulnerabilities for student-athletes. Influencing a whole team is challenging, but individual players, like point guards or quarterbacks, can be more easily pressured to affect game outcomes.
Today’s unpaid student-athletes face similar financial incentives to cheat as past generations did, but they also encounter new pressures. Gamblers on campus and on social media often harass them, with 1 in 3 student-athletes reporting harassment, including death threats, according to NCAA surveys.
New regulations and oversight measures could help
Sportsbooks have little incentive to address potential violations, making it essential for sports organizations to ensure the integrity of their games.
NCAA President Charlie Baker’s suggestion to ban prop bets is a good start: isolating individual players from gameplay makes it easier to prevent improprieties.
Providing more guidance and differentiated punishments for various violations could also be beneficial. Gambling violations that do not affect competition outcomes should be treated differently from those that do. The NCAA already practices this by giving lighter penalties to student-athletes who wager on other teams and sports.
Offering treatment for gambling addiction could be helpful, and there is some evidence that open discussions about gambling addiction in European soccer have had positive effects.
NBA Commissioner Adam Silver has proposed federal oversight to eliminate the uncertainty of state-by-state regulations. While scandals are likely to continue, gambling commissions like the one in the U.K. can provide a framework for federal licensing and oversight.
The rapid adoption of sports betting by states has led to substantial profits for gambling companies and significant tax revenue. However, it also poses a risk to the integrity of sports. Policymakers should consider historical lessons when addressing these issues.
