An Ode to Sports Betting

The meteoric rise of legalized gambling in professional sports

Author

Michael Sullivan
March 30, 2024

Good Morning,

Neglectful [ne·glect·ful]

adjective

“not giving proper care or attention to someone or something.”

(Please excuse my absence)

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The March 30th Weekly Three:

  • The economic fallout after a 100k ton cargo ship accidentally collapsed the Francis Scott Key Bridge in Baltimore could be quite large. Baltimore handled nearly $80 billion worth of international goods in 2023 alone.

  • A New York State appeals court ruled that Donald Trump and his co-defendants in the New York civil fraud case have “10 days to post a $175 million bond, down from the $464 million judgment that was originally due Monday.” Notably, Trump still has not posted bond to appeal the fine.

  • Republican Virginia Gov. Glenn Youngkin vetoed a bill that would have allowed the recreational retail sale of marijuana to begin next year (reminder to vote in November).

An Ode to Sports Betting

These days, when fans tune into the latest NBA game, they are greeted with a subtle, but quickly growing new element to the broadcast.

Betting lines.

What once was a large, but almost entirely underground operation, legal sports betting has hit the main stage the last several years, and hit it in a big way. The major sportsbooks like Fanduel and Draftkings regularly bombard viewers with advertisements, all part of their monster $400-600 million marketing budgets. 

Hell, even ESPN launched a sportsbook app, called ESPN Bet last year.

Finally legalized, sleek and sexy sports betting has been having its moment in the sun, yet its potential downsides are quickly becoming less hypothetical.

On March 25th this week, Toronto Raptors center Jontay Porter was pulled out of the lineup as it had been announced he was the subject of an NBA investigation into irregularities on prop betting involving him.

You have probably never heard of this player. Porter is a minimum contract player, but for some reason he was the source of tens of thousands of dollars worth of prop betting on his game stats.

Over the course of a handful of games, high pay off “under” prop bets routinely hit in favor of several high-betting accounts. In one central instance in a game against the Clippers, multiple betting accounts attempted to bet large amounts, upwards of $10K and $20K, on the little known Porter.

The speculation here of course is that Porter himself, perhaps working in cahoots with close friends, was placing bets against his own stats, meaning he was rigging the system in is favor.

If that truly is the case, that would be the stupidest, and definitely the easiest way to get caught. Its also the NBA and gambling regulators worst nightmare come true. But the situation shines a spotlight on the potential perverse incentives entrenched legal sports gambling can have. I imagine this is just the first in a tide of investigations that will crop up in the coming years.

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Fully realized sports gambling being this visible, this fast, did not happen over night. In fact, the story (as reported on in the New York Times in 2022) is Wolf of Wall Street levels of depraved. 

After the Supreme Court in 2018 overturned a longstanding federal sports gambling law that prohibited the practice (with the exception of Nevada), an army of lobbyists, former regulators, and politicians jumped into action, drafting new state bills that opened the flood gates on sports gambling. These expensive state and federal lobbying campaigns came complete with a dazzling array of gifts to state regulators, ranging from top-shelf champagne bottles, to thousand dollar cigars, to god knows what else.

It has been demonstrably effective.

As an example, Washington state, once one of the most highly regulated states for sports gambling, legalized the practice at tribal casinos in 2021. And then quickly expanded legal sports betting to non-tribal casinos in the following legislative session.

In total, 31 states in five years have opened the door to expanded legal sports gambling. That is fast. If this lobbying machine of regulatory and political change was a race horse, I’d wager a lot of money on its continued success.

I have no problem with people gambling. People can spend their money how and where they want, even to their own detriment. But at the same time, seeing the alarming spread of advertisement and funding efforts to put gambling front-and-center in competitive sports, with such intentionality, kinda gives me the ick?

How much further sports betting digs in remains to be seen, but some organizations are attempting set guardrails now.

On March 29th, the NCAA began efforts to curb prop betting in college sports. NCAA president Charlie Baker issued a statement Wednesday asking that states with legalized sports gambling pass laws prohibiting the availability of individual prop bets for college athletic events:

“Sports betting issues are on the rise across the country with prop bets continuing to threaten the integrity of competition and leading to student-athletes and professional athletes getting harassed,” Baker said in a statement. “The NCAA has been working with states to deal with these threats and many are responding by banning college prop bets.