Is the gambling explosion ruining sports?

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0:30Whenever I'm watching sports, whether it's a regular season NBA matchup or the World Series, there's one thing that is just everywhere. Gambling. This MLB season, bet live with FanDuel and make the game come alive. With live betting for the first down to the final whistle. DraftKings, you make the playoffs even more exciting. And gambling on sports has never been easier. Using apps like DraftKings or FanDuel with just a few taps, you can bet on almost any aspect of a game. The world of legal sports betting has been exploding over the last few years. But along with it, so have fears that this could lead to cheating or worse.

1:15Conspiracy and rigging pitches. Prosecutors said in the indictment that Class A and Ortiz threw specific pitches for balls. They're accused of participating in a gambling scheme centered on what we call micro bets. And those are bets within tiny moments within a game. Two Major League Baseball players were in court last week after being indicted in the league's most significant gambling scandal in decades. A Senate committee has now launched a probe into betting in Major League Baseball. All this comes on the heels of another scandal, this one rocking the NBA. Last month, the FBI arrested a player and a head coach.

1:57This was part of an investigation into a sports betting operation and rigged poker scheme run by the mob. Now, the multi-billion dollar sports betting industry is under renewed scrutiny. From the newsroom of The Washington Post, this is Post Reports. I'm Elahey Izadi. It's Tuesday, November 17th. Today, the future of legal sports gambling. I speak to Post sports reporter Rick Mace, who first explains why I can't watch a game without hearing an ad for sports betting, but also whether these scandals are threatening the integrity of the games we love.

2:47Hi, Rick. How are you today? Good. How are you doing? I'm doing good, and I'm glad you're here to talk to me about this because, you know, I mentioned a few of these major stories that really upended the world of sports betting. But before we get into these cases, which are really eye-popping, I want to start with the basics. To just get a clear picture of what sports betting is like today, how does it generally work for people placing bets? Well, it's changed, you know, in the past decade or so. If you think back to, you know, maybe the way our parents or grandparents had to gamble, They would have an illegal bookie, and they might use a payphone at the bar down by the gas station and call up.

3:24Well, nowadays, everyone's got a sports book in their pocket, essentially. And that has really changed the game because you can sit on your couch, you can sit, you know, on a bar stool, and you can gamble on any sporting event you want anywhere in the world. Can you walk me through an example? Like, Rick, have you ever placed a bet like that? I have been known to have a vice or two. We'll allow it. We'll allow it. This is legal behavior, just so we know. Yeah, it's simple. So if you're watching a game or not watching the game, but you want to feel a different level of engagement in the game, you might open up your phone, pull up that specific game, and you would see just a menu of options on things you can gamble on.

3:56So let's say you're watching Thursday night football. You can bet on the very next play. You can bet on the score at the end of the half, the score at the end of the game. You can bet on who's going to score a touchdown, anything. In a single football game, there is 500 to 800 different options of things you can bet on. So you're not just betting on who's going to win, who's going to lose, and maybe by how much. You're betting on the literally play-by-play small things that happen within a game. You can play spats. Exactly. And that's really one of the biggest changes that online sports betting has allowed is that everything is possible.

4:27Every stat, every play, every number in a game is an opportunity to make money or probably lose some money. And if I understand it, these types of bets are called prop bets, right? Yeah. And if you think back to, you know, when you were younger and you'd hear about the Super Bowl and they'd have all these kind of crazy bet options. And a lot of it was just to kind of bring publicity to a Las Vegas sports book. What color is the Gatorade going to be? What's the coin toss going to be? How long is the national anthem? Well, those are real bets now. And so these are prop bets that maybe have nothing to do with the outcome of a game, nothing to do with who wins or loses the game.

4:59But it's a known proposition. And that's why people can bet on literally everything that takes place. Wait, is that what it's short for? Proposition? Prop bet? Oh, I had no idea. What did you think it was short for? I don't know. Prop bet. But, like, I guess I never really thought about it. I just thought that's what it was called. And you're mentioning, like, everyone has these sports books in their pockets on their phone. So it's like, are they apps and websites? And then that's how people are placing their bets, basically. Exactly. I mean, everyone with a cell phone has probably played games at some point, whether it's Solitaire or Tetris.

5:28And this is just the gamification of sports where everyone is in on the action. So, I mean, if I just open up my phone, I can show you. All right, let's do it. Let's open up your—let's get personal here. So this is just for entertainment purposes only and for research purposes. But you can see I have a DraftKings. I have a FanDuel. I have a Caesars Sportsbook. I have MGM. And so you would just open up one of these. And, you know, you've got to register for an account. You have to reach certain guidelines. You've got to be 18 years or older. You've got to be, you know, a citizen of the United States and present in whatever state you say you're in.

5:59And you can just see there's every sport possible here. Oh, my gosh. Read some of those. Let's see. So this Thursday night is the Buffalo Bills against the Houston Texans. And you can kind of see up here. All right, let me see. But up at the top, you can see there's passing options where you can bet on everything the quarterback does. Rushing options, receiving options, defense options, and just everything under the sun. And all the names are there. Wow. Okay, Rick, I will admit I haven't really gambled on sports. I think the closest I ever get to is March Madness and participating in a pool where I'm picking and choosing which teams I think will advance.

6:33And I put a little money in the pot. And just even that makes the experience of watching the basketball tournament way more exciting because it gets me invested in games otherwise I wouldn't care about. So as I'm looking at this app and all of the small bets you can place, I can only imagine how much more captivating this sort of platform and this sort of gambling can make a game. But I worry about, like, the addictive aspect of it. Well, I think everyone should be worried about the addictive aspect of it because I think that's what's becoming front and center in the conversation right now is, you know, the first bit, oh, this is fun.

7:11Another way to engage with sports. Another way to watch my favorite teams, favorite players. Maybe my team's terrible. It's another way to stay engaged until the final out or the final play of the game. But we're seeing that more and more people are struggling with addiction. They are betting money they don't have. They are losing things that they can't afford to lose, and they're struggling with ways out of it. And there's more and more people talking about gambling addiction as a public health issue. And, you know, not just a form of entertainment, but actually something that's on par with alcohol abuse or substance abuse and something that needs active treatment and research and study.

7:42And so those conversations are picking up almost parallel to this rise of scandal and concern that that's kind of growing. And are any of these companies like required to offer any sort of disclaimer or anything when they advertise their services around addiction? Addiction? Yeah. And so the way it works is states regulate gambling in each state, and they make agreements with different operators. Say, yes, you can come in here and you can offer your sportsbook. And as part of that, you need to make sure you account for addiction, for gambling problems. And so they usually put money into something, whether it's a 1-800 hotline or some kind of therapy services.

8:17But you'll always hear disclaimers or see them on commercials. If you have a problem or you need some help, here's where to call you. Here's where to go. You know, and as I mentioned earlier, I think most sports viewers, even if you're just casually tuning in, have noticed just this bombardment of advertisements for these sports betting platforms. How big is this industry? So the American Gaming Association put out this annual report. And last year alone,$150 billion was wagered on sports games. Wow. And of that, you know, some 10 to 15 percent is usually just straight profit for the sports books.

8:48So the revenue is almost$14 billion last year for the sports books. Right now, it's growing at almost like a 20 % clip from year to year. 20 %? Yeah, so it's just getting more and more popular and the more and more available it is. So sports gambling is legal in 38 states plus Washington, D.C., Puerto Rico, a couple other places. Rick, what led to the industry exploding like this? Yeah, I mean, I'd say for years and years and years, sports gambling was frowned upon. Society thought it was something that was done in the dark alleys and done among, you know, people that had vices and that were degenerates.

9:20That all changed. It has been destigmatized, and it all goes back to the Supreme Court. The Supreme Court. So what did the court do? For years and years and years, sports gambling was only legal in a handful of places, mostly Las Vegas. And in 2018, the Supreme Court basically took the federal law and overturned it and said sports gambling no longer illegal. States, do as you please. If you want to have sports gambling in your state, that's your business. You regulate it. Do whatever you want. And in turn, the states said, hey, we can make money here. We're going to legalize it. So then that sort of opened the floodgates and created this industry that feels like, to me, came up overnight.

9:56Yeah, the floodgates are right because the sportsbooks came flooding in. Everyone wanted a piece of the action because they knew it'd be a billion and billion billion dollar industry. And they were right. And so at the time when the court struck down this rule, where did the pro leagues stand on this? Because they're the ones who are putting out all the games that people would be betting on. Were they for it? No, no. I mean, for years, all the pro leagues universally would clutch their pearls over the thought of gambling. And this goes back decades and decades. If you think back to maybe the biggest scandal in sports history is the 1919 Black Sox scandal where the Chicago White Sox were found to have thrown World Series games.

10:33And ever since then, gambling was thought of, you know, just the ultimate corrupt thing where the integrity of games were at stake. And, you know, the whole reason people buy tickets and tune in is because they want to see honest competition. And the thought was gambling is the biggest threat to that possible. And so even when the Supreme Court was weighing things, the leagues officially were saying, no, we're anti-gambling. But the writing was on the wall. Everyone knew the law was going to fall, if not that day, then sooner or later. And the leagues started preparing. They started lining up pieces.

11:02The NBA was kind of at the forefront. They were thinking, you know, this is going to fall. We're going to at least figure out a way to get a piece of the action. And piece of the action I feel like they must be getting, right? They did. It was a huge revenue stream for the leagues, and that's why they're still wrestling with what to do because, you know, the horse is out of the barn. They're cashing their checks. They're getting paid from all the sports gambling operations. They don't want to lose that revenue, but they also need to rein it in somehow.

11:28After the break, Rick explains the high-profile arrests that have hit professional baseball and basketball and whether they'll spark changes in the sports gambling industry. We'll be right back.

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12:17So Rick, I now want to go back to these recent arrests that rocked the world of sports betting and really opened, opens the window into this world for us. And I first want to start with the one involving the NBA. So can you tell me about one of these arrests involving a current NBA player? Yeah, so the FBI held a press conference last month where they announced a couple different investigations. One of them was focused on sports betting. And what they said was players and characters basically supplying information to bettors. And the bettors would then use that information and place their bets accordingly.

12:51And look, let's not, you know, mince words. This is the insider trading saga for the NBA. That's what this is. And that's FBI Director Cash Patel. That's why we are going to take heat. But as the evidence comes out, as the indictments are unsealed, you will see the extensive work these men and women put in. And so among those arrested was a guy named Terry Rozier, and he's a former first-round draft pick currently playing for the Miami Heat. And what the government basically alleges is that he told friends that they were going to lay down some bets, said, hey, I'm going to leave this game early.

13:22Go make your bets accordingly. So let's say Terry normally averaged 10 points a game. He was saying, hey, I'm not going to get 10 tonight because I'm leaving this game in the first quarter. And so they would allegedly go and place their bets and cash thousands and thousands of dollars. And the government says Terry Rozier would then be cut in on that somehow in the back end. And what has Rozier said about this? Terry Rozier has maintained his innocence from day one. He has said he had a legit reason to leave the certain game in question, said that he was battling illness or injury, said he's never been involved with sports gambling in any way possible.

13:51And so who else was implicated in this operation? So there's another big name that everyone focused on. His name is Chauncey Billups. He's the head coach of the Portland Trailblazers, Hall of Fame basketball career himself. Big deal. Very big deal. And he was not charged in this case, but there was in the indictment laid out an incident where as head coach of the Trailblazers, he gave some information and said, hey, we are tanking. We are losing games on purpose. I'm going to sit all of my star players. And so this information got to the betters, and the betters were like, hey, we are going all in on the other team tonight because we know the Trailblazers are going to do terrible.

14:24And so while Billups may or may not have known how that information was going to get used, the government says that, you know, he knowingly gave information that better is used to cash in. And what has he said about that allegation? He has maintained his innocence. He has said that, you know, I've never had any problems with sports gambling. I have nothing to do with any of this. And he says he's in for the long fight. He was also, though, arrested as part of a whole other, it seems like to me, whole other allegation and operation involving a poker game run by the mob? Can you explain that, Red?

14:56It's a little confusing because the FBI announced two cases in one press conference, and they're actually different. They both have really cute names, like straight out of Pulp Fiction novels. So the one we first talked about was called Nothing But Bet. Oh, it's so cute. And then the second one that was focused on poker games is called Operation Royal Fluff. I'm sorry. I love it. Let me try to, so that one actually has nothing to do with sports betting. It is focused on rigged poker games, but it did involve athletes. And Chauncey Billups is alleged to have been one of these athletes. What the government says is that these were mafia-run games, and people like Chauncey Billups were used to lure other people to the poker table.

15:33And these people were people with deep pockets, a lot of money, and they also had no chance of winning because the games were rigged. They said that the shuffling deck was rigged. They said that the table had some kind of X-ray equipment, like something out of a James Bond movie. And so there was communication all around the table, and they were just milking these big whales out of all their money. And these face cards, these celebrities, and Chauncey Billups, again alleged to be one, would then get some kind of cut of these proceeds on the back end. And on this case where he was arrested, I would imagine he also maintains that he is innocent.

16:06He, yes, he says he's going to fight this and clear his name. And it's worth pointing out at the time of this alleged poker game, he wasn't even an NBA coach then. He was working for ESPN as a sports commentator. He had nothing officially to do with the NBA or any NBA teams. Are either of these individuals, both the Miami Heat player and the Trailblazers coach, are they still in their jobs? They're both on leave, you know, while these cases kind of proceed through the court system. So what has the league, the NBA, said about these arrests and the scandal? Has this triggered any sort of soul searching?

16:38Do they claim to have known anything about these allegations and these investigations? I'd say sports gambling in general has been some just continuous cycle of soul searching. And certainly the past several weeks has sparked a wave like we haven't really seen before. So the NBA has acknowledged like something needs to be done. We've got to reconsider the way this is all working. And there's talk of, you know, do we need regulation? Do we need to tamp down on some of these rules? Now, nothing, the NBA hasn't made any big announcements about any changes. But they are saying, hey, we need to reexamine this and figure out what's the best path forward for everybody.

17:11Well, that's fascinating to me because initially they were all kind of like against the floodgates opening. And then, as you said, you know, they saw the writing on the wall. All right, how are we going to make money off of this? Or we need to figure out a way to make money off of this. But it seems like now the two things are in conflict with each other. And the cynic would say they're now trying to figure out how can we keep making money while maintaining the integrity of our games, which they would say they've been doing from day one. But, you know, with every problem that arises, every arrest that arises, they realize they got to get a handle on this thing.

17:37because once you lose the confidence of the customer, of the sports fan, you know, your whole business is undermined. Yeah, because it's like as a fan, if you're watching a game and you can't trust whether what you're seeing is the legit human drama that sports promises you. Yeah, then you might as well be watching WWE or Law & Order. Yeah, which has its place, but is not what people are tuning into sports for. No, that's why we watch sports because we believe it's true and honest competition and we're not certain how it's going to happen, and that's why we watch to see how it unfolds. And so I want to now turn to this other scandal that is more recent and emerging, and this involves two MLB pitchers for the Cleveland Guardians.

18:14Rick, just quickly, who are they and what have they been accused of doing? Yeah, so there are two pitchers for the Guardians, Emmanuel Classe and Luis Ortiz, and they both have been under investigation for several months. So neither is accused of actually throwing games or affecting the result of a game. Meaning like purposefully losing a game or anything like that? It actually goes down to a single pitch, and that's often the first pitch of the game or the first pitch of, you know, an inning. And you think about it, there's hundreds of pitches in a baseball game. Any single one could be totally inconsequential.

18:43So these players are alleged to have gone on the mound and knowingly thrown a ball. And so bettors would then, if bettors had this information, they would bet thousands of dollars that, hey, the first pitch of this inning is going to be a ball. And what have they, both of these players, said about these? They've maintained their innocence. They were both in court last week in New York and both pleaded not guilty. You know, Rick, you describing the allegations at play here and the scandals, it does seem to really center on prop betting. Like if there wasn't the ability to make these bets on these minor moments in a game, then, you know, like that is what is allowed this cloud of suspicion, these cases to move forward.

19:24What do these betting companies, these sports betting companies say about these particular controversies or just the heightened scrutiny that their business model is under? Yeah, it's a tough one. Now, the sports betting companies, they don't open their books. They don't tell us what percentage of their bets involve prop bets or parlay bets. But we do know that it's a good chunk. And we do know that's how people are currently enjoying, you know, betting on games. And so I think the leagues are wrestling with how do we still give our fans this option, which they clearly enjoy. We don't want to take it away, but I think they do want to disincentivize it a little bit, make it something that's policed a little bit better.

19:59So the Major League Baseball announced last week that it reached agreements with its sportsbook partners to limit the amount of money you can place on some of these bets to$200. So it makes it a little bit less lucrative, makes it maybe a little bit harder for someone to entice a player to throw a game or throw a pitch or throw an inning. And I think we're going to see these kind of incremental measures across all sports because, you know, that's really where the NFL or major league baseball or NBA can really kind of clamp down a little bit and protect the result of their game. Also feel like their players aren't incentivized to do something inconsequential to help a better.

20:31Well, one thing I'm curious about, Rick, is, you know, obviously the explosion of legalized sports betting, as we've been talking about, could possibly have detrimental effects to sports. But is there any argument to be made that this system of legalized sports betting, you know, through these apps, that this is better than this system of underground illegal gambling that existed before? Yeah, and it's definitely worth pointing out that all these leagues also employ independent third-party kind of auditors, and that's who monitors the betting activity. And they'll be quick to point out that whether it's the Guardians, the NBA, cases involving college athletes, they weren't caught by police or FBI.

21:14They were caught by the leagues themselves and their independent agencies that are monitoring these things. So they say that legalized gambling puts it all out in the open and it means you can track betting activity. And then you can see the unusual betting activity and say like, wait a second. Why are thousands of dollars suddenly being bet on this random first pitch of a Cleveland Guardians game in June? That makes no sense. And that's when they can then take that information and do further investigation to see the root cause of it. So none of that would exist, they say, if they didn't have money going towards all these monitoring services.

21:44Maybe that's true. I mean, it certainly is true, but it's hard to say how much of this stuff exists only because there's so many gambling options and only because there's so much money out there in the world right now. And what about lawmakers? Because as we said, there was a law that was in place for a while that was then struck down. Are there any moves for lawmakers to investigate these or to potentially pass a new law? It's interesting because ever since the Supreme Court in 2018 overturned the law, we've kind of been on the lookout to see if there were any lawmakers that would step forward and say like, okay, we need a new framework of laws.