Regulations for prop betting may be coming

Prior to 2017 all the U.S. leagues opposed gambling and their main stated concern was that they believed sports betting would affect the integrity of the games and fan behavior. Match fixing is nothing new and was a concern as far back as the early 1900s. In 1919 the famous Chicago Black Sox scandal revealed that eight Chicago White Sox players threw the World Series in exchange for payments from a gambling syndicate and to this day is seen as one of the big black marks on the game of baseball. In the 1951 CCNY point shaving scandal several players on 7 colleges and universities in the New York City area shaved points and even tried to throw games in exchange for bribes from the mob. And more recently Tim Donaghy, an NBA referee, bet on games with underground bookies and made calls to ensure his bets covered the spread. Plus of course there were numerous others, including the Pete Rose scandal and the Nikolai Davydenko debacle, not to mention all the ones that occurred but were not identified. In fact there have been reports indicating that match fixing in cricket and rugby is out of control. The motive has always been that players were willing to throw games or affect the game’s spread or total just to win bets and receive bribes. And the match fixing incidents were not limited to Europe or the U.S., but rather anywhere where gambling was taking place both legal and underground.

In the years leading up to the repeal of PASPA I spoke with some sports betting analysts and people involved in the sports industry and it seemed their biggest concern about sports betting legalization was less to do with sports fixing and more to do with how it would affect the actions of the bettors. The reaction was based on what had happened in Europe, Australia and other locations with legalized gambling and the abuse players had taken who did not perform to the standards the fans were expecting. In Europe, for example, Aurélien Tchouaméni from Real Madrid said he received abusive behavior, including death threats, from gamblers after missing a penalty kick in the 2022 World Cup, and many famous soccer players said that they were receiving abuse and threats. These grew dramatically after European sportsbooks started offering prop bets. Moreover, in a famous incident in the 1994 World Cup, Andrés Escobar was murdered after returning to Colombia by a fan who blamed him for Colombia’s loss when he scored an own goal. It was later revealed that the person who murdered Escobar had connections to Colombian drug lords who ordered Escobar killed since they had significant bets on Colombia winning. And there have been similar threats to players in all major sports as well as players in individual sports like tennis and golf, so even early on, the concern was justified.

But every analyst and observer will agree that while there has always been bad fan behavior, the climate has gotten much worse in the last few years as U.S. states have legalized sports betting.

Fan behavior is getting worse

Scottie Scheffler said before the U.S. Open that he receives constant death threats from bettors who say that a missed putt cost them a lot of money and think he missed the putt on purpose and other golfers concurred this was happening to them as well. And of course it does not help that Jontay Porter admitted to missing shots and leaving games early to win bets on his performance going under in props after he placed bets with a third party conspirator. Porter is likely to spend up to four years in jail for his crime, but for bettors that is immaterial, he cost them money. Plus of course, there were allegations made against Shohei Ohtani after his interpreter admitted to stealing money from his account and wagering on games. Still, many aren’t convinced that Ohtani wasn’t involved and no doubt wonder if an off day isn’t due to bets he made. In all these cases there was no proof that legal betting led to the poor behavior of fans, but a more recent incident proved that betting is indeed causing bad fan behavior.

At a track meet in Philadelphia after Gabby Thomas finished fourth in a 100-meter event, someone at the event posted on social media that he made Gabby Thomas lose and that he won a large parlay bet. He even posted his winning ticket placed on FanDuel on social media and said that his heckling cost her the race. While refusing to admit that she lost the race due to the heckling, Thomas said that the bettor followed her around the track and constantly shouted personal insults at her as she took pictures and signed autographs for real fans. FanDuel originally said it identified the man and banned him from the betting on the website although reports since say that the person has never been officially identified. After this incident players in various sports have said they have been heckled by fans and most believe it was an attempt to affect their performance and win bets.

What can be done?

The question is what to do about it?

Sports betting is going nowhere and these reported incidents are still relatively few in number, but there have been calls to ban prop bets on all sports to try and stop the abuse. Sixteen U.S. states have already banned prop betting on NCAA games or have bills on the table to ban it and there is a federal bill on the table called The Protect Act, which would ban prop betting on any NCAA games. So far no state has put in a complete ban on proposition betting, including professional sports, although some legislators have said that if things don’t improve with fan behavior they may initiate a ban on professional prop betting too. The concern with NCAA prop betting is that unlike professionals, players have a lot less to lose by playing badly to help win bets, since most won’t make it to the pros. Plus, with so many NCAA games on the schedule each day, a few bad beats or missed shots would more or less go unnoticed, unlike the performances by Jontay Porter or Shohei Ohtani. And any opportunities to completely throw games that involve multiple players like the Chicago Black Sox scandal would be almost impossible these days.

Sportsbooks argue that while they can’t control fan behavior, they are very adept at using technology to identify suspicious betting patterns and that banning bets would force those bettors underground, which in turn would likely increase the incidents of cheating. And of course they know that banning prop bets would hurt them immensely, since prop betting and same game parlays are contributing to the majority of their profits.

I spoke to a colleague who consults with a major sportsbook based in Canada who said that if states or provinces ban prop betting, they will be cutting off their nose to spite their face.

"I have been involved in the gambling industry for almost two decades working in Malta and Costa Rica and now Canada and I can tell you that what you are seeing now is bad but has been going on forever. When money is on the line people often act irrational, but as was learned from alcohol prohibition, when you move things out of the public view it still goes on, except without any safeguards. I would never say this publicly so please don’t use my name or I’ll be fired, but I think our sportsbook offers far too many prop bets, some that are easier to "fix" than others. For example, total number of three pointers made by a player. I always argued against offering that prop, even though it’s offered everywhere, because it’s so easy to fix. A guy has an over/under of say 3.5 three pointers. His team is up by over a dozen points with 2 minutes left and he’s currently at three 3 pointers. He gets the ball and either moves inside the 3-point line and takes the shot or he purposely misses it by a few inches. It’s impossible to argue that the player purposely did something to ensure he didn’t go over on the total and really it has no major effect on his stats or performance that will make a difference to his future salary or bonuses. So that’s not a bet I like. But I have no issue with over/under number of points scored, strikeouts, home runs, etc. because those stats are very important to the player performance and no player is purposely not going to hit a home run if they can. What I do know is that the number of props offered at the book in Costa Rica (years ago) was a fraction of what is offered today.

So, my suggestion is that as an industry we need to look at all the props we are offering and decide which ones are too easy to fix and only offer props that are meaningful to player performances. I’d also like to see some form of cooperation whereby if a bettor is suspected of cheating or acting inappropriately that his name is sent to every sportsbook worldwide and publicly posted so that he will have nowhere to continue his illegal or inappropriate actions."

Other suggestions that have been made are to have undercover people in the stands hired by the sportsbooks, event organizers or both to watch out for bad behavior and if it is determined that the fan was acting inappropriately because of a bet, that he be put on a federal ban list that would make it impossible for the person to place a bet again, similar to the casino ban lists or airplane no fly lists. And some analysts have said that there should be a law that makes it illegal to do anything to try and sway performance for the purpose of winning bets which would result in a heckler or stalker getting jail time. Of course, that could be a slippery slope that could result in fans behind the basket waving towels to affect an opposing player’s free throws being charged or even fans who yell something while a golfer is taking a swing, which is quite commonplace, bet or no bet.

So, sports betting is going nowhere, but there is no question that prop wagering is leading to some very poor behavior by bettors who are willing to do anything that they think will lead to a winning bet, or who are willing to take out a loss on a player who they believe didn’t try hard enough. The question of how to solve it isn’t clear, but the ban on NCAA prop bets is a good start. In addition, looking at all props and asking which ones are so volatile that they could result in cheating and corresponding poor fan behavior, as my colleague suggested, is another. What is happening is nothing new but it is in the media forefront as more states legalize sports betting. Kudos to FanDuel for banning the bettor at the Philadelphia track meet but it would be nice to see these types of bans happening more frequently. The more people are identified, shamed and banned the more likely it is these incidents will come to a halt.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley's RUMOR MILL!