The Utility of Gambling

The powers that be in America's major sports, both college and professional, don't like to acknowledge it; but one of the prime reasons that they're able to sign ever-more-lucrative television contracts is gambling. Television networks sign the contracts because the games that they broadcast attract lots of the kinds of viewers that advertisers like. A lot of those viewers are watching because they have money riding on the games. Let's face it: even the most hardened football fan will acknowledge that a significant portion of NFL games are boring, and they wouldn't be watching them if they weren't wagering on them (or because the results of their fantasy football league didn't depend on them). The NCAA basketball tournament is tremendously exciting because of the potential for upsets, but would as many people watch it if most of the viewers didn't have money riding on the results through one of those office pools?

Since the 1919 Black Sox scandal (wherein eight members of the Chicago White Sox conspired with a professional gambler to throw the World Series) gambling has been anathema to sports leagues. Pete Rose was banned from baseball for betting on baseball games (including games involving his own team). Michael Vick's recent suspension from the NFL for running a dog fighting ring was undoubtedly made longer than it otherwise would have been because he was betting on the dog fights, and the NFL views gambling by its players, coaches, or officials as particularly disturbing, even if the gambling isn't on football. Two or three years ago, the NCAA lobbied heavily for a bill before Congress to ban betting on college sports. Las Vegas has been trying for years to get an NBA team to move there, and the league has always been intractably opposed because Vegas has legal sports gambling.

Well, the Wall Street Journal reports that the times, they are a' changin'.

These days, LVSC [Las Vegas Sports Consultants, Inc., a company that helps Las Vegas sports books set the lines for sports and investigate evidence of point shaving and other sorts of unsavory behavior] is working for college sports' governing body, the National Collegiate Athletic Association, to help flag suspicious activity. LVSC is also working with the National Football League and the National Hockey League, and has consulted with the National Basketball Association. The company has a deal with the NCAA's Big 12 conference, as well, to provide detailed reports on every one of its schools' football and men's basketball games.
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Sports books profit when bets are balanced because they can pass money from the losing half of the betting pool to the winning half, minus a commission. LVSC and other companies that supply betting-line guidance get repeat business when they set reliable spreads.

When bets come in disproportionately, casinos move the betting line in an attempt to re-equalize wagers on each side. But if a gambler succeeds in placing a large bet on one side and then illicitly assures the outcome, casinos lose money unfairly.

Las Vegas bookies say this gives them a motivation to police against match fixing. They also say their reams of performance and betting-flow data can be used to flag unusual patterns. "We're on the same side," says Jay Kornegay, the executive director of SuperBook, the Las Vegas Hilton's sports book operation. "We're league allies." ("Oddsmakers in Vegas Play New Sports Role" by Tamara Audi and Adam Thompson, October 2, 2007, p. A1)

It's true that Vegas was built by the mob, but casinos today are owned by large, publicly-traded, multinational corporations. They have nothing to gain from illegal activity like collusion with point shaving. Rather, they have every incentive to detect it and unmask it. That means that their interests coincide with those of the sports leagues, which want fair contests. It's true that there have been a number of gambling-related scandals in sports recently (including the NBA referee who was in bed with some gamblers to influence final scores), but all of these scandals have a common thread: they were illegal. They weren't perpetrated by representatives of legal casinos; rather, the guilty parties were mostly mob-influenced. Legal gambling helps leagues spot funny business because it provides publicly-available data about how much money is being bet on games and in what direction, thus making it easier to spot suspicious moves in the line or unexplained heavy betting on a particular game. In essence, Vegas sports books are like a public sports market. Because they're public, it's much easier to spot manipulation, just as it's much easier to spot manipulation of publicly-traded stocks. Officials of sports leagues are to be commended for waking up to reality and understanding that legal gambling isn't the enemy; mob-influenced gambling is, and legal gambling makes it easier to ferret the corruption out.