In May of 2018, the United States Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992. This allowed states to launch and tax legal sports betting markets. Six years later, 39 states have legal betting markets, with sports betting continuing to increase even today. But the rise of sports betting has naturally led to several controversies centered around gambling in the sports world. So how exactly have these incidents impacted sportsbooks? And how have they impacted athletes and, consequently, teams?
Why are Sports Teams and Leagues Partnering with Sportsbooks?
Despite several scandals, sports teams and leagues are increasingly partnering with sportsbooks. One explanation for this is the fact that these partnerships provide revenue streams for the teams and leagues, as they are very financially lucrative. Another reason is simply because online sports betting has exploded in the US ever since it was made legal. Companies like DraftKings and FanDuel are seen in ads everywhere on TV, billboards, and social media. Now, all the major US sports leagues have partnerships with betting platforms. One example of a company capitalizing on the popularity surge is ESPN striking a 10-year, $1.5 billion deal with Penn Entertainment in August 2023, to license its brand for use in a sports betting app owned by Penn Entertainment. However, these partnerships, combined with the increasing popularity of sports betting, have led to several incidents in recent years, greatly impacting both athletes and teams.
What Gambling Scandals have Occurred Surrounding Teams and Players?
Many incidents have taken place surrounding sports teams and athletes, resulting in suspensions and bans. One such incident involved Toronto Raptors forward Jontay Porter, who in March of 2024 was investigated by the NBA for making prop bets involving himself on games that took place on January 26 and March 20. In the January 26 game, Porter played just four minutes. He scored zero points and had just one assist, as well as three rebounds. He exited the game and said at the time that he re-aggravated an eye injury, causing him to leave the game. In the March 20 game, Porter’s playing time was limited again. He left the game early once again, and this time, the Raptors said it was due to illness. Porter had no points or assists, while having only two rebounds. This led to the NBA investigating both games, as DraftKings reported that on both gamedays, prop bets on Porter were the biggest money winner for bettors. On April 17, 2024, Porter was banned from the NBA. The investigation revealed that in at least one game, Porter had purposely limited his participation. It also revealed that he had disclosed confidential information to bettors.
Another scandal surrounded baseball’s biggest star, Shohei Ohtani of the Los Angeles Dodgers. Ippei Mizuhara, a longtime friend of Ohtani, had served as Ohtani’s interpreter ever since he came to the States in 2018 to start his MLB career. In 2021, Mizuhara began placing bets on international soccer matches and other sports – but not baseball – through an operation run by bookmaker Mathew Bowyer. Mizuhara made payments from Ohtani’s bank account to Bowyer’s operation. On April 11, 2024, federal prosecutors announced Mizuhara had been charged with bank fraud. The announcement stated that he was charged with unlawfully transferring more than $16 million from Ohtani’s account “to pay off his own substantial gambling debts incurred with an illegal bookmaking operation.” Nearly a month later, on May 8, Mizuhara agreed to plead guilty to charges for stealing nearly $17 million from Ohtani’s bank account without Ohtani’s knowledge or permission and for signing a false tax return.
How have Other Sports Betting Incidents Impacted Leagues and Players?
Other (less prominent) incidents have taken place in recent years, impacting athletes greatly and bringing the integrity of leagues into question. One such example was the suspension of NFL player Calvin Ridley for an entire season after the league determined that he had gambled on games in November 2021 while on the non-football injury list. The suspension changed the course of Ridley’s career, and his team, the Atlanta Falcons, traded him during his season-long suspension to the Jacksonville Jaguars. Then, in April 2023, five NFL players were suspended for violating the league’s gambling policy. These two incidents led to the NFL enforcing even stricter penalties on those who violate betting rules, as the integrity of the sport was called into question. From that point onwards, players who bet on their own teams would be suspended for at least two years, and players who bet on any other teams would be suspended for one year. An incident involving ex-Jaguars employee Amit Patel also occurred, in which Patel pleaded guilty to stealing $22 million from the team. Patel was the overseer of the team’s virtual credit card program. ESPN had reported that he was a high-volume, high-stakes bettor known for racking up big losses. Of the money he stole, which was over a period of 3.5 years, he transferred about $20 million to FanDuel and $1 million to DraftKings, and used the rest of the money on other expenditures. Meanwhile, through all of the incidents that have taken place in the last six years, the underground betting market has continued to thrive.
The Financial Impact of Sports Betting
Ever since states were allowed to legalize sports betting in 2018, it has continually expanded. In 2023 alone, the industry generated $10 billion in revenue. Legal sports betting markets have also provided states with plenty of tax revenue. One example of this is New Jersey, which in 2022 collected over $122 million in these taxes alone. The explosion has also led to media companies, such as ESPN, capitalizing by discussing betting odds and analysis during their broadcasts. However, the growth of the industry could also lead to challenges for the major US sports leagues in the future. They could become over-reliant on the betting revenue, and if regulation were increased, it could bring up problems in terms of expansion, which the NFL, MLB and NBA have all said they expect to do in coming years. Leagues and teams will likely need to diversify their revenue streams to prevent issues if any of these problems come up.
The Future of Sports Betting and Controversies in Sports
In the past two years alone, dozens of professional and collegiate athletes and coaches have been suspended or fired for gambling violations. The integrity of major North American sports leagues, specifically the NFL, MLB, NBA and NHL, has been the topic of public discussion and continues to be questioned by fans. Repeated incidents have led to ethical dilemmas for the leagues. They continue to partner with sportsbooks, as the financial benefits are undeniable, but they also have to consider how to balance it out with efforts to ensure that teams and athletes do not destroy the integrity of sports via the influence of gambling. California and Texas, the two largest states, have yet to legalize sports betting, so there is no doubt that it has plenty of room to grow if they do. The safest bet is that there will continue to be incidents and controversies that prompt both the lucrative gambling industry and sports leagues to make changes in order to prevent collapse.
