Colleges brace for gambling fallout
OXON HILL, Md. – Tom McMillen is CEO of an association of college athletics directors, a former congressman, a former NBA player — and now, unofficially, an oddsmaker.
“I’ll give you something that I’ll put 100% odds on,” he said the other day. “If gambling on colleges is in 20 or 30 states, there is probably a 100% chance of a point-shaving scandal at some school.”
McMillen was part of a panel discussion recently at the annual conference of the Sports Lawyers Association. He stopped short of offering an over/under as to how soon he thinks such a scandal could come now that the Supreme Court has ruled states are free to allow gambling on sports, including college sports.
The calculus behind McMillen’s assertion is simply this: Athletes in the
major team sports are paid so much that they are unlikely to risk their careers by fixing games or shaving points, whereas college players are vulnerable to illicit offers because of NCAA limits on their compensation.
“I’m just sitting here smiling,” said Kate Lowenhar-Fisher, a Las Vegas attorney, “because if the problem is amateur athletes are susceptible to corruption because they’re not getting paid, then we could fix it by paying them.”
Laughter and light applause washed the room at Gaylord National Harbor Resort and Convention Center in the D.C. suburbs. McMillen represented the area in Congress when he voted for
1992’s Professional and Amateur Sports Protection Act. That law effectively banned commercial sports betting in most states. The Supreme Court recently overturned it as unconstitutional.
Delaware announced it will launch full-scale sports betting next Tuesday. New Jersey, which pushed its case to the Supreme Court, hopes to begin later in June. At least 20 states are at various stages of considering or implementing sports betting, according to information compiled by the USA TODAY Network.
Sara Slane, senior vice president of public affairs at the American Gaming Association, rejected McMillen’s premise that wider legal sports betting is likely to lead to scandal. She said college athletes are already susceptible to inducements from illegal gamblers.
“I’m not sure what’s changed,” she said, “other than having more data to see when something could potentially be happening.”
Slane’s point is it will be easier for the gaming industry to track irregularities when it has a pool of transactions wider than Nevada’s to study. Point-shaving scandals have dogged college basketball for generations, from CCNY in the 1950s to Boston College in the 1970s to Tulane in the 1980s.
McMillen is president and CEO of the
LEAD1 Association, which represents
130 athletics directors and programs of the Football Bowl Subdivision, including college sports’ best-known brand names. He said the association surveyed its athletics directors and found
80% oppose legalized sports betting on colleges. They worry about point shaving, McMillen said, but also about the added expense of educating athletes and monitoring them.
“They would have to hire a lot of people to bird-dog this,” he said, “because a scandal at a university is catastrophic.”
‘Brave new world of issues’
Just how newly legalized sports betting will shake out is hard to say, perhaps more so for colleges than major pro sports.
“This opens up a whole brave new world of issues — intellectual property issues, commercialization issues, how injuries are reported” in college sports, said Gary Roberts, president of Bradley University and a longtime sports lawyer and professor. “It’s too early to sort through all of them, but I know that it’s going to create an industry of people dealing with all of the spinoff issues.”
Injury reports, frequently perused by bettors, are a staple of the NFL. Gabe Feldman, director of the sports law program at Tulane Law School, said greater privacy interests and legal rights afforded to students could well lead to colleges deciding against making such information public.
If the lack of injury information “dissuades some people from betting on college sports,” he said, “I don’t think the NCAA would be unhappy about that. Now could an individual conference decide they wanted to provide more injury reporting? I don’t know.”
Sometimes fellow students are in the best position to know if the quarterback wrenched a knee — or broke up with his girlfriend. That sort of information could be valuable to gamblers.
“Who would have better inside information than fellow students?” said John Wolohan, professor of Sports Law in the Falk College of Sport and Human Dynamics at Syracuse. “But, once again, I think we still see that happening today” before legal sports betting goes wide.
Feldman said the NCAA will be able to continue its ban on sports gambling for athletes, even in states where it’s legal. He pointed out the NCAA already does that with certain performance-enhancing drugs that are otherwise legal.
“It’s not illegal to fall below a certain GPA, but they can still put requirements in that if you don’t meet those standards, you’re not eligible,” Feldman said. “Likewise, if you gamble on sports, you’re not eligible.”
Whether athletes will be allowed to bet legally on sports other than their own “are going to be interesting questions that will have to be addressed,” Roberts said. “There are a lot of nuances and a lot of rules that are going to have to be reconsidered.”
No betting on in-state schools
The proposed gambling law in New Jersey would prohibit betting on schools in the state, such as Rutgers and Seton Hall, as well as college games played in the state. Delaware’s law excludes collegiate sporting events that involve a Delaware school.
“I wouldn’t be surprised if we see other states kind of tailoring their legislation to protect their own college athletes,” Wolohan said. “The idea is if there’s going to be corruption, or the game is going to be corrupted somehow, it’s OK if it’s up in Syracuse or Ann Arbor, just not if it’s down in New Brunswick.”
Nevada originally had a similar betting exemption for colleges in the state but no longer. The gaming industry opposes these kinds of carveouts.
“You can’t have certain teams that you aren’t able to offer bets on because all that’s doing is fueling the illegal market,” Slane said. “Someone is going to take a bet somewhere if it’s not through the legal, regulated operators.”
Athletics directors would like to see laws that exempt college sports, McMillen said, but they “are also realists. They know 30% to 40% of the book in Vegas is college sports. And it’s not likely that the states are going to carve them out of this.”
The NBA and MLB have advanced the notion of so-called integrity fees, perhaps 1% of a sportsbook’s handle. McMillen said schools would like to be paid for what he calls increased moni- toring costs as well.
If colleges are “able to get a piece of that pie, that could potentially generate hundreds of millions,” Wolohan said. “That’s still a lot of money not going to the athletes. And once again that will be one more thing the athletes point to and say, ‘We need a piece of this.’ ”
That’s if sportsbooks ever have to pay such fees. The gaming industry will fight them. Slane said 1% “sounds like a drop in the bucket” but that comes before winners and taxes are paid. “If you want to shut down the illegal market,” she said, “we have to be able to compete.”
Another potential source of revenue for colleges from legalized sports betting is fees for official data, which the pro leagues are advocating for, but it’s not clear where the line is between public information and proprietary data.
Additionally, schools and conferences might decide they’d be willing to accept advertising or other forms of sponsorships from sports betting enterprises. The Pac-12, for instance, wholly owns its conference television networks, the Big Ten partially owns its network and other conferences have a say in the types of advertising their television partners can accept. There already are many schools that have sponsorship agreements or other types of relationships with casinos, casino hotels and/or state lotteries.
“I also suspect, knowing how entrepreneurial many of our universities are, that they will figure out a way to monetize this gambling,” Roberts said. “They oppose gambling, but if there’s going to be gambling on their events, they want to figure out some way to make some money off of it. So we’ll already take a highly commercialized aspect of our universities and even make it more commercialized.”