Sports Gambling Corruption
Professor Juliet Sorensen (Northwestern University Pritzker School of Law) and Northwestern Law students David Hall and Kobby Lartey recently attended the Seventh Conference of States Parties to the United Nations Convention Against Corruption in Vienna, Austria. See here for more information on the Conference. This post is from David Hall.
If I were to tell you that a high ranking Italian government official and a Criminal Justice Officer from the UNODC were participating in a panel on international corruption, you might expect that the panel would focus on organized crime.
If I were to then tell you that the panel also included representatives from World Rugby, the International Olympic Committee, and FIFA, you would be forgiven for altering your expectations. But you would be wrong. The November 8 event on Corruption in Sport at the Conference of the States Parties to the UN Convention Against Corruption was just that- a special session on organized crime and the ways in which it has invaded the world of international competitive sports.
It may be unable to adapt its Convention Against Corruption speedily enough to match the ever-increasing problem of corruption in sports. Besides which, one audience member pointed out that framing this as a gambling and organized crime issue might even render the UNCAC useless.
Has a long history of gambling and sports betting, despite the fact that sports betting has often flouted gambling regulations and anti-gambling laws. In a nutshell, the U.S. Has witnessed a long tug-of-war between gambling laws, and people who want to enjoy gambling in various forms, including sports betting. CoolCat Casino Entertainment The greatest sports betting scandals in history Sports and gambling go hand in hand, and many love to up the ante by betting on the outcomes of sporting events. Avid sports fans and gamblers alike cannot get enough of the thrill of not only watching big games, but also wagering on the results to win serious cash. Spot fixing brings some of betting’s derivative markets into sharp focus. What impact has the exponential growth of sportsbooks had on the fight against corruption? Are we approaching a situation when sportsbooks should consider limits on the markets they offer on certain sports and on whether they can even take wagers on low level sports that present a risk to integrity? At some level, it’s a little unfair to say that sports betting causes corruption when so much betting is done in underground black markets. In most places where it’s illegal to place a bet, the only way to make a wager is by contacting a criminal. That criminal can run their business however they see fit.
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The discussion centered on the phenomenon of match fixing, which Andreas Krannich, Managing Director of Integrity Services at Sportradar, described as similar in form to insider trading. Any time in which one party knows the outcome of a match before it happens, that party can manipulate the current system of sports betting to turn a profit. Between the proliferation of internet gambling sites and the expansion of sports viewership across markets, this phenomenon is occurring with ever-increasing regularity. The panelists hinted at uncertainty regarding the actual scope of the issue, and the fact that the burgeoning field of e-sports has created even more avenues for match fixing on a massive scale. But they all agreed on one thing: that the possibility for organized crime to launder money and maintain a positive margin has led to a massive criminal presence in a rapidly expanding global sports gambling market.
What was less clear is what steps each organization might take to curb that growth. Throughout, each of the panelists representing a sports federation took the time to point to both their limited jurisdiction and the correspondingly limited ways in which they are combatting this growing problem. Friedrich Martens, Head of the International Olympic Committee’s Unit on Match Fixing and former FIFA official, pointed to the educational programs the IOC has created to warn athletes about sanctions which they might face if they engage in match fixing. Ben Rutherford, Senior Legal Counsel & Integrity Unit Manager for World Rugby, focused on his organization’s efforts to partner with sports more accustomed to gambling and thereby prevent malicious third party influences on their officials and players. Gautier Aubert, Head of Ethics for FIFA, told us about the reporting mechanisms in place for athletes who have been pressured to manipulate match outcomes.
In contrast to this chorus, Mr. Krannich spoke about his organization, Sportradar. Sportradar—and others like it—operate in the sports world similarly to how a Financial Intelligence Unit would in the financial sector. They specialize in compiling and reviewing data with some predictive value which, in the corruption context, help to isolate potential cases of match fixing. Because real-world match fixing has grown so sophisticated, these companies are essential in combatting the problem. So the company will offer these data to sports federations, government entities, and bookmakers alike.
But the corrupting influences within governments and sports organizations themselves were conspicuously absent from most of today’s conversation. The glaring exception was when Marco Befera, Head of Internal Auditing & Prevention of Corruption for the Italian National Olympic Committee, addressed the issue to declare that off the field corruption in sports is just as meaningful as on the field corruption. While his colleagues focused on the threat of global organized crime, Mr. Befera posited that they should be turning their gaze inward. Given that these sports federations have awarded positions and tournament placements in exchange for bribes, he argued, they were at least as complicit in creating a culture of corruption as criminals who have placed illegal bets on their matches. Even more, Mr. Befera opined, the reform efforts in place to address the issues of which FIFA and the IOC have been made aware are likely not enough to cover existing corruption, let alone prevent it from taking root even further.
Sports Gambling Corruption Articles
Which leaves us asking: what should we be doing to prevent further corruption in sports? Again, the one constant between panelists was the belief that, without some intervention, these problems are likely to get worse. Mr. Krannich suggested that the appropriate response is to create a robust regulatory environment for online gambling, and anything approximating prohibition will only lead to black markets which exacerbate the problem. That scenario seems plausible enough, so one might overlook the conflict of interest which his bookmaker clients pose, but it still begs the question of what form that regulation should take, and who should administer it.
Should it be the sports federations, with limited jurisdiction and corrupt track records? Should it be individual governments, who—as Mr. Krannich pointed out—have occasionally been moved to inaction for political reasons despite copious evidence of wrongdoing? Or can we rely on the UN and other international bodies to be first movers on these issues? As Ronan O’Laoire, Crime Prevention and Criminal Justice Officer for the UNODC and the panel’s moderator, was quick to mention, the UN does nothing quickly. It may be unable to adapt its Convention Against Corruption speedily enough to match the ever-increasing problem of corruption in sports. Besides which, one audience member pointed out that framing this as a gambling and organized crime issue might even render the UNCAC useless. Perhaps we should instead be looking at this under the Convention on Transnational Organized Crime. But if we don’t start looking at it soon, you can bet that the problems will get worse.
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With the Supreme Court ending a federal ban on sports betting, the floodgates have opened for some, or all, of the 50 states to legalize wagers on athletic events. With this brave new world of gaming, we’ll see extra focus on players, officials, spreads, lines and money, all as leagues, law enforcement and sports books try to ensure that sports gambling stays incorruptible. Good luck with that: Ever since professional sports were created, players have been betting on games and gamblers have been finding ways to infiltrate the games to shift the odds in their favor. Here are 11 of the biggest scandals in sports gambling history.
1. The Black Sox (1919 World Series): “Never before in the history of America’s biggest baseball spectacle has a pennant-winning club received such a disastrous drubbing in an opening game.” So wrote The New York Times after the Chicago White Sox were defeated 9-1 in Game 1 of the 1919 World Series, unaware that said drubbing was the result of eight players who had agreed to help throw the Series for gamblers.
The degree to which each player helped has been a debate for almost a century. Joe Jackson, banned for life along with seven teammates, hit .375 with a .956 OPS over the eight games and didn’t make an error. “How do you explain that?” Kevin Costner correctly asks in Field of Dreams. (Jackson admitted taking money.) Others, like pitcher Eddie Cicotte and Chick Gandil (allegedly the on-field mastermind) took a noticeable dive.
It turns out that the Sox throwing the Series was the worst-kept secret in baseball. Even before Game 1, the baseball world was atwitter with word that the fix was in but the commissioner’s office was apparently content to look the other way. It was until a separate case one year later that the word about 1919 got out. None of the Black Sox were found guilty in court (a rumor suggests that owner Charlie Comiskey and kingpin Arnold Rothstein helped disappear some key paperwork) but were banned from baseball for life.
2. CCNY point shaving (1950): In 1951, 32 college basketball players from seven schools around the country were caught up in a mafia-run point shaving scheme that hit four New York schools and three out-of-state teams, including Kentucky. It was a major blow for college basketball, especially considering that the bulk of the accused players had been on CCNY’s 1950 team, which became the first (and only) team to ever win the NCAA and NIT tournaments. The scandal decimated the team — which rivaled the Yankees and the Dodgers for New York sports supremacy at the time — and effectively ended the school’s affiliation with big-time athletics. Despite an insistence from a holier-than-thou Adolph Rupp that his boys weren’t involved in such nefarious schemes, Kentucky was banned for a full season as well.
3. Pete Rose: The all-time hit king was banned for life in 1989 for betting on games, something he adamently denied for 15 years. He finally admitted to betting while managing the Reds, but insisted he never bet on baseball while he was a player. Never! A few years later, that was proven to be another lie — evidence showed that Rose bet about once a day in 1987, typically for around $2,000. Though he frequently bet on his Reds, Rose vows he never bet against his own team and, despite his flexibility with the truth, this claim seems legit. No evidence has ever come out to suggest otherwise and, to be honest, it doesn’t really fit with what we know about the man.
4. Paul Hornung and Alex Karras: Before Pete Rose, there was Paul Hornung and Alex Karras. The former was an NFL MVP who set a league scoring record in 1960 that stood for 46 years (and is still the second-highest total in history). The latter was a first-team All-Pro defensive lineman. Despite their success (or maybe because of it), Hornung and Karras routinely bet up to $500 on NFL games while associating with known gamblers. Both men were contrite (Rose should have taken note of that in 1989) and, in issuing his indefinite suspension, Rozelle took care to mention that neither player bet on or against their own teams. The suspension was dropped after a full season. Hornung was later elected to the Hall of Fame and Karras starred on the 1980s sitcom Webster.
5. BC Goodfellas: The most notorious real-life gangster portrayed in Goodfellas didn’t go down for the Lufthansa heist, whacking Billy Batts, robbery, murders or aiding and abetting Joe Pesci being called a clown. Jimmy Burke (played by Robert DeNiro in Martin Scorsese’s mob masterpiece) went to jail because Henry Hill (Ray Liotta) ratted, almost off-handedly, about a point shaving scandal involving the Boston College basketball team. Hill had been arrested on various drug counts and, in his interviews, casually mentioned the BC story. Once it became clear that the Feds were interested in this to help bring down members of the Lucchese family (remember, Al Capone went down for tax evasion), Hill asked for immunity and ratted on his friends. It had been a successful partnership, for a little. After a rocky start, the syndicate began winning money on Boston College, by betting the Eagles to win games but lose against the spread or fail to cover a big spread in a game they wouldn’t have won anyway.
6. John “Hot Rod” Williams: Before he became a beloved NBA veteran, John “Hot Rod” Williams faced jail time over a 1985 point shaving scandal at Tulane that ended up shuttering the basketball program for four seasons. With a healthy mix of money, cocaine and 1980s-era bravado, five players were accused of shaving points in two games, all for a shared pot of $17,000. Williams twice went to trial – the first was declared a mistrial and the second ended with his acquittal on five counts. He went on to play 13 years in the NBA.
7. Rick Tocchet: The story of Tocchet, an NHL All-Star and Stanley Cup champion, was sordid enough. He pled guilty to involvement with a $2 million gambling ring that took bets from the rich and famous. But Tocchet’s tale took an unexpected turn when the name of Janet Gretzky, wife of the Great One, appeared in the books.
8. Art Schlichter:The fourth pick of the 1982 draft accrued nearly $1 million in gambling debts by the end of his first year in the NFL, by betting various sports including, allegedly, 10 NFL games. (Like Hornung and Karras, Schlichter was never accused of betting on his own team or using his position to influence his wagers.) Schlichter was reinstated in 1984, was out of the league by 1985, never won an NFL game and has spent the last 30 years in and out of jail. His latest offense — a scan selling phony tickets to sporting events — sent him to prison for a decade.
9. Joe Namath: After Super Bowl III, Namath, a playboy bachelor, was the biggest thing in American sports. He decided to capitalize on it by opening a night club named, cleverly, Bachelor III. Mark Kriegel wrote in his biography Namath: “ regulars included con men, fences, bookmakers and of course made men — exactly the kind of guys you’d expect to find in a hot East Side joint.”
Sports Betting Corruption
Commissioner Pete Rozelle told Namath to sell his interest in the club because of its reputation but, rather than sell, Namath retired instead. He changed his tune one month later after a meeting with Rozelle. On his way out of the commissioner’s apartment, after agreeing to cut ties with his club, Namath was approached by Rozelle’s 11-year-old daughter. “Mr. Namath, I just want you to know that everyone in the Rozelle family doesn’t hate you.”
10. Tim Donaghy: In 2007, an FBI investigation revealed that Tim Donaghy, a longtime NBA referee, had bet on NBA games and fed information to other gamblers after falling into debt. The scandal was both a huge story and quickly faded from the public consciousness, almost like sports fans want to delude themselves into thinking that everything is always on the up and up.
11. Northwestern: Dewey Williams and a teammate were given a brief prison sentence for their role in fixing games during the 1995 season. Why gamblers didn’t trust Northwestern basketball players to simply lose games on their own, as per usual, is the enduring mystery of this tale.