The Upside to the College Betting Scandals

By: Steven Eichorn

In May 2023, several high-profile sports betting scandals involving collegiate athletic personnel, including both coaches and players, came to light, spawning discussions about the relationship between sports integrity and sports betting. Two months after those reports, NCAA President Charlie Baker indicated that the NCAA has found 175 infractions of its sports-betting and gambling policy since 2018, with an additional 17 ongoing investigations.

On its surface, such statistics seem to indicate a worrying lack of integrity in college sports that is the result of sports betting proliferation; the thought behind this being that the now-ubiquity of betting and wagering opportunities increases the probability of match-fixing and manipulation.

Instead, the opposite is true: sports betting legalization and regulation promotes sports integrity by means of superior detection methods via specialized data analytics and integrity monitoring companies, robust Know-Your-Customer procedures, and the reduction of illegal gambling operations’ market shares.

The high number of infractions in the NCAA’s report are a result of the sports betting industry’s increased ability to detect infractions because of sports betting legalization. The notable lack of robust infraction statistics before 2018 are not a result of low infraction incidence but instead the incapacity to detect infractions well, since there were no data integrity companies collecting and analyzing relevant game and betting data to detect anomalies that could be the result of misconduct. Because there were very few legal operators beholden to the regulatory policies of federal and state law, most gambling occurred through illegal off-shore operations, leaving instances of match-fixing, manipulation, or insider information tipping vastly more susceptible to going unnoticed or unreported.

The shift to legal operators has paved the way for companies that specialize in maintaining the integrity of sports and sports betting, as every party involved has a shared interest in doing so, for legal and commercial reasons. As we’ve discussed previously, sportsbooks have a critical commercial interest in ensuring the integrity of the games on which they accept wagers, as match manipulation often results in a disproportionate volume of losses by the company on a side predetermined as a winner. Even so, the sports-betting industry, despite it being against its own financial interest, is likely to be blamed for an unfair outcome, as it is currently in the case of collegiate athletics, which entails customer, handle, and reputation loss.

The entire sports industry suffers if games are not played or wagered on with integrity, so companies that specialize in helping maintain integrity have naturally appeared to fill that need since the legalization of sports betting. Hence, the increased infraction incidence because of the increased incentive to ensure integrity. Not only is technology better but now state gaming commissions and agencies as well as professional sports organizations all maintain a watchful eye on leagues, their players, and sporting events for which there are permitted wagering activities.

The NCAA, for instance, reported that it monitors approximately 13,000 regular and postseason sporting events of all sports and divisions that have wagering offerings in the “global sports wagering marketplace” and has found that less than 0.25% of competitions are flagged for suspicious betting patterns, with a much smaller percentage having specific, actionable information. Most, if not all, major professional sports organizations are engaged in the same or similar efforts to monitor the integrity of their competitions now that sports betting has been legalized.

Supplementing these analytic efforts are robust Know-Your-Customer procedures that require operators to collect the personally identifiable information of customers. These procedures make identifying persons who face restrictions on their sports wagering activity, or persons in some way related to or in relation with them, far easier to surveil or trace in the case of an infraction.

While such regulations streamline the process of identifying offenders, anonymous wagers may still be traced to their source when they are flagged as suspicious. In one of the cases reported on in May 2023, for example, anonymous wagers over $1,000 (which are prohibited by Ohio law) were placed inside the Cincinnati Red’s ballpark in favor of Alabama’s baseball team. When the wagers were flagged and consequently investigated, it was determined that the Alabama head baseball coach, Brian Bohannon, was connected to the wagers.

The legalization of sports betting also diminishes the market share of illegal off-shore operations, which are by definition not subject to the same regulations as their legal counterparts and thus are not in coordination with regulatory bodies and other companies in identifying offenders of betting policy restrictions. This transition from illegal to legal betting broadens the reach of sports betting regulations and protections, extending them to a larger number of customers. As a result, the sports industry becomes more controlled, regulated, and transparent, demonstrating the positive impact of legalization on maintaining sports integrity by decreasing off-shore opportunity for illicit conduct.

That sports betting legalization bolsters sports integrity is backed by data from Sportsradar’s annual Betting Corruption and Match-Fixing Integrity Services Report from 2022, which revealed a 25% decline in the number of suspicious matches in North America from 2021. [1] As we’ve written previously, it seems that the large increase in regulation and rules surrounding sports betting is responsible for the decrease in misconduct, as North America is the only major region that Sportradar reported not only a decrease in suspicious matches but a notably fewer number of those matches compared to other regions as well. The region with the most suspicious matches was Europe at 630 and the region with the least was North America with 24—the next lowest was Africa at 93. [2]

As such, we can only hope that more states look toward legalizing sports betting in order to not only extend the numerous protections and benefits to constituents but also to protect the integrity of the broader sports industry and the athletic events we all cherish.

[1] https://sportradar.com/wp-content/uploads/2023/03/Betting-Corruption-And-Match-Fixing-In-2022.pdf

[2] It should be noted that, per the Sportradar Report, 99.5% of sporting events have no instances of match-fixing and no sport had over a 1% incidence rate per match.