COLLEGE SPORTS WAGERING:
A CASE STUDY ABOUT GAMBLING ON COLLEGE
ATHLETICS AND THE MOTIVATIONS AND CONSEQUENCES SURROUNDING
LEGISLATION WANTING TO BAN WAGERING
ON COLLEGE SPORTS
NEIL H. HUFFEY
Greenspun
College of Urban Affairs
University
of Nevada, Las Vegas
Spring
2001
A professional
paper submitted to the Graduate Faculty in Public Administration in partial
fulfillment of the requirements for the degree of Masters of Public
Administration, The University of Nevada, Las Vegas
ABSTRACT
Sports wagering is the largest form of gambling in the
world. In the United States, the
practice is largely illegal.
Nonetheless, it has sustained incredible growth both legally and
illegally throughout the twentieth century.
Current legislation in Congress would revise a 1992 federal law that
banned legal sports wagering in this country with the exemption of four particular
states, Nevada included. The state of
Nevada is the only place in which wagering on college sports is legally
practiced. The State of Oregon runs a
small sports betting game out if its lottery.
Proponents of the legislation suggest that passage is necessary in order
to protect student-athletes and to remove the “unseemly influence” sports
wagering has on amateur athletes and the games they play. Conversely, opponents of the legislation
declare the problem of college and other youth gambling stems from illegal
betting on campuses and elsewhere, not from legal wagering in Nevada, which is
closely regulated, policed, and taxed.
They argue that there is no compelling evidence that illegal betting
will be reduced by banning wagering on legal sports betting, particularly when
98 to 99 percent of all sports wagering is already illegal. The purpose of this case study is to examine
the issue of college sports wagering in the context of the existing legislation
wanting to ban it.
TABLE OF CONTENTS
ABSTRACT……………………………………………………………………………..ii
ACKNOWLEDGMENTS…………………………………………………..……….…v
CHAPTER ONE: METHODOLOGY AND PURPOSE………………………..….6
CHAPTER TWO: INTRODUCTION………………………………………………10
The
Expansion of Legalized Gaming…………………………………..10
Gaming
Regulation…………………………………………………………11
Sports
Betting……………………………………………..…………………14
Development and Background of Sports Betting…………….………15
Reasons for Sports Betting…………………………………………..……19
CHAPTER THREE: COLLEGE SPORTS WAGERING……………..…………22
Illegal Sports Betting And College Athletics ………………………….22
Corruption in Sports:
Sports Wagering’s Impact
on the Integrity of the
Game………………..……………………………25
Sports Betting on Campus
and Among Student Athletes……..….27
CHAPTER FOUR: NATIONAL COLLEGIATE ATHLETIC
ASSOCIATION……………………………………………………………………32
Background
and Purpose……………………………………………...….32
The NCAA and
Gambling/Sports Wagering…….…………….……….33
The Amateur Sports
Integrity Act: A Ban Against
College Sports
Wagering…………………………………………..………41
CHAPTER FIVE: THE GAMING INDUSTRY………………………..………….43
Arguments Against Banning
College Sports Wagering………….…43
Legislation to Curb the Real Problem, Illegal Sports
Betting……..48
CHAPTER SIX: CURRENT ACTION AND LEGISLATION……………………52
CHAPTER SEVEN: CONTEMPORARY QUESTIONS ABOUT
SPORTS GAMING……………………………………………………………….55
CHAPTER EIGHT: RECOMMENDATIONS AND CONCLUSSION….……..65
REFERENCES……………….……………………………..………………………..70
ACKNOWLEDGMENTS
Writing this
professional paper has been a collective effort in several ways. My family and friends have been
indispensable during my graduate years at the University of Nevada, Las
Vegas. Their encouragement and
enthusiasm for the completion of this endeavor has been overwhelming. This professional paper is the culmination
of an effort that has caused me substantial devotion and gratification.
I would like to
personally thank Senator Richard H. Bryan, Frank J. Fahrenkopf, Jr., Bill Saum,
Bill Eadington, Tony Cabot, Bob Faiss, and the helpful people from the Gaming
Studies Research Collection at the UNLV Special Collections for assisting me
with this case study.
The Public Administration
faculty and staff at UNLV have been very helpful and supportive, not only with
the creation of this paper but also with my entire graduate school
experience. I could not have completed
this task if it was not for the guidance of my Committee Chair, William
Thompson, Ph.D. His help along with the
commitment of Lee Bernick, Ph.D., Soonhee Kim Ph.D., Karen Layne, D.P.A., and
Anna Lukemeyer, JD, Ph.D. were beneficial in the conclusion of this paper and
M.P.A. degree.
This professional paper could not have
been completed without the assistance and devotion given to me by my parents,
Paul and Dorothy Huffey. Their
commitment to my educational attainment throughout my life is as immense as
their support and love they bestow upon me as their son.
CHAPTER ONE: METHODOLOGY AND PURPOSE
While
researching the topic of college sports gambling and examining the support for
and against it, I quickly realized the scarcity of literary resources readily
available on the subject. Through my
contracted research, I have discovered important information in several areas
regarding the issue of college sport wagering and in turn I have added new
information to the subject matter itself.
However, the need for additional research about sports gambling and more
specifically illegal sports betting on collegiate athletics and around college
campuses remains. Therefore, a
literature review is not suitable within the context of this investigation.
The topic of
wagering on college sports is presently being debated and unfolding at the time
of this writing. As a result, the most
reliable literature on the subject consists of current records, essentially
media documents. Primary resources and
empirical studies concerning the topic were difficult to uncover. The methodology surrounding this paper
involves the culmination of extensive research, personal discussions and formal
interviews with various experts in their field relating to the subject and
direct observation of the process and policy itself.
This case study
incorporates information collected from existing literature, including
periodicals, newspaper, magazine, quarterly, and scholarly journal
articles. Individual interviews and
material collected from information services were also necessary for the
scarcity of data readily available. The
various interviews I conducted over a three-week span are with individuals who
work on both sides of the issues. In
gathering the information, I began to recognize that my personal contacts and
communications with numerous experts in their field were the most beneficial to
me.
I spoke
numerous times to former United States Senator Richard H. Bryan on the
legislative and legal issues surrounding the proposed college ban. His first hand knowledge and activity on the
issue became an invaluable resource in the preparation of this case study. The NCAA’s Sports Wagering Staff was also
helpful in assisting me in my research.
I interviewed Bill Saum, the NCAA’s Director of Agent, Gambling and
Amateurism Activities on the Association’s view of gambling and its efforts to
banish college sports betting. His
assistant, Deana Garner was also interviewed about the NCAA’s current involvement
to prevent gambling on its college campuses.
I informally spoke with gaming entrepreneur Si Redd, who today considers
himself more of a sports betting expert rather than a casino owner. His colorful recollection of sports gambling
history and his thoughts of the legal and illegal business of sports gambling
today was indispensable. The fine
people over at the Las Vegas Club Hotel and Casino in downtown Las Vegas were
helpful in their perspective as sports book operators. I also interviewed Bill
Eadington, Ph.D., Director of the Institute for the Study of Gambling and
Commercial Gaming at the University of Nevada, Reno. Dr. Eadington assisted me with issues relating to the economic
and social impacts of the gaming industry.
His assistant, Judy Cornelius was also extensively questioned concerning
the topic. I interviewed gaming
attorneys, Tony Cabot and Bob Faiss from the law firm of Lionel Sawyer and
Collins. Mr. Cabot was interviewed to
get a current perspective on Internet gambling, and Mr. Faiss was interviewed
concerning gaming law and the issue of eliminating point spreads. Lastly, but most notably, I interviewed
Frank J. Fahrenfopf, Jr., President and CEO of the American Gaming Association
(AGA), specifically about the college sports betting ban.
Mr. Fahrenkopf
and the staff at the American Gaming Association were instrumental in their
support and generosity bestowed upon me as an intern with them the summer of
2000. Working in the AGA in Washington,
D.C. gave me the opportunity to experience first hand the legislation and its
activity on the Hill. The method of
direct observation became the greatest asset I had in preparing and in writing
this case study. I chose this method of
investigation rather than conducting a survey approach because it avoids the
problems of poor recall and self-serving distortions. Direct observation along with formal interviews allowed for
measurement in a context that was more natural than any other form of assessment. However, it can be argued that my observations
may lend itself to biased conclusions based on my employment with the gaming
industry’s lobbing faction.
Nevertheless, the content of this comparative case study incorporates
both qualitative and variable-orientated approaches to arrive at its
conclusions.
The purpose of
this case study is to examine sports betting and more specifically the issues
and concerns involving college sports betting.
This paper intends to examine the legislation and motivations
surrounding a ban on college sports betting and the resistance and consequences
to it. This case study is significant
because it attempts to investigate a current issue in an ever-changing gaming
industry. It does this by getting to
the root of the problem: illegal gambling on collegiate sports while at the
same time attacking Congress’s attempt to impede on state’s rights.
CHAPTER TWO:
INTRODUCTION
THE EXPANSION OF LEGALIZED GAMING
Gambling is a universal
phenomenon; it occurs among people of all ages and cultures, and it has been
widespread since the earliest stages of human development. It is one of very few activities that has
been found in nearly all societies around the world, throughout every era. In the United States, gambling has been
socially accepted, and its acceptance has considerably increased over the past
twenty-five years. Prior to 1950,
gambling activity was, with some exceptions, generally prohibited by federal
and state governments (Dept. of Justice, 1976). However, since then, an increasing trend toward the legalization
of various forms of gambling activity has occurred. The American public has shown an overwhelming support for gaming
activity and has deposed the moral undertones that have plagued it for decades. Today, more than 80 percent of Americans
believe that casino gaming is acceptable for themselves or others (AGA, 2000,
p. 5).
In 1975, Nevada was the
only state that offered casino gambling, thirteen states had lotteries, and
sixty-eight percent of adults had gambled [Commission on the Review of the
National Policy Toward Gambling (CRNPTG), 1976]. By 1988, forty-six states had sanctioned some form of gambling
(i.e. lotteries, pari-mutuel wagering, casino gaming, etc.) for entertainment
purposes. A snowballing effect occurred
as numbers of jurisdictions endorsed the legislation of particular forms of
gambling (Thompson, 1997, p. 16).
During the 1990’s, the gaming industry saw an extensive and accelerated
growth period throughout every jurisdiction in the United States. Today, all but two states, Utah and Hawaii,
have legalized some form of gaming. In
1982, gross gambling revenues (dollars wagered minus the winnings returned to
players) totaled $10.4 billion. In
1997, gross gambling revenues had increased to more than $50 billion [National
Gambling Impact Study Commission (NGISC), 1999, p. 1.1]. Today, Americans enjoy a variety of gambling
options including bingo, card clubs, casinos, charity gaming, lotteries,
pari-mutual betting, and gaming on Indian reservations (Eadington, 1996, p.
3). Eighty-six percent of the North
American adult population has participated in these games of chance (National
Opinion Research Center, 1999). One
such form of gambling, betting on sporting events, exists at the professional
and collegiate levels. Interestingly,
betting on sports is the largest form of gambling in the world, the United
States included.
GAMING REGULATION
Over the past
thirty years, the United States has been transformed from a nation in which
legalized gambling was limited and relatively isolated activity in one state,
into one in which such activity is commonplace and growing. The role of government and its impact on
gaming regulation has been paramount in the expansion of legalized gaming. Governments determine which kinds of
gambling will be permitted and which will not; the number, location, and size
of establishments allowed; the conditions under which they operate; who may
utilize them and under what conditions; who may work for them; even who may own
them (NGISC, 1999, p. 1.4). Much of the
gaming regulation comes from the state or local levels and focuses on policing
functions (i.e. ensuring the integrity of the games offered) and crime
enforcement duties.
However, the
federal government has had a storied history with gambling within its
borders. Until relatively recently, the
federal government largely deferred to the states in matters relating to
gambling. Gambling has always been left to the states except where constitutional
provisions, such as with Native American gaming, were relevant, where there was
concern for the involvement of organized crime, or where the federal government
might have to settle a dispute between states. Washington’s attention focused
largely on criminal matters, including organized crime, fraud, and the like,
especially when these involved activities across state lines (NGISC, 1999, p.
3.1). The Kefauver Committee
investigations of the 1950’s set the tone in Washington to end the unsavory
activity associated with casinos at the time.
Since 1950, the federal role in the regulation of gambling has expanded
significantly (Blakely & Kurland, 1978, p. 932). Attorney General Robert F. Kennedy’s efforts against organized
crime and syndicated gambling highlighted the 1960's; also in the 1960’s,
Congress acted twice against gambling.
First, penalizing bribery in sporting events with the Federal Sports
Bribery Act of 1964 and
second, restricting bank participation in the finances of state-conducted
lotteries. The 1961 Wire Communications
Act (Wire Act) is a significant piece of legislation in the federal
government’s expanded regulatory role over gambling. The “Wire Act” prohibits the use of wire communications
(telephones, telegrams, etc.) by persons or organizations engaged in the
business of wagering to transmit bets or wagers, or to transmit information
that assists in the placing of bets or wagers, taking care to specifically
mention “sporting events and contests (18 U.S.C. § 1084).” All of this legislation led up to the
Organized Crime Control Act of 1970, which devoted one of its titles solely to
the issue of ridding unlawful activity in the gaming industry.
Two
comprehensive studies of gambling in the United States were commissioned by the
federal government in the latter half of the twentieth century. In 1974, a study of gambling behavior was
conducted under the direction of the Commission on the Review of the National
Policy Toward Gambling. This study
reported that 61 percent of Americans had gambled in 1974, and 11 percent of
the gamblers bet illegally (Frey, 1985, p. 192). The second study began in 1996 and was completed in 1999 by the
National Gambling Impact Study Commission.
Their objective was to conduct an extensive legal and factual study of
the social and economic implications of gambling in the United States. The National Gambling Impact Study
Commission’s Final Report and Recommendations are the most comprehensive
analysis of the state of gambling in America.
The Commission’s remarks and data will be used extensively throughout
this case study. This Commission’s
research suggests that 86 percent of Americans report having gambled at least
once in the past year (NGISC, 1999, p. 1.1).
Today, as it was fifty years ago, gambling is an issue that is not
intended to be settled at the national level.
Gaming regulation in the United States has always been viewed as most
appropriate for state and local jurisdictions; the federal government would
intervene only if there were an interstate matter. Washington’s concern about the effects of gambling into America’s
economic and social structure is a venerable one. The amount of money bet legally has exploded 2,800 percent in the
last two decades, from $17 billion in 1974 to $482 billion in 1994 (Harden
& Swardson, “You Bet! It’s the New, $482 Billion Pastime,” 1996, p.
A-1). This kind of growth demands
investigation; yet each inquest delivers the same response: gambling issues are
to be appropriately addressed at the state, tribal, and local levels.
SPORTS
BETTING
Betting on the outcome of
athletic events and races is as old as sport itself. From informal, illegal office pools to legal bookmaking in
Nevada, wagering on sporting events is a prevalent activity in American culture.
The term sports betting or wagering, as defined in this paper, will refer to
wagers made both legally and/or illegally on the outcome of sporting events; it
includes sports lotteries, futures, pool wagering, team and/or individual
competition. This definition does not
include horse racing, dog racing, jai alai or any other type of pari-mutuel
activity. Wagering on sporting events
is a popular practice in every country throughout the world, including the
United States. Gambling on athletes and
sporting events around the world is generally legal and governed by local
government authorities. The United
States is the exception, betting on professional and collegiate sports in the
U.S. is considered an illegal activity.
A 1992 federal law (Professional and Amateur Protection Act) permits it
in only four states: Nevada, Oregon, Montana, and Delaware. However, only
Nevada and Oregon currently conduct sports betting operations. Sports betting in both Nevada and Oregon is
strictly regulated and taxed.
DEVELOPMENT AND BACKGROUND OF SPORTS BETTING
Sports betting
in America has experienced unimaginable progress, especially in the past three
decades. Betting on sporting events is
the most popular form of illegal betting in the U.S. and is one of the fastest
growing forms of legalized gambling.
Sports wagering is common place from the nation’s factories to the
boardroom. The growth in the popularity
of legal sports wagering can be attributed to many factors. These same factors have contributed to the
explosive growth and interest in illegal sports betting around the nation. These include the following:
·
The decrease in the federal
wagering excise tax from 10 percent to 2 percent to eventually 0.25 percent on
January 1, 1983. This served to convert
many of those betting on sports illegally to do so in a legal manner. It made sports bookmaking a profitable
business venture.
·
The saturation of sporting
events in the media has enhanced the public’s familiarity with various types of
sports. Cable television and satellite
technology has made it possible to bring the games live and direct to the
sports books. The ever-expanding mass
media marketing of professional and collegiate sports has risen to enormous
levels. The three most popular sports
for wagering (football, baseball, and basketball) all have major contracts with
national and local television providers.
·
The weakened stigma
associated with gambling in general and specifically, with gambling on
professional events (Frey, 1985, p. 190).
Gambling, especially on
sporting events, is determined a victimless crime, or a crime in which the
accused has not acted in a manner considered harmful to another.
·
The legitimization of
sports gambling in the eyes of the public has been promoted by the frequent
“natural” association of gambling with sport, particularly by the media (Frey,
1987, p. i)
·
Major Nevada resort hotels
and casinos discovered that in-house race and sports books were good for
business and created substantial “foot traffic” through the casino.
·
The volume of information
available to the sports bettor has increased to the point that the gambler does
not have to be at a severe disadvantage when compared to the knowledge
possessed by the bookmaker (Frey, 1987, p. i).
The rise of
professional sports, especially televised professional football, has brought
about significant increases in the volume of sports betting in the United
States. Moreover, legalized sports
wagering in Nevada flourished considerably when the federal gambling tax was gradually
reduced from 10 percent to 2 percent from 1975 to 1979. The sports handle increased dramatically
from less than $41 million in 1973 to almost $258.7 million by 1979.
Gambling on
sporting events involves large amounts of money, but just how large may be
impossible to determine, because most sports betting is done illegally. Sports betting is legal in only two states:
Nevada, through casino sports books, and Oregon, through a state lottery game
entitled, “Sports Action.” This game is
based on contests played in the National Football League and would not be
affected by a federal ban on college wagering. Interestingly, the proceeds
derived from this sports lottery game are assigned to support college athletics
in the Oregon University System. The
so-called “third wave” of gaming in European-North American history,
conceptualized by gaming authority
I. Nelson Rose, reached towards a crest during the past
decade. However, the one notable
exception to this liberalizing trend is sports betting.
Nevada has 142 legal sports
books that allow wagering on professional and amateur sports (“Odds Against
College Ban in Gambling,” 1999, p. D-8).
The only amateur sporting events that sports books allow betting on are
collegiate and some Olympic sports.
Nevada’s sports books gross gambling revenues (GGR) for 1994 were $118.6
million. Gross gambling revenue is used
because it is a true measure of the economic value of sports betting. In 1998, legal bookmaking operations' gross
gambling revenue were $122.5 million (“Gross Annual Wager Supplement,” 1999,
p.49). Betting on college events
accounted for 33 percent of the total sports wagering revenue, or $40 million.
The decline in sports book retention is due in large part to increased
competition from Internet wagering on sports.
Nevada once led the world in sports betting. However, due to the Internet wagering, Costa Rica now handles
three times as many sports bets as Nevada (Miller, 2000,
p. 672). The
betting action in Nevada sports books breaks down as follows: professional and
college football combined – 39%, professional and college basketball combined –
34.5%, baseball – 23%, and hockey – 2%.
Boxing, golf, and tennis wagering make up the remaining 1.5% (Humber,
“Vegas at Odds with Gretzky,” May 7, 1988, p. A-11). These rankings are similar to the transactions handled by illegal
bookmakers; the difference is that professional football games draw an even
larger share of the illegal betting action (Smith, 1991, p. 15).
The actual wagering can
occur under a variety of circumstances.
The most common of which are: a bet between friends on an individual
game, an office pool (i.e. NCAA Men’s Basketball Tournament), fantasy football
or hockey drafts (drafting and auctioning players based on their actual
performance), in a legal sports book in the State of Nevada, or with an illegal
bookmaker or bookie. The majority of
sports betting in America occurs between friends or acquaintances and involves
relatively small amounts of money.
Another large portion of the sports betting population wagers larger
sums of money with illegal bookmakers.
From small towns to large metropolises, cities in the United States are
inundated with vast networks of illegal bookies. The total dollar volume of sports betting in this country can
only be approximated, like any illegal activity it is near impossible to
determine the actual amount of money transferred. However, the National Gambling Impact Study Commission in 1999,
estimated that the scope of illegal sports betting in the United States ranges
anywhere from $80 billion to $380 billion annually, making sports betting the
most widespread and popular form of gambling in America (NGISC, 1999, p 1.1).
REASONS
FOR SPORTS BETTING
Sports gambling
is now considered part of the American way of life. Sports betting possesses more of the characteristics which
contribute to the thrill of gambling than do other forms of gambling. People bet on sporting events for a variety
of reasons that can be grouped into two general economic categories: investment
and consumption. “Consumption” refers
to those bets made to increase the utility, or satisfaction, a person receives
from watching a sporting event; while, “investment" refers to those
activities undertaken in order to increase wealth (Ignatin, 1984, p. 170).
Sports bettors tend to be urban, male, and middle class. They are much more likely that nonbettors to
attend nightclubs, bars, operas, lectures, and museums; engage in active team
sports; go to movies or theaters, and sporting events; drink alcoholic
beverages; engage in active nonteam sports; and read newspapers or
magazines. Sports bettors spend more
time and money than nonbettors on recreation and vacation (Ignatin, 1984, p.
170). When sports bettors were asked
why they gambled, one study found the most frequently mentioned reason for
betting with friends was “to have a good time.” The reason most frequently mentioned for betting with bookies was
the “challenge.” “Excitement” was given
as a reason more often for friendly betting while “to make money” was given as
a reason for bookie betting (CRNPTG, 1976).
Conversely,
Gary Smith in his work, The ‘To Do’ Over What To Do About Sports Gambling,
offers a different approach to explaining one’s reason to gamble. In the case of sports bettors, there appear
to be four main motivations for their behavior: challenging their intellectual
and judgement capacities, the pleasure they derive out of beating the system,
wanting to make money, and sharing a feeling of camaraderie. The eager sports bettor enjoys analyzing and
interpreting any and all available information before making a choice, and then
backing it with a wager. Notably, the
sports media industry has become an enormous business in our information
society. Sports programming via the
Internet, television, radio, and print media center around handicapping
sporting events and athletes. For many
sports bettors, the challenge of making the right choice is more important than
the money; the money just represents a convenient way of keeping score (Smith,
1991, p. 18). To the sports gambler,
“…sports betting is the same in principle as anything in private enterprise,
it’s a risk, and the guy who works the hardest and is the brightest is going to
come out ahead (Dionne, 1980, p. 47).”
Sports betting is less regressive than other forms of gambling due to
its broad appeal among middle and upper income groups (Koza, “Who is Playing
What,” 1984, p. 10). It is also one of
the few forms of gambling in which the astute bettor has a reasonable chance to
win.
CHAPTER THREE:
COLLEGE SPORTS WAGERING
ILLEGAL
SPORTS BETTING AND COLLEGE ATHLETICS
Virtually, all sports
betting is done illegally and performed in a non-conspicuous manner. The explosion of interest in illegal sports
betting over the past few decades is the direct result of the same factors that
contributed to legalized betting explained in Chapter One. Additionally, one large feature that spurred
the growth of illegal sports betting in the U.S. was the rapid and radical change
in professional sports leagues, beginning in the late fifties and continuing to
the present day. Previous to this
development, the majority of professional sport franchises were positioned in
Northeastern and Midwestern American cities.
Organized crime originated in the boroughs of these highly populated
cities and crime bosses recognized a desire among the fans and people who loved
athletic events for gambling. Part of
the allure of sports betting for the casual fan was in the excitement generated
in backing the local or regional team. With so many cities now having franchises, virtually every
well-populated region has a team they can root for and bet on. The same thing can hold true for
universities and colleges around the nation.
There are schools with athletic programs in virtually every corner of
this country. Communities, along with
alumni, students, parents, and teachers follow their school’s sports with great
loyalty and affection.
Illegal bookmaking is an institution replete with social custom
and unique social interchange. Today,
illegal sports betting is a game for wise guys, and the bookmaker still goes by
the name, bookie. There is a vast
network of illegal bookies in cities around the country, with 2,000 to 3,000 in
Boston, and as many as 20,000 in New York City. Typically, each has 50 to 60 customers, works out of an apartment
or office, and has bettors who at first wager $100 or $200 on games before
working their way into the tens of thousands of dollars (Berns, “Bettor Scoffs
at Ban Idea,” 2001, p. A-6).
Most illegal bookmakers
operate on credit. By convention,
Tuesday is the day of reckoning for payments.
The bookie or his agent meets the bettor at a predetermined time and
location to square up accounts.
However, the system allows for flexibility. If the bookie-bettor relationship is longstanding and
characterized by mutual trust, accounts may be carried over until the amount
owed exceeds a certain figure. If the
bookie and bettor move in the same social circles, accounts may be squared at
irregular intervals that are mutually convenient (Lang, 1987, p. 139). Placing a bet with a bookie is traditionally
done over the phone or by a runner. The
bookie will state the point spread and the client will determine how much he or
she wants to wager. Credit is traditionally
given to faithful customers.
Betting on sports is a natural outcome of spectatorship. For many people around the country, betting
provides the thrill of participation and having a personal stake in the game’s
outcome without having to take the field or court. College sport, by virtue of media attention and the publicizing
of betting lines, has become a commodity available for purchase or mass
consumption by almost anyone or any group (Stone, 1972, p. 39).
There has always been a
powerful connection between sports and gambling that is at the same time
criticized and denied by those who profit from it. Since the creation of the point spread in the 1940’s, basketball
has been one of the most attractive propositions for gamblers. The score changes by the minute, in
increments of one, two, or three points.
Additionally, if one has a wager on a game, he can watch his fortunes
rise and fall numerous times during the course of one contest. This sort behavior is capitalized upon in
the month of March every year.
The NCAA Men’s
Basketball Tournament, also known as “March Madness” is the single biggest draw
for collegiate betting. Nevada sports
books will win an estimated $60 to $80 million this year on bets made on the
tournament. Many times that figure is
expected to be won by illegal bookies and offshore operators of Internet
betting sites (Berns, “First In Line,” 2001, p. A-1). The FBI projected that 2.5 billion dollars was illegally gambled
on the 1995 NCAA Division I Men’s Basketball Championship, second only to the
National Football League’s Super Bowl (AGA, “Facts Sheet,” 2000, online
source). Around the nation, the NCAA
Tournament offers an enticing alternative to legal betting in Nevada in the
form of brackets that follow the pairings of the teams as they advance or fall
out of contention. NCAA tournament
brackets are very popular in all social circles, especially in the form of
office pools. The amount of money and
time spent in the workplace devoted to office pools is quite significant. Worker productivity in the month of March is
presumably at a low level due to “March Madness” wagering.
CORRUPTION IN SPORTS: SPORTS WAGERING’S IMPACT ON THE
INTEGRITY OF THE GAME
Wherever one finds gambling
on athletic contests, he or she can also find the suggestion of manipulation,
victimization, and corruption. The act
of gambling on a team or individual lends itself to exploitation practices
performed by the criminal mind. The
history of corruption in sports in the U.S. is well publicized and documented,
yet it appears to be predominantly associated with the amateur athlete as
opposed to the professional athlete. To
distant themselves from sports wagering, most professional sports leagues
adopted strict rules regarding gambling and gamblers. These included bans on wagering by players, other personnel and
owners, prohibitions on dual ownership of baseball clubs and legal gambling
operations, and restricting professional teams from advertising or associating
with legal gambling enterprises (Cabot, 1999, p. 164).
The only
amateur sports bet legally in Nevada involve college athletics; Olympic
sporting events are rarely wagered upon.
It is important to note that illegal betting across the country involves
all types of amateur sports (i.e. college, high school, Olympic,
post-graduate). With the exception of
the “Chicago Black Sox Scandal of 1919,” a large majority of gambling scandals
in sports occurred on our nation’s college campuses. Basketball, especially college basketball is the one sport that
is most susceptible to corruption.
Corruption in our country’s college sports dates back to 1951, when the
City College of New York (CCNY) Men’s Basketball team was involved in a
point-shaving scandal that rocked the sporting world and academic community
forever. In the years to follow,
gambling schemes were uncovered at Seton Hall University, St. John’s
University, New York University, Columbia University, University of North
Carolina, North Carolina State, St. Joseph’s University, LaSalle University,
Mississippi State, the University of Tennessee, the University of Colorado, the
University of Connecticut, Rhode Island University, and the University of
Vermont. The most notable gambling
scandals in NCAA history include: the 1961 scandal involving schools from New
York and North Carolina; the Boston College Scandal of 1981; the Tulane Scandal
of 1985; and most recently the scandals involving Arizona State and
Northwestern Universities in the 1990’s.
Both legal and illegal sports wagering have been associated with nearly
every major collegiate sports wagering scandal.
Student-athletes act as
easy targets and are susceptible to corruption for many reasons. These may include: 1) the money and goods
that fixers promise to supply in exchange for their cooperation, 2) the players
are invariably young, and this lack of maturity may have some part in their
willingness to assume the risks entailed in illegal schemes presented to them,
and 3) many are from modest socio-economic backgrounds and lack alternative
means for earning money. College
athletes are very accessible. Fixers
try to gain access to manipulate them or pay a commission to them for
information related to their team (i.e. injury reports, morale, game plans and
discipline issues).
College basketball is more
vulnerable to corruption than college football. It is relatively hard to fix a football game because there are so
many elements at play. Basketball is
easy to manipulate because it can incorporate point-shaving tactics. The illegal practice of point shaving occurs
when one or more bribed players deliberately limit the number of points scored
to conform to the desires of corrupt gamblers.
There are technical aspects of the game of basketball that lend
themselves to point shaving. When
compared to other team sports, e.g., football or baseball, it is much easier to
manipulate the result of a basketball game in a way that defies detection by
bookmakers, coaching staffs, referees, law enforcement agencies and college
officials (Whelan, 1992, p. 12).
SPORTS
BETTING ON CAMPUS AND AMONG STUDENT-ATHLETES
Interestingly,
contemporary scholars strongly support a departure from organized crime
predominantly running all illegal book operations. Recent evidence indicates that the organized crime and sports
betting connection is not as strong as it once was (Rosecrance, 1987, p.
62). Today, there is considerable
evidence that a good number of sports betting operations originate on college
campuses and universities. A lot of the
time it is the students in the residence halls and fraternity houses acting as
the bookies, with clients being their fellow students. It is safe to say that student bookies are
present at every college, big or small, around this country. There is no dispute that the impact of
sports gambling is being felt on campuses around the nation.
In 1995, Sports
Illustrated (SI) produced a series of articles on sports gambling on
college campuses. The author noted
that, “[o]n most campuses illegal sports gambling is seldom further than a
conversation away. Somebody in the dorm
knows a bookie. Somebody in the
fraternity house knows a bookie.
Somebody in the frat is a bookie (Layden, 1995, p. 76).” Sports Illustrated reporter, Tim Layden
examined thoroughly the undergraduate sports betting environment at various
colleges and universities around the nation.
He offers a unique glimpse of what gambling on campus is really like. Layden concluded that students are not your
typical gamblers. SI found students
from wealthy and modest backgrounds alike who had thrown themselves into
betting. Betting patterns around the
country are fairly similar, with the exception of the Southeast region of the
nation where illegal wagering on college football is extremely fierce. Nevertheless, bettors do tend to have some
things in common: a degree of sports-obsessiveness and athletic past (often cut
short after high school), a community in which to share their betting tales
(usually a fraternity house or residence hall), and a little
resourcefulness. Layden writes, “They
are bright, if often naive. Put simply,
lots of college sports bettors are clever (usually fraternity jocks) who like
to watch games with a crowd and get pumped by betting on them. And they are often clueless about the realm
they have entered (Layden, 1995, p. 76).”
Most notably, he concludes that, “during two months of reporting, they
found that it was impossible to visit a campus– and they surveyed a dozen or
more – in search of organized gambling and not find a least a handful of
sophisticated bookmaking operations run by students. In addition they found nonstudent bookies, who either work the
campuses directly or use students to collect bets for their off-campus
operations (Layden, 1995, p. 76).”
Results from a
1998 study involving approximately 1,000 students at universities in the
Southeastern Conference, revealed that athletes were nearly twice as likely to
be problem gamblers as non-athletes (Saum, 1999, p. 2). Student-athletes are more prone to gambling
behavior on campus than non-student athletes for a variety of reasons, most
involving their proximity and access to sports related affairs and their
greater competitive nature. However, student-athletes
are not the only undergraduates with gambling problems. In 1996, several researchers surveyed 1,700
students from six colleges and universities in five different states (NJ, NV,
NY, OK, and TX) and found that 33 percent of males and 15 percent of females
said they gambled at least once a week.
The study also found 25 percent of males and 8 percent of females were
problem gamblers. Research done by
Howard Shaffer of the Harvard University Medical School Division on Addiction
shows that more youth are introduced to gambling through sports betting than
any other form of gambling activity (Saum, 1999, p. 2).
A NCAA
sponsored study completed by the University of Cincinnati uncovered alarming
results as well. 2,000 male
student-athletes in Division I basketball and football programs were surveyed
about NCAA rules violations. Only 684
students agreed to participate. 25%
reported that they gambled on college sports events other than their own while in
college. Four percent admitted that
they wagered on games in which they had played, and three of the athletes
(0.4%) said they changed the outcome of the game in which they participated
(Cullen, 1996, p. 8). Related research
examining gambling behavior among general undergraduate populations asked
specifically about sports betting. A
recent study surveyed 1,770 students from three Minnesota campuses. The percentage of students who have ever
engaged and who regularly engage in sports betting were strikingly similar to
the previous studies. Both the NCAA
study and the Minnesota study also found that male undergraduates participate
significantly more in sports betting that female athletes (NCAA, 1999, p.
8).
Bill Saum,
Director of Agent and Gambling Activities for the NCAA spoke with me concerning
the epidemic of gambling on college campuses.
He cites a number of reasons why sports wagering has taken off among
college students and student athletes.
·
There are many more
televised games. People like to bet on
what they can watch.
·
Many residence halls are
wired for Internet access, and college students have wide access to
computers. The Internet gives them the
opportunity to bet from the privacy of their own rooms. The use of the Internet for sports betting
is an important aspect in the investigation of sports wagering and will be
examined later in this paper.
·
College student’s access to
credit is at an all-time high. Mr. Saum
cited a recent survey of students who applied for loans which found that 65%
have credit cards, 20% have four or more credit cards, and the average credit
card balance is more than $2,200.
·
An overabundance of
information on sports handicapping is also available to students. Newspapers around the nation publish the
daily point-spreads and also run advertisements for sports touts. There is usually a 1-800 or 1-900 number to
call to listen to a recording of picks of sports teams that are “guaranteed” to
beat the published spread (W. Saum, teleconference communication, February 22,
2001).
Athletics is
part of campus life from intramurals to big time collegiate competition. At a lot of universities, the school and
surrounding community may revolve around a successful sports program. Little do administrators know that it may
also revolve around gambling activities.
In fact, a lot of the emotion attached to college sports is an outgrowth
of excessive wagering. Yet, all of the
illegal sports wagering in this country is conducted with much the same
acceptance as jaywalking: it’s not right, but nobody gets hurt.
CHAPTER FOUR:
NATIONAL COLLEGIATE
ATHLETIC ASSOCIATION
BACKGROUND
AND PURPOSE
The National
Collegiate Athletic Association (NCAA), formed in 1906, is a nonprofit,
voluntary association of more than 1,200 colleges, universities, conferences,
and organizations charged with the administration of intercollegiate
athletics. Interestingly, the NCAA
began at the encouragement of President Theodore Roosevelt to curb the numerous
injuries and deaths that were occurring from the “gang tackle” performed in collegiate
football. The sport faced extinction
from college campuses if not reformed and governed. In 1906, New York University Chancellor Henry M. MacCracken
formed the Intercollegiate Athletic Association of the United States (IAAUS). Later renamed the National Collegiate
Athletic Association, the thirteen member institution became the official
discussion group and rule-making body for collegiate athletics. Today, the membership is divided into three
legislative and competitive divisions, and the NCAA annually sponsors 81
national championships in 22 sports.
The
organizational structure of the National Collegiate Athletic Association is set
up in a hierarchical arrangement. The
Association’s Executive Committee is the highest governing body within the NCAA
and is composed of institutional chief executive officers that oversee
Association-wide issues. The Executive
Committee is charged with ensuring that each division operates consistently
within the basic purposes, fundamental policies, and general principles of the
Association. All NCAA action is derived
from the Association’s many Committees that answer directly to the Executive
Committee. The NCAA has distributed its
1,038 member schools into three different divisions, based on school and program
size. Division I-A contains the largest
schools and conferences around the country; smaller schools are distributed
down to Div. II and Div. III, respectively.
All of the legal sports betting that occurs in Nevada are among Division
I-A institutions. However, it is not
uncommon for some of the larger sports books to take wagers on significant
match-ups, such as the Division II-A Football Championship or Division III-A
Basketball Championship. This same
system holds true for women’s athletics.
Limited legal sports wagering occurs on athletic events involving
collegiate women. When there is a
notable contest (i.e. University of Tennessee versus University of Connecticut
in women’s basketball) or championship event only particular sports books will
entertain the betting public with a “posting” of the event.
THE
NCAA AND GAMBLING/SPORTS WAGERING
The National
Collegiate Athletic Association animatedly condemns any and all gambling or
wagering activity, illegal or not. The
NCAA has not addressed the subject of gambling and the dangers associated it
until relatively late in it’s almost one hundred year existence. It wasn’t until 1996 that the NCAA assigned
a staff member to look into gambling issues on a full-time basis. The NCAA did not denounce or sincerely
recognize the subjects of college basketball tournament pools and friendly
wagers among fans until that same year.
Moreover, despite the plethora of NCAA rules, there wasn’t one that made
it illegal for coaches to gamble on sports until 1996. The NCAA first addressed the problem in 1980
when it formed the NCAA Committee on Gambling.
In the years to follow it constructed numerous resolutions asking its
membership to take a strong anti-gambling stand. At the time, the NCAA recognized that gambling on college sports
was on the rise dramatically and, as a result, the opportunity for corruption
was greater.
In 1983, The
NCAA established a number of legislative initiatives regarding gambling and
college sports wagering. Resolutions
adopted by the NCAA Executive Committee called for athletes to be suspended if
observed consorting with known gamblers, for member institutions to cooperate
more fully with the NCAA anti-gambling task force, as well as for schools to
refrain from cooperating with publications that depend on pre-event publication
of point spreads for revenue. Up until
1983, strong measures such as these failed in other committees for lack of
interest.
According to
the NCAA, “the explosive growth of gambling has caused a noticeable increase in
the number of sports wagering-related cases processed by the NCAA enforcement
and student-athlete reinstatement staffs in Division I, II and III and
threatens the integrity of college sports (NCAA Official Website).” Today, the National Collegiate Athletic
Association has established a clear and concise policy on gambling. This information is contained in the NCAA’s,
Sports Wagering Information Packet, published for the 1999 – 2000
season. Selections on the NCAA position
on gambling and Bylaw 10.3, including recent interpretations, are as follows.
NCAA
Position on Gambling
The NCAA opposes all forms
of legal and illegal wagering. Sports
wagering has the potential to undermine the integrity of sports contests and
jeopardizes the welfare of student-athletes and the intercollegiate athletics
community. Sports wagering demeans the
competition and competitors alike by a message that is contrary to the purposes
and meaning of “sport.” Sports
competition should be appreciated for the inherent benefits related to participation
of student-athletes, coaches and institutions in fair contests, not the amount
of money wagered on the outcome of the competition (NCAA, 1999, p. 3).
For these
reasons, the NCAA membership has adopted specific rules prohibiting athletic
department staff members and student-athletes from engaging in gambling
activities in relation to intercollegiate or professional sporting events. The NCAA Position on Gambling was approved
by the NCAA Administration Committee on March 19, 1997. NCAA institutions are encouraged to publish
the NCAA Position on Gambling in game programs, alumni newsletters, and
employee and student-athlete handbooks.
NCAA
Bylaw 10.3: Gambling Activities
Staff members of a member
conference, staff members of the athletics department of a member institution
and student-athletes shall not knowingly: (Revised: 4/22/98 effective 8/1/98)
(a) Provide information to individuals involved in organized
gambling activities concerning intercollegiate athletics competition;
(b) Solicit a bet on any intercollegiate team:
(c) Accept a bet on any team representing this institution;
(d) Solicit or accept a bet on any intercollegiate competition
for any item (e.g., cash, shirt, dinner) that has tangible value; or (Revised:
9/15/97)
(e) Participate in any gambling activity that involves
intercollegiate athletics, through a bookmaker, a parlay card or any other
method employed by organized gambling. (Revised: 1/9/96, 1/14/97 effective
8/1/97)
The following official interpretations/confirmations also
relate to gambling activities:
· Soliciting or accepting a
bet for a material item: The provisions of NCAA Bylaw 10.3 preclude a
student-athlete from soliciting or accepting a bet for a nonmonetary material
item (e.g., shirt, dinner) that has tangible value. The Interpretations Committee noted, however, that institutions
that compete against each other may agree to participate for a tangible item
(e.g., governors cup), provided no student-athletes receive any tangible item.
· Gambling on professional
sports contest: The prohibition against student-athletes and athletics
department staff members participating in gambling activities associated with
professional sports events is applicable only to those sports in which the
Association conducts championship competition, Division I-A football and
emerging sports. Accordingly, the
provisions of Bylaw 10.3 do not apply to other types of sports wagering (e.g.,
horse racing, auto racing, boxing).
· Printing of point spread
information in institutional publications: According to the provisions of Bylaw
12.01.2 (line of demarcation), it would not be permissible for a member
institution to publish in its game program an advertisement that provides
specific point spread information regarding professional sports contests.
· Long-standing Tradition:
The provisions of NCAA Bylaw 10.3 are not applicable to a long-standing
demonstrated tradition in a particular sport in which student-athletes from
involved institutions exchange a tangible (e.g., exchanging of shirts in the
sport of rowing) contingent on the outcome of a competition, provided such
activity is approved by the involved institutions. [Reference: 10.3 (gambling
activities) and NCAA Interpretations Committee 11/26/96, Item No. 10] (NCAA,
1999, pp. 4-5).
Like many organizations in the United States, the NCAA has a
clear, direct policy regarding gambling.
The NCAA is explicit in its wording; they prohibit any form of legal or
illegal sports wagering. The
motivations behind the NCAA’s stance on the sports betting issue are as clear
as their policy. Sports betting has the
potential to undermine the integrity of sports contests and jeopardize the
welfare of the student-athlete and the intercollegiate athletics community. The NCAA’s Bill Saum in his March 2, 2001
testimony before the Judiciary Committee of the Nevada State Assembly said,
“the influence of sports wagering is far reaching, and sports organizations
continually live in fear that sports wagering will infiltrate and undermine the
contest itself (Saum, 3/2/01, p. 2).”
The NCAA in its hopes to thwart gambling among its members and betting
on their institutions has turned to education as their best mechanism to combat
this activity. The NCAA sponsors
educational programs that provide assistance to campus administrators to conduct
sports wagering workshops. They also
broadcast anti-sports wagering commercials and announcements during college
bowl season and “March Madness.” The
NCAA in its efforts to curb gambling has adopted a number of initiatives aimed
at the problem this past year, the NCAA has:
·
Distributed “Don’t Bet on
It” sports wagering educational booklets to all NCAA member institutions. This simple to read publication educates the
students about the dangers of sports wagering and acquaints them with good
financial management information.
·