Since news broke recently of a sports betting scandal involving certain NBA players and coaching staff sharing inside information with friends for the purpose of placing prop bets, there has been a litany of mainstream media articles insisting that the apparent surge in such cases in recent years is a direct result of US states legalizing sports betting.
The inference is that, as sports betting becomes “normalized” across the country, the temptation for those involved in professional sport to rig the system can become too great to ignore, and that the proliferation of legal operators provides the platforms from which to do so.
It’s an obvious link to make, of course, and the sheer number of cases making headlines this year alone is undeniable: from dozens of college basketball players found betting on their own [under]performances to a handful of NFL stars detected betting on games and more.
But it’s a link that is deeply flawed.
The theory of cause and effect states that every event (effect) results from a preceding action or condition (cause), implying a predictable relationship between actions and outcomes. In this case, it is implied that recent instances of gambling infractions by athletes (effect) – be they violations of a code’s anti-gambling policies or more serious fraud cases like those referenced earlier – have resulted from the growth of the legal sports betting industry, aided by the widespread availability of sportsbooks.
There are two problems with this argument. One, it presumes in the first place that there has in fact been significant growth in sports betting, when studies suggest that a large percentage of those betting on regulated sites had previously used illegal sites before the industry was regulated. Needless to say, sports betting in the US is nothing new, as evidenced by the estimated US$84 billion wagered on illegal sites annually prior to the Supreme court striking down the Professional and Amateur Sports Protection Act (PASPA) in 2018, as per a recent study by the American Gaming Association. A 2016 report put this number at almost US$200 billion.
And two, it ignores the real “cause” in the argument as to why so many cases of fraudulent betting have emerged in recent years – that they are now being detected and reported by licensed operators, who have a vested interest in protecting their businesses from this form of illegal advantage play.
In other words, a legal sports betting industry is not the reason for this apparent surge in illegal conduct, but in many instances it is the reason we know about it.
Unfortunately, it is this common misconception of cause and effect that continues to hold back so many jurisdictions across the Asia-Pacific region from legalizing and regulating gambling in general – particularly in the online space. And it’s why the recent move by authorities in New Zealand to develop an online gambling framework and issue the country’s first iGaming licenses is so refreshing in its recognition of the modern-day reality.
As Internal Affairs Minister Brooke van Velden explained, “My goal is not to increase the amount of gambling that is happening online, but to enable New Zealanders who wish to play casino games online to do so more safely than they can today.
“Currently, New Zealanders can and do gamble on thousands of offshore gambling websites. By introducing a regulatory system my intention is to channel customers towards … licensed operators.”
