Sports and betting: economic and social impacts

¶ … sports betting. Discussed are the problems with the betting, players getting gifts from betting agents, and effect of sports betting on the economy. Seven sources are used.

Sports and Betting

More Americans play more sports than in any other country in the world. Moreover, we watch more sports than anyone else on earth. Football and figure skating, two sports that could not be more different have drawn the biggest TV audiences in history. Sports bind us together as Americans. It has the ability more than just about anything else to tear down the barriers of race, class, gender, politics and geography (McDonald 1998). Sports is part of our national culture. It's part of our national conversation. A waitress at the local cafe talks Friday-night football with the cop and the banker. A Democratic gardener, trimming the greens at the country club, discusses golf swings or last week's tournament with a Republican attorney. Soccer parents talk goalies and the high school jocks talk about steroids and scholarships (McDonald 1998).

Sports and betting have gone hand in hand for centuries throughout the world. People in the United States have been gambling on sports since there has been organized sports, and some claim it can be traced back in this country for roughly four hundred years.

Americans bet billions of dollars, legally and illegally, on sports every year. It has become a huge underground part of the economy. Ninety-five percent of sports gambling in the United States occurs illegally. It's untaxed and unregulated. Nevada is the only state where college sports betting is legal (http://www.unr.edu/alumni/profile.asp?ID=5).

Sports history is filled with scandals. Many of them read like a novel or Hollywood script and some have actually been immortalized on films, such as the 1919 fix of the World Series, known infamously as the Black Sox Scandal (Krystal 2002). "Baseball's darling "Charlie Hustle" Pete Rose was banned from baseball after gambling on his own team. The most timely example, however, is that of the case of the alleged pressure on a French figure skating judge to award the gold medal to the Russian doubles team rather than the Canadians. The problems associated with sports, however, reach beyond the professional level in the form of gambling on college athletics"(Krystal 2002). Sports betting has become a great threat to college athletes, as illegal college bookies thrive on college campuses around the country. They threaten to take down student athletes in violating both NCAA regulations and state bans on gambling according to testimonies heard before the House of Representative's Committee on Energy and Commerce (Krystal 2002). There are stories of athletes losing scholarships and even expulsion, but the most dangerous effect of all of this is the damage to the true spirit of the game. Sports are the ultimate culmination of guts and glory for athletes and spectators alike, and allowing that spirit to be marred and endangered by gamblers is unpardonable (Krystal 2002).

College athletes are not paid salaries to play as are professional athletes. The fact that others profit or lose money based on their performance puts undue pressure on them to perform beyond reasonable expectations, whether they are in on the gambling or not. And in cases where athletes themselves are in on the wagering, the outcome of the game already has been predetermined. This destroys the spontaneity and excitement of a fair match. "Coaches and players may become the target of verbal and even physical confrontations on the street or even in the arena in encountering an irate gambler who lost money in a wager" (Krystal). For athletes and spectators alike, sports are the ultimate culmination of guts and glory. Allowing that pure embodiment of spirit to be debased and endangered by gamblers is unpardonable (Krystal 2002).

A recent study by Jeremiah Weinstock, a graduate student in psychology at the University of Memphis, found that possibly one out of every four male college athletes are engaging in illegal sports betting. And one in 20 places bets directly through illegal bookies. Moreover, the study found that sports wagering activity is actually higher among ordinary students, as much as 39% among male non-student-athletes. However, there wasn't any statistical difference between athletes and non-athletes and their involvement with bookies (Strow 2000). Weinstock's study involved three Midwestern universities. He surveyed 648 student-athletes and 1,035 students, both male and female, A full seventy percent of the student-athletes at the three universities were surveyed (Strow 200).

Student-athletes are very similar to students [in gambling behavior], " said James Whelan, a professor of psychology at the University of Memphis and co-director of the university's Institute for Gambling Research. "We're not looking at something that's a problem for them just because they're student-athletes... it's something that's an issue for older adolescents and younger adults. We need to look at what this means for people in this age group, not just to punish people and make prohibitions just because they happen to be athletes" (Strow 2000). Although the findings are similar to other studies, such as at the University of Cincinnati and the University of Michigan, Weinstock's study is broader than any previous look at the wagering of student-athletes and drew an especially heavy response rate from the athletes. The study also stated that 12% of male student-athletes, roughly the same portion as non-athletes, showed distinct signs of problem gambling. Moreover, five percent of the athletes surveyed demonstrated signs of pathological gambling disorders (Strow 2000).

As the dust settles from the indictment of former University of Michigan basketball booster Ed Martin, who is accused of loaning more than $600,000 to former Wolverine athletes, it is likely the allegations could have crippling effects on Michigan athletics. Indiana University professor Murray Sperber, who has written several books on the demise of college athletics, said the University's reputation would be seriously harmed if the allegations made in the indictment of Martin were proven to be true. "This really hurts the University of Michigan," Sperber said. "Schools like Michigan...have a lot at stake. You are very well pleased to be one of the public Ivies -- this kind of stuff brings you down to Michigan State's level" (Gopal 2002).

However, Sperber said Michigan is not the only school that has experienced a problem with college players accepting money from boosters. "It is going on in every Big 10 university," he added. "Coaches always deny it. What usually comes out is that the coaches know much more about it then they casually claim" (Gopal 2002). One example is Purdue University's basketball program. It came under scrutiny in 1999 for a number of violations involving loans given to a recruit as well as financial assistance provided by an Indianapolis businessman to the mother of a Purdue player. Other incidents include the University of Dayton's basketball team that was slapped with three years' probation the following season for similar violations, and the University of Alabama's football program was hit with massive sanctions earlier this year, including five years' probation, a two-year ban from postseason bowl games and massive scholarship reductions. The extensive sanctions were issued in part because the Crimson Tide fell under the category of repeat offenders, which left it subject to harsher penalties than Michigan may be facing (Gopal 2002).

The NCAA has put new measures into effect to prevent future exchanges of money between players and boosters, however, Sperber does not feel regulations are enough. "Boosters have been giving money to athletics for a very long time. As a result, it got really out of control in the 1980s, and the NCAA put in very strict regulations," Sperber said. "There are hundreds of ways around it. So many of them, especially inner-city players, have street agents" (Gopal 2002). A street agent such as Ed Martin, is a person not affiliated with the University who gives college players gifts or money. One of the most infamous street agents is Rob Johnson. His involvement with the basketball programs at Texas A&M University and Syracuse University ended with both schools being penalized by the NCAA in the early 1990s (Gopal 2002). However, the violations tied to Johnson, including a $125 loan to a Texas A&M player, pale in comparison to the huge sums of money that apparently were given to Michigan players. Sperber suggests that universities consider paying college athletes as a way to mend the problem. "I guess one of the solutions is to pay college athletes and get the money above the table. The Detroit Pistons pay a lot more than $600, 000 for college athletes. Athletic departments are not hard enough on these boosters and particularly the coaches, and university administrators aren't tough enough on athletic departments," Sperber said (Gopal 2002).

Gambling and betting on sports can be traced back to the Greeks and Roman days, if not before. Risk is the essence of sports, and so is gambling. So it isn't surprising to find the two hand in hand. But there are loud cries from politicians to pass bills against sport betting. The motivation for the bill can be traced to the Conservative Right and you can trace their thinking all the way back to the colonial period and the Puritans who tried to forbid gambling in New England. "The arguments we're hearing in 2001 are exactly what moral leaders argued about in 1700" (http://www.unr.edu/alumni/profile.asp?ID=5).Manyfeel that sports gambling is a legal, moral and reasonable form of recreation that should be regulated and taxed. Furthermore many are critical of politicians from states with lotteries who advocate bans on sports betting. "The lottery is nothing more than the old illegal numbers game that they used to run in the poorer neighborhoods of the big East Coast cities," he said. "Thirty-seven state governments have lotteries. It's a tax upon those who are stupid enough to play those games" says Dick Davies (http://www.unr.edu/alumni/profile.asp?ID=5).

The National Collegiate Athletic Association officials urge to politicians to sponsor legislation that would eliminate wagering on college games in an attempt to cut down on the gambling problem on America's college campuses has heated up debates across the country (Schouten 1999). The NCAA's effort has set off a bitter political fight. Casino industry advocates from Nevada, the only state where betting on college sports is legal, argue that the NCAA is misguided in attacking the state's sports books, which they say account for a tiny fraction of sports wagering in this country. The NCAA counters that any government endorsement of collegiate sports betting could compromise the integrity of the sport (Schouten 1999). Says Davies, "Most of those folks are very conservative politically and don't understand the nature of sports gambling and see it as evil. They are fearful of fixed games but are unwilling to admit that Nevada's books are the primary defense against them" (http://www.unr.edu/alumni/profile.asp?ID=5)."We think there is betting on every college campus in this country, " said Doris Dixon, director of federal relations for the NCAA. "The numbers of betting scandals that involve point shaving and game fixing in the 1990s equal the number for every other decade combined" (Schouten 1999). But by all accounts, Nevada's sports betting represents a small fraction of sports wagering nationwide. Nevada's sports books handled about $2.3 billion in legal bets on professional and amateur athletics last year. That is dwarfed by the illegal sports betting nationwide which gambling experts estimate ranges from $40 billion to $400 billion a year (Schouten 1999).