Mlb Gambling Scandal

The curse of the Black Sox The Black Sox scandal has become arguably the best-known example combining sports and gambling for multiple reasons: In tainting baseball, it altered the image of far and away the nation’s most popular sport at the time. It involved corruption on the sport’s highest stage, the World Series. Pete Rose: Betting on baseball was 'the only mistake I've ever made in my life' Dave Clark, Cincinnati Enquirer A canceled wedding left a $5,000 catering deposit. May 01, 2020 On August 24th, 1989, Major League Baseball banned Pete Rose after an investigation concluded the former Cincinnati Reds manager bet on baseball. Sports Illustrated is opening up the SI Vault.

During the 2017 World Series, a Las Vegas bettor won $14 Million by going six-for-six in his “let it ride” World Series wagers. That is, he chose the winning team in each of the first six games, then rolled his winnings into the next game’s bet. Rather than risk it all on the Dodgers or Astros in Game 7, the anonymous bettor walked away with his cash in hand.

What happened then could only happen in Vegas. On May 14, 2018, the United States Supreme Court found the Professional and Amateur Sports Protection Act (PASPA), the federal law prohibiting states from authorizing sports betting, to be unconstitutional, returning to the states the power to authorize and regulate sports betting. The expectation was that states would rush to introduce legislation to legalize sports betting to take advantage of the revenue stream it would create. However, legislation has come as more of a trickle than a waterfall.

Still, Major League Baseball is expecting the legalization of sports betting to engage a new generation of fans and forever change the way we watch the game.

For MLB, legalized sports gambling is a double-edged sword pitting an increase in fan engagement against the possibility of a breach of the game’s integrity. Baseball’s oft-criticized slow pace of play makes the sport perfect for proposition—or “prop”— bets; these are in-game wagers made on the occurrence or non-occurrence of an event not tied directly to the final outcome of the game. For example, will the next pitch be a ball or a strike? Will Mike Trout get a hit this inning?

“There are definitely some positives to come from legalized sports betting, including engagement of our fans in more diverse ways and reaching out to people who might not otherwise be fans who are fans of betting,” MLB deputy general counsel Bryan Seeley said. “Imagine a game that is not competitive in the late innings but continues to attract people’s interest because they can engage with that game through sports betting.”

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Yet as of May 2019, just eight states, plus Washington, D.C., had fully legalized sports betting. Three states—Mississippi, New Mexico and Rhode Island—require bets to be made in person at a casino. Five others—Delaware, Pennsylvania, Nevada, New Jersey and West Virginia, along with D.C.—have authorized mobile and online betting, but only Nevada and New Jersey had put that into practice. (Note that only Pennsylvania, among states with legalized sports betting, has an MLB team.)

Twenty-nine other states have introduced, but not passed, sports betting bills, with bills in Indiana, Iowa and Montana awaiting governor approval.

So what does this mean for the pie-in-the-sky experience MLB wants for its fans? Right now, it doesn’t exist. Only those in New Jersey or Nevada can watch a baseball game at home and make bets during the game. Pennsylvania has set July 15 as the date that online and mobile wagering will go live in the state, which will allow fans at both Phillies and Pirates games to make bets from the bleachers. D.C. should have online gaming on track by the fall, allowing Nationals fans to do the same.

“We are out there lobbying and we have every state trying to get bills passed, but it’s complicated,” MLB executive vice president of gaming Kenny Gersh said. “Each state is different, but we are hoping that in the next few years, it will be widespread.”

Irony abounds with MLB’s vision for legalized sports betting nationwide. After all, the office of the commissioner was created exactly 100 years ago in response to a betting scandal. Kenesaw Mountain Landis was a federal judge at the time of the 1919 Black Sox Scandal, in which eight players from the White Sox infamously conspired to throw the World Series against the Reds.

In 1920, Landis was appointed baseball’s first commissioner and made it his mission to rid baseball of its bad seeds. He implemented MLB’s Rule 21 in the early 1920s and it is still posted today in every clubhouse in baseball:

Any player, umpire, or club or league official or employee, who shall bet any sum whatsoever upon any baseball game in connection with which the bettor has a duty to perform, shall be declared permanently ineligible.

Commissioner Rob Manfred has made it clear his goals are the same. “Our most important priority is protecting the integrity of our games,” he said following the PASPA decision. “We will continue to support legislation that creates airtight coordination and partnerships between the states, the casino operators and the governing bodies in sports toward that goal.”

MLB has petitioned each state in the hopes that their gambling legislation will include the “six pillars” that MLB has deemed critical to maintaining the integrity of the game. MLB wants each state to require that bookmakers use official league data to settle bets, cooperate with league investigations, share real-time betting information with the league, immediately report suspicious betting activity to the league, pay the league a royalty of .25 percent of the total amount wagered on MLB games and, finally, provide an opt-out clause through which the league can prohibit certain types of bets on certain events.

Because each individual state can decide which, if any, of these tenets it wants to enforce, MLB is also in favor of a bipartisan bill introduced by Democratic Senator Charles Schumer and Republican Senator Orrin Hatch in December 2018 that would require the U.S. Justice Department to set minimum standards for state regulation of sports betting.

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“We don’t want to see a race to the bottom where certain states decide that less regulation is going to mean more to their bottom line,” Seeley said. “We think there should be a floor. States should have to enact certain provisions to protect the integrity of the game.”

When it comes to integrity, other leagues have expressed serious concerns about prop bets, the precise type of wager MLB is leaning on to create more fan engagement. Prop bets fundamentally pose a significantly more serious security risk than moneyline wagers, or bets tied solely to the outcome of the game, because individual players are more easily influenced than the end result of an entire game. NFL executive VP Jocelyn Moore testified before a U.S. House of Representatives committee in September 2018, proposing that Congress allow individual sports leagues to ban prop bets.

“Examples might range from the number of passing yards by a quarterback in a football game or the number of points or rebounds by a team during a quarter of a basketball game,” she testified. “These types of bets are significantly more susceptible to match-fixing efforts, and are therefore a source of concern to sports leagues, individual teams and the athletes who compete.”

In baseball, we’ve all seen big leaguers brought to their knees by curveballs they were desperately trying to hit. How different would it look if a player swung through a pitch on purpose? In the big leagues, where the league minimum salary is $550,000 and the average is $4.52 million, one would hope players would be sufficiently incentivized not to take a bribe. But it is a risk MLB is willing to take to boost fan interaction and engagement.

Last November, MLB became the third U.S. professional sports league to partner with MGM Resorts International, behind the NBA in June and the NHL in October. While MGM is not the only operator to have access to MLB’s official data, MGM does have exclusive access to advanced statistics, including exit velocities, route efficiency and speed on the bases. According to Scott Butera, MGM’s president of interactive gaming, the casino plans to use this unique data to create an entertainment experience surrounding betting in the United States that will differentiate it from Europe’s more transactional model.

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“The traditional sports bettor is someone who comes in pre-match, bets a lot of money, is slouched over their chair with a cigar and a newspaper, but that’s not where things are going,” Butera said. “It’s much more a millennial entertainment experience now, and it’s all about tying sports betting into a whole way of consuming sports as a means of entertainment.”

MLB and MGM see eye-to-eye on the potential for the prop bet to enhance that entertainment experience and engage fans, and MGM’s content will reflect that, even in states that don’t allow sports betting. MGM and MLB are developing a free-to-play app for use in states that do not yet have legalized betting, or for use as an intro to betting for those not yet ready to wager real money.

“The idea is to create engaging sports-betting products in a free-to-play environment so people who either don’t want to bet or can’t legally bet can understand what it’s like,” Gersh said. “For us, it’s about engagement with the free-to-play app, so that’s a win, and if it drives people to bet and it creates more engagement, that’s great.”


The free-to-play app is also not without a revenue stream. As Butera often notes, “Fortnite is free-to-play and makes $1 billion per year.”

It’s not surprising, then, that projected league revenues due to legalized gaming are astronomical. A study released in June 2018 by the American Gaming Association and the data analytics giant Nielsen took into account both direct revenue sources from betting operator investments in the leagues through advertising, sponsorship and data fees and indirect revenue sources generated by an increase in the consumption of sports due to betting activity. According to the study, the four major U.S. sports leagues stand to make a combined $4.23 billion per year from legalized betting, with MLB taking home $1.1 billion.

Legalized betting through sports books like MGM, FanDuel and DraftKings is also considerably safer than bets made before PASPA was overturned, when sports bettors were placing wagers all across the country whether they were in a legalized state or not. Bets made through bookies or with an offshore website are inherently dangerous.

“A legal betting marketplace provides a guarantee of the financial stability and suitability of the betting company,” sports betting attorney Daniel Wallach said. “There is no recourse for a bettor with a bookie or an offshore sports book if the company goes belly-up or the bookie disappears. And there are infinitely more consumer protections to safeguard bettors and to identify and help those who are getting in over their heads.”

Legal sports books also monitor the kind of suspicious activity about which MLB is most concerned: anything that could indicate the outcome of a sporting event has been influenced in some way. “If we normally take around 200 bets on a particular event, and all of a sudden we’re taking 1,000 bets and the handle is $10,000 instead of $800, we look into it straight away,” FanDuel director of trading John Sheeran said. FanDuel has been monitoring their European betting markets since 2002.

Like all of the other licensed sports books operating in the U.S., FanDuel monitors every single bet they offer and any sign of an integrity issue is raised immediately within the company and brought to the attention of other operators, state regulators and the governing body of the involved sport. “We know what it looks like,” Sheeran said. “We are very much aware that any bad news in terms of integrity is not just bad news for the leagues. It’s also bad for us and bad for legislation on a state-by-state basis.”

For now, it is a waiting game for MLB and its fans as the states work through their legislative processes and make their decisions about the extent to which they will legalize sports betting, if at all. “I think we are in the second inning of a nine-inning game in terms of what sports betting is going to look like in this country,” Seeley said. “I think a lot of people thought after the Supreme Court opinion that we would quickly advance to the sixth and seventh inning, but we just haven’t. Will the later innings be faster? I think they’re likely to be, because states look at what other states have done.”

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.

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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.”

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.