Less is more, sometimes. Just not in the integrity-monitoring business.
The NCAA’s recent push to ban college player prop betting and the NBA’s flirtation with similar restrictions in the wake of the Jontay Porter scandal is intended to prevent future incidents.
However, those efforts could also make it more difficult for the watchdogs of the legal sports betting world to sound the alarm on any funny business, according to a few of those watchdogs.
“By banning those props you’re pushing more activity and engagement to offshore, underground markets where that lacks visibility, that lacks collaboration, that lacks access to data,” said Scott Sadin, chief operating officer of Integrity Compliance 360 (IC360), during the recent SBC Summit North America conference in New Jersey.
IC360 is the product of the recent merger of U.S. Integrity and Odds On Compliance, and the new entity works with around 120 sportsbooks and 145 sports properties around the world, Sadin said.
The company says it uses data from those operators and leagues to build “a benchmark of normal betting activity,” which can then be used to detect suspicious wagering when activity deviates from those patterns.
But if props or other betting markets are banned, there's no data. And if there's no data, there's no insight and no way of knowing if something fish is happening.
“Our system benefits from engagement from sportsbook operators giving us access to wagers, giving us access to odds,” Sadin said. “It benefits from working collaboratively with sports properties, talking about information and injuries and things of that nature. By banning them altogether we’re going to lack the data access, we’re going to lack the transparency necessary in order to make sure we’re detecting [incidents] in as close to real-time as possible.”
Flying blind
The comments highlight the predicament that the NBA and NCAA are in, and they may not be alone.
Bad press tied to sports betting could convince league leaders they need to take some kind of action, even if that action makes it harder to detect the wrongdoing they want uncovered in the first place.
For the NBA, the league is reportedly mulling over a variety of options with sportsbook partners post-Porter, including measures as drastic as banning bets on the “Under” on a player prop. The NCAA, meanwhile, is lobbying state regulators to ban college player props to curb student-athlete harassment and avoid misuse of inside information, among other concerns.
Yet sports betting watchdogs can only bark when they see something, and they may only see something if it is within a regulated environment. Removing player props or other markets from legal sportsbooks doesn’t guarantee they won’t be offered in the illegal world, but it does guarantee that if they are offered, watchdogs will be blind.
Integrity monitors such as IC360 are also crucial to getting the word out about suspicious betting patterns and ultimately uncovering what has happened.
In Ontario, where Porter formerly played with the Toronto Raptors, the local regulator said the allegations were identified “because regulated markets, like Ontario’s, require online gaming companies and independent integrity monitors to actively monitor and report suspicious betting, which then allows sports leagues, regulators, and law enforcement to respond appropriately.”
Lessons learned abroad
Sadin’s concerns about banning props or other markets were shared by Matt Fowler, head of global operations for the International Betting Integrity Association, whose sportsbook partners account for around $300 billion in total wagering every year.
According to Fowler, the IBIA is often asked about how to go after unregulated sports betting.
“Our answer’s always been, well, you make the regulated market as attractive as possible,” Fowler said during the SBC panel. “And a large part of that is a broad market offering, because demand will be met elsewhere. That’s what our experience tells us internationally.”
Fowler said in the United Kingdom, which allows operators to offer a “very liberal” sports betting product, the rate of players using regulated sportsbooks is around 97%. In Germany, he said, there are restrictions on certain betting markets involving soccer and tennis, and the country has a channelization rate of approximately 64%.
“I think there is a danger where you end up with the worst of both worlds, in that the activity is still taking place, the regulators are losing their tax dollars because the money is leaking offshore, but also the activity is not brought into the light by the integrity frameworks that we have here in the U.S., which by and large are very good,” Fowler said.
The IBIA also reviewed approximately 650,000 sporting events its sportsbook partners offered for wagering in a year and found that 99.96% had no suspicious betting associated with them. That number is consistent across the industry, Fowler said.
“Demand will always be met elsewhere,” he said. “If there’s too much restriction in the regulated market, or a market isn’t regulated, the activity seeps offshore. Prohibition really doesn’t work.”
Despite the best efforts of happy New York Rangers fans clogging traffic last night, I have made it to #sbcsummitnorthamerica in New Jersey. First panel of the day stars BetMGM CEO Adam Greenblatt. pic.twitter.com/YbsbmmcGkK
— Geoff Zochodne (@GeoffZochodne) May 8, 2024
The anti-prohibition stance was not exclusive to Fowler and Sadin’s panel. During an earlier SBC discussion, Jon Steinbrecher, commissioner of the Mid-American Conference (MAC), told the audience he is “not a big prohibition guy.”
“My concern is let’s not push it underground,” Steinbrecher said. “And how do we make sure we keep things above board because that’s where we’re able to regulate it or able to discern if there are problems involved.”
Some of the wagering happening on college player props in the legal sports betting market was doubtlessly happening in the illegal one before the 2018 U.S. Supreme Court decision that freed up more states to authorize event wagering.
Even though that activity may be relatively small — the Ohio Casino Control Commission found college player prop wagering accounted for about 1.35% of the state's total sportsbook handle in 2023 — it could be welcomed offshore with open arms.
The same could be said for smaller NBA prop betting markets. BetMGM CEO Adam Greenblatt told the SBC conference that "if we are so naive to believe that the ‘Under’ is not available in the illegal market, then we are misguided."
It's not all rigged
The NBA and NCAA are aware of the risk of pushing betting activity toward offshore or illegal bookmakers if certain wagering markets are banned. Yet the other concerns the leagues have may trump those worries, and prompt them to pursue restrictions anyway.
Ironically, the integrity monitoring that makes it possible to detect illicit wagering activity is also helping to generate the dark headlines that could force leagues to push for changes to sportsbook menus.
So, while integrity monitors like IC360 and the IBIA see legal sports betting as working, the fact that it does work means you are going to get news that makes it look like the problem, rather than a solution.
“I think given the recent discourse you’d be forgiven for thinking there are fixed games all over the place,” Fowler said. “The evidence says that isn’t true.”
Keeping everyone honest
With all that said, the recent burst of sports betting-related controversies is just that, recent. It could be that the news about athletes getting caught wagering on their teams or leagues, and the punishments handed down, act as a deterrent.
Porter, for example, was banned from the NBA; that could be enough to convince other athletes to better learn the rules and follow them.
“We want honest people to stay honest,” said Ed Martin, president of the Sports Betting Regulators Association, who moderated the SBC panel featuring Fowler and Sadin.
“The fact that there’s monitoring going on, there’s background checks going on, that’s a deterrent,” Martin added. “The fact that there’s a whole illegal market that’s still out there, that’s an encouragement in the wrong direction.”
