As much as I am enthralled by the NBA playoffs, I am also worried by the growing prominence of betting in professional basketball. Wagering on the sport is becoming more important than the sport itself and to the detriment of the competition.
I don’t think sports betting should be illegal, as I believe consenting adults should be free to engage in capitalist acts — and besides, black-market betting would occur anyway. But increasingly betting is an integral part of the NBA fan experience, in much the same way it is the main reason people go to the racetrack.
The Capital One Arena, home of the Washington Wizards, is the first professional U.S. sports arena to create a betting parlor right inside. The ESPN web site is unabashed in discussing betting odds on the games, and on TNT, playoff-game halftime reports now consider betting odds as well.
The backdrop is that in 2018 the Supreme Court struck down federal restrictions on sports betting, clearing the way for states to allow the practice. State laws vary, and even when sports betting is legal, it may be restricted to casinos or to mobile devices. But the trend is to allow more betting, not less.
One worry is that open betting will increase the incentives for corruption. In professional tennis, for instance, Europol has reported that organized crime is “heavily involved” in the sport. Just last week French police questioned one player about match-fixing at last year’s French Open.
Obviously fixing matches happens with illegal betting too, but it is likely there will be more betting, and thus a greater temptation to throw games, when gambling is embraced and marketed by the sport in question. If nothing else, greater market liquidity will mean gangsters can get better odds — and it will push them out of their traditional roles as (neutral) bookmakers.
Basketball is a team game, so it is harder to throw or fix than a tennis match. Still, a clumsy foul or two in the last minute could alter the point spread without affecting the final result (in fact, one of the most famous such scandals in U.S. sports involved a college basketball team). Corrupt gamblers might find the lower-paid referees to be easier targets yet, or players and referees would simply pass along inside information about likely outcomes. Viewers who see betting discussed during the halftime show will have their doubts, rational or not, about the integrity of play.
A conservative estimate is that sports betting in the U.S., both legal and illegal, amounts to about $150 billion a year. How much of that is on basketball is an open question, but the NBA generates about $8 billion of revenue a year. It is quite possible that betting on the NBA already generates more revenue than the NBA itself, so integrating betting money into the sport could have a major influence.
The appeal of all this betting money brings me to my second worry: That the NBA, for commercial reasons, will create more bettable events, such as a midseason tournament. Tennis is well-suited for betting (and corruption) because there are so many discrete wins and losses distributed across games, sets, matches and tournaments. Very frequently something decisive is on the line.
I prefer the longer story arc of a basketball season. Unlike the French Open, which takes place over the course of two weeks, the NBA season is nine months long and the ongoing stories often are the relatively small events, understood primarily by the hardcore fans. That requires more patience, but it makes for a richer long-term narrative.
There are some upsides to integrating betting (and betting revenue) into the NBA. It might help more people learn about math and statistics. Betting for many people is fun and taxes on betting revenue might help fund state and local governments. The greater availability of sports betting might increase interest in prediction markets more generally, which would be a good thing. Betting revenue, unlike television revenue, is less dependent on superstars and that might make the sport more egalitarian. And perhaps without betting revenue, the NBA will lose some ground to rapidly growing esports.
Still, the U.S. has a long history of keeping professional betting functionally separate from its major sports — and that formula has served it relatively well. Is that resistance fading? Besides the NBA, Major League Baseball, which has worked so hard to separate itself from gambling, is succumbing to the temptation of betting revenue.
Again, the question is not whether sports betting should be prohibited. It’s how much official sanction it should receive. What would you think of a university that allowed betting on which students passed their exams? Like schools, sports leagues play roles as rule-setters and impartial referees. Maintaining that role is more important than pursuing the gamification of everything.
Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include “Big Business: A Love Letter to an American Anti-Hero.”
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