The first Super Bowl of the online betting era is upon us, and it’s going to be wild.
A decade ago, one knowledgeable authority had deep reservations about the idea of the National Football League ever embracing legalized gambling. It would create a corrosive atmosphere in which every penalty or dropped pass—the normal ebbs and flows of games—“inevitably will fuel speculation, distrust, and accusations of point-shaving or game-fixing.” The moralist was none other than NFL Commissioner Roger Goodell, declaring the league’s opposition to expanding sports bookmaking outside of Nevada.
The position was born, in part, out of experience. In 1946 the league learned just before the championship game that two players from the New York Giants had been offered bribes to throw the game to the Chicago Bears. (One of them was benched for the game, and both were later suspended; the Bears won, 24-14.) Since then the league had periodically been forced to suspend players whose associations with gamblers raised the existential issue of the game’s integrity. “We should not gamble with our children’s heroes,” Goodell’s predecessor, Paul Tagliabue, told Congress in 1991.
If all that sounds starchy or quaint, perhaps it’s because the league today isn’t just gambling with those heroes—it’s turning them into a kind of human inventory for an ever-expanding array of bets hyped in commercials and pumped to smartphones during every game. Since May 2018, when the U.S. Supreme Court overturned the ban Goodell once favored, sports betting has been legalized in more than two dozen states, plus Washington, D.C. More than 100 million Americans now live in places where they can legally wager on the Feb. 13 Super Bowl. What’s on offer isn’t just the usual bets about who will win or by how many points. Heavily marketed apps such as DraftKings and FanDuel will let Super Bowl viewers bet, during the game, on a nacho platter of options—things like whether Cincinnati Bengals quarterback Joe Burrow’s first pass will be complete or incomplete, which player will commit the first turnover, and what color of Gatorade will be poured on the winning coach’s head.
The speed with which the NFL—along with every major American professional league and the National Collegiate Athletic Association—has embraced activities it previously shunned has been breathtaking. Major League Baseball, an early investor in DraftKings Inc., is talking up the potential for in-game bets to drive fan engagement. Major colleges are entering into marketing partnerships with sportsbooks. An email last month from the Louisiana State University athletics department to supporters, including students, urged them to download the Caesars Sportsbook app. “Your App is Ready, Louisiana,” the email said, providing a link to a promotional code that offered a $300 one-time bonus after an initial bet of $20.
Whatever Goodell’s initial skepticism, the NFL is now all in. Dallas Cowboys owner Jerry Jones and New England Patriots owner Robert Kraft both invested in DraftKings. Celebrities like Ben Affleck and Jamie Foxx headline betting ads shown during games. At a half-dozen NFL stadiums, fans can watch the action—and bet on their phones—from lounges sponsored by the apps. Alas, in California, where the Los Angeles Rams will meet the Bengals at SoFi Stadium in Inglewood in Super Bowl LVI, a November ballot fight looms and online sports betting has yet to be legalized.
The league says it’s taken strong measures to counter any corruption or threats to the game’s integrity. That includes the monitoring of betting lines, player education efforts, and the hiring of law enforcement officers as security consultants. Alongside the ads from betting companies promising quick riches, the NFL airs “bet responsibly” ads developed with the National Council on Problem Gambling. The league gave the NCPG the largest donation in its history, $6.2 million.
In an era that’s seen states across the U.S. abandon their qualms over other vice industries, such as marijuana and casino gambling, in exchange for desperately needed tax revenue, sports betting has broad support from government and the public alike. Within weeks of the Jan. 8 introduction of gambling apps in New York, the companies had signed up 1.5 million accounts from 1.1 million customers, almost 90% of them new to regulated sports betting. For people who don’t lose their shirts, it’s fun and fast-paced, just like the games they watch.
On any given Sunday, as the saying goes around the NFL, any team has a chance to win. Should fans begin to doubt that, and the league be perceived as merely a vehicle for gambling, the game will lose fans, says Declan Hill, author of The Fix: Soccer and Organized Crime. The NFL’s core audience is especially susceptible to the risks of betting. “Sports gambling is the crack cocaine for young males between the ages of 14 and 35,” Hill says. “We’re going to have a dramatic and exponential rise in the number of gambling addicts. Gambling is as addictive as alcohol and narcotics.”
Hill’s book presented evidence of international gambling syndicates that had infiltrated sports across the world. At the 2006 World Cup, he reported, gamblers bribed members of the Ghana team to lose a match to Brazil by more than two goals. (Brazil won, 3-0; Ghana’s soccer authorities denied the allegations.) Since then, match-fixing scandals have rocked leagues in countries including China, Germany, and Turkey. Surely that can’t happen in American professional leagues, with their relatively highly paid players? Perhaps not yet, Hill says, but with the nexus of sports and gambling, it’s possible to imagine the interests of owners, bookmakers, and players meeting in new ways. In Italy there’s even a term for it—Il Sistema, the exchange of favors among soccer teams over the course of a season.
The NFL has been knocked around a lot lately—by the crisis of concussions and brain injuries, which drove down participation in youth football; the handling of Colin Kaepernick’s protest, which split the game’s fans into opposing camps; and the falloff in attendance because of the pandemic. Yet most fans say the play on the field, particularly this postseason, has been great. And then last week came the bombshell from former Miami Dolphins head coach Brian Flores, who filed a lawsuit claiming discrimination in the league’s hiring practices. The suit included the explosive claim that the team’s billionaire owner, Stephen Ross, had offered him a $100,000 bonus for each game he lost. Ross called the allegations “false and malicious.” The news raised the possibility that the NFL, the Dolphins, and Ross himself will be sued—by gamblers who claim they lost money in the belief the team was playing to win.
Well before the Supreme Court’s ruling, Goodell and other league executives saw where the ball (and the money) was headed. In 2017, Jonathan Kraft, the son of Robert Kraft and the co-chair of the NFL’s digital media committee, invited Goodell to a Boston suburb for a daylong session with Jason Robins, a co-founder of DraftKings. The Krafts had taken an equity stake in the company in 2013. The son of a schoolteacher and an economics professor, Robins grew up in South Florida, a sports fan who often played in fantasy leagues, season-long contests in which groups of friends pick imaginary teams comprising real players. DraftKings, founded in 2011, turned the contests into quick-moving daily games in which participants could compete for pots of money based on athletes’ performances.
The fantasy sites proved enormously popular with fans. With huge advertising buys on television and radio, they seeded the market in a kind of soft launch for gambling. “Fantasy was the wedge that drove the media companies and the leagues to get comfortable with it,” says John Skipper, the former president of ESPN. “And the motivation for getting comfortable with it was money, of course.”
The NFL began to see gambling as an opportunity to lure younger fans. “All these leagues have been skewing older,” says Andrew Brandt, a former Green Bay Packers vice president who’s now executive director of the Jeffrey S. Moorad Center for the Study of Sports Law at Villanova University. “And what do younger audiences want? They want mobile, they want data, and they seem to like gambling.”
The NFL has said it expects to reap $1 billion a year from its deals with sports betting companies by the end of the decade. That’s a significant shot in the arm for a league that, according to multiple reports, saw revenue decline $4 billion in 2020, to $12 billion, mostly because of attendance declines in the pandemic. Last year, analysts at Goldman Sachs Group Inc., which advises the NFL on its media properties, said the online betting apps could even upend the traditional broadcast and pay-cable markets and become the primary way people watch games.
The apps in turn are powered by little-known data providers that weave together the back-end technology and sell data to the sportsbooks. One of them is Genius Sports, based in London. Genius pays the NFL for the right to act as a middleman between the league and the sportsbooks. A six-year distribution deal it signed last April is worth $120 million a year to the NFL, with half to be paid in Genius equity, according to Sports Business Journal. As a sign of its ambition, Genius last year recruited David Levy, former president of Turner Broadcasting System Inc., as chairman. The company also handles data for the U.K.’s Premier League and Nascar.
Genius’s job is to transmit livestreams and statistics from games to sportsbooks around the world—the NFL-authorized record of every penalty and dropped pass. It’s also to innovate, giving the house ever more imaginative options to keep gamblers around the world on their phones during games. In-game wagers are an increasingly lucrative part of the market, accounting for most of the revenue at many sportsbooks. One popular variety is the proposition bet, or prop bet—a wager on a single event that may not directly affect the game’s outcome. Want to bet that Rams receiver Cooper Kupp will collect at least nine catches? How about picking the fastest player on the field? Genius is often the wizard behind the curtain, collecting the data, calculating the odds, and updating them in real time for customers such as DraftKings and FanDuel, which then blast them out to customers’ phones.
It may come as a surprise to learn that the outfit doing all this, and paying for the privilege, is also expected to ferret out suspicious activities. Genius’s contracts with leagues often include “integrity services” to help spot tampering with games—whether by gamblers, players, league employees, bookmakers, or insiders at the betting companies themselves.
Unlike the U.K. and other countries with legalized online sports betting, the U.S. has no central industry regulator. Oversight is spread among a patchwork of state and tribal governments—many of them captives of the industry who don’t understand the new technology, says Keith Whyte, executive director of the NCPG, the recipient of the big donation from the NFL. Whyte himself is the former research director of the American Gaming Association, the industry’s main lobbyist. “If NCPG was an anti-gambling or an abolitionist organization, I wouldn’t have been a good fit,” he says.
This vacuum of governmental authority demands effective self-regulation by the NFL and its partners. Genius’s integrity unit is run by Stephen Thurley, a 2014 graduate of the University of Plymouth in the U.K. Before joining Genius in 2016, he spent two years as an analyst at Football Radar, a London company that tries to forecast the outcome of matches using statistical modeling. He and his colleagues work from an access-controlled section of Genius’s two-story office in a brick building in Holborn, West London.
Thurley, whose degree is in psychology, oversees 30 people around the world who monitor feeds from 100 to 150 bookmakers. They try to spot unusual flows of money, typically reflected in the odds bookmakers are offering. Some of this is automated; if the betting line shifts enough that a team moves from, say, a 7.5-point to a 9.5-point favorite, it triggers an alert. If there’s no apparent reason, such as an injury that’s been publicly announced, someone on Thurley’s team will investigate further. His department has relationships with bookmakers, both regulated and unregulated, which provide intelligence about who’s betting and why.
One analyst is dedicated full-time to the NFL, Arash Daghighian, a former NFL statistics auditor who monitors games and sends a weekly report to the league recapping the betting patterns. One of the people at the NFL who gets the reports is Sabrina Perel, a former attorney for the Kroll corporate investigations firm in New York who’s been the NFL’s chief compliance officer since 2013. No one at Genius or the league would discuss what’s in the reports, though Perel says the league asks to receive a call if the analysts see “something immediately alarming.” And have they? “We have had calls,” she says. “We would certainly expect that to happen. It means everybody is doing their job.”
Testifying to a congressional commission in 2018, Hill, the author of The Fix, laid a tape measure across a 12-foot table. He moved his hand to show Las Vegas’s share of worldwide sports gambling at the time. It went about 5 inches. Then he swept his hand across the table to suggest the rest of a market worth up to $1.5 trillion—most of it global bookmakers, legal and illegal, that few Americans have ever heard of. Over the preceding decades, they’d created a vast pool of liquidity allowing bets in obscure sports, from caber tossing in small Scottish towns to second-division women’s Australian basketball.
Along with that has come scandal. In 2012 the former head of China’s soccer association was sentenced to prison for accepting bribes and fixing matches, among more than 50 officials, coaches, and players convicted of corruption. Tampering was so rife in professional baseball in Taiwan that the country has fielded only five teams recently, down from 11 in 1997. Authorities in South Korea have investigated and charged players for match-fixing in soccer, volleyball, baseball, and motorboat racing. The soccer association in Belgium reported in 2018 that three 15-year-old girls had been offered $50,000 each to throw matches. Tennis has been marred by repeated match-fixing. “We have a blueprint, and America is just going through it relatively late in the day,” Hill says.
Perel, the NFL’s compliance officer, says the league has developed an online training course laying out the risks of corruption and the new betting markets. In the most recent season, it was viewed by 15,000 people across the league—players, referees, coaches, trainers, medical consultants, and office staff. Workshops for players include presentations by “bad guys” who sought “to groom folks and bring them into their fold and try to fix games,” she says. Personnel are also told about the risks of sharing inside information, even things they might not consider relevant, like the length of the national anthem at this year’s Super Bowl. (Yes, there’s a bet for that.) Beginning in 2020, the NFL security unit started hiring what it calls “sports betting integrity representatives,” with a goal of having them in every city where it has a team. Some are former law enforcement officers. The role of these representatives is “to manage mitigation as well as any particular issues or concerns that might come up,” Perel says.
Betting Apps Want to Hook You With the Super Bowl
It’s hard to fix a game in a team sport without involving a number of players, or at least a star. But the proliferation of prop bets that pay out on a single occurrence means that a journeyman player, or a referee, doesn’t even have to throw a game—it might take only a blown snap or an extra penalty or two. Genius integrity chief Thurley says the company monitors prop bets, too, but believes that bookmakers usually set the betting limits low enough on them that it would be hard for anyone to make a killing. Others in the industry agree. “You would stick out so aggressively,” says Chris Grove, chief executive officer of American Affiliate Co. in Las Vegas, which recruits new customers for sportsbooks. “If we have $2 million in action on a next-drive bet and our total average market on next-drive is, like, $30,000—Houston, we’ve got a problem.”
Still, the limits aren’t always so small, especially when bets can be placed across multiple bookmakers. In January the Football Association said it was investigating a yellow card issued to Arsenal midfielder Granit Xhaka in the 86th minute of a match the previous month against Leeds United. The Sun reported that a single bettor had staked £65,000 ($88,000) on him getting a yellow card in the match and the bet had paid out £250,000. Multiple reports have said the player (who’s carded relatively frequently) isn’t a target of the inquiry.
Whyte, executive director of the national gambling council, says about 2% of the U.S. population has a gambling problem. That may seem small, but it’s more than 6 million people, most of them with parents, children, spouses, or other family members whose lives are also affected. Among those who have gambled in the past 12 months, the figure is 5%. That’s due in no small part to the explosion in apps, optimized like social media to hit the brain’s pleasure centers. “That kind of action—high-stakes, high-speed—is a lot more like playing a slot machine that happens to be based on a sporting event than actually a skilled bet,” Whyte says.
Despite all that, the NFL’s great experiment is in high gear. In some ways football is returning full circle, to the 1920s, when the owners of some of the most storied teams were bookmakers themselves. Tim Mara, who bought the New York Giants for $500 in 1925, booked bets under a striped umbrella at racetracks, according to Interference: How Organized Crime Influences Professional Football, by the journalist Dan Moldea. Art Rooney owned a Pittsburgh tavern where sports fans booked their bets and remained a gambler himself after purchasing the Steelers in 1933, Moldea writes. Charles Bidwill, an associate of Al Capone’s mob who bought the Chicago Cardinals in 1933, was a bootlegger, gambler, and racetrack owner, according to the author. Next season, Bidwill’s grandson, owner of the Arizona Cardinals, will open a Vegas-style BetMGM sportsbook outside the team’s stadium with dozens of TVs, betting kiosks, and indoor-outdoor drinking.
There’s even a gambling story to tell about one of football’s most mythic figures, George Gipp, a star halfback for the University of Notre Dame Fighting Irish. His purported deathbed request—likely fictional—to “win just one for the Gipper” inspired a famed locker room pep talk by his coach, Knute Rockne, and a Hollywood film starring Ronald Reagan. Moldea recounts that the sportswriter Grantland Rice often described another event, this one at halftime of a 1920 game. The Irish were losing by three points, and Rockne spotted Gipp with a casual look, puffing a cigarette.
“Gipp, I suppose you haven’t any interest in this game?” Rockne asked fiercely.
“Listen, Rock,” replied Gipp, “I’ve got five hundred dollars bet on this game; I don’t aim to blow any five hundred!”
The Irish won. —With Chris Palmeri
https://www.bloomberg.com/news/features/2022-02-09/with-super-bowl-lvi-embracing-online-betting-football-will-never-be-the-same