You know what’s not great when you’re just starting a $71 billion, 11-year broadcasting deal? Public FBI arrests and indictments of your league’s players and coaches on day 2 of your season.
You know what’s even worse? Sports journalism’s leading voice calling for drastic change from your newest, biggest backers.
Comcast’s (CMCSA) NBC, Disney’s (DIS) ABC/ESPN, and Amazon (AMZN) Prime Video, which inked said deal ousting TNT, are dealing with exactly that after indictments of former and current NBA players and coaches for alleged involvement in mafia-tied sports betting conspiracy were unsealed on Oct. 23.
Oof, that’s a mouthful, and I didn’t even mention the closely linked illegal poker game scheme.
For our purposes, I’m less interested in the specifics of the indictment (which have been extensively reported on). I’d rather take a look at what substantive change may come to gambling regulation as a result of this brouhaha.
To that end, leading sports guru Bill Simmons had some provocative thoughts — and some industry-changing suggestions — on the situation:
“With the way we legalized gambling in all the states, it’s going to be rocky as to what you can and can’t do,” Simmons said on the Oct. 24 edition of his podcast.
He’s talking about what types of bets should be available to the general public, given the possibility for bet fixing or tipping.
One thing is certain: This problem is not going away. It’s only the first week of the season, but this story has reached escape velocity with further developments surely to come.
Simmons calls for ban on certain sports bets
Simmons, and his Ringer podcast network, are no strangers to the gambling world. In fact, they cover their favorite spreads, bets, and “prop” bets in detail and with a high level of care, compared to most of the universe of betting content out there.
I don’t blame them. In fact, I’m interested in what they have to say, as are many Americans.
“Ever since 2018, when the Supreme Court struck down the Professional and Amateur Sports Protection Act — a law that had banned wagering on sports in almost all states — online betting has overwhelmed the U.S. sports landscape,” explains Candace Buckner.
Popular online betting outlets DraftKings Sportsbook (DKNG) and Flutter Entertainment’s (FLTR) FanDuel Sportsbook are both advertising partners with the NBA. Both also have partnerships with an impressive number of individual teams.
Sportshandle
But the gambling Wild West might have its first “we need federal officers” moment on its hands (fans of “Killers of the Flower Moon”will get that reference).
To do what, exactly? For starters, Simmons thinks sportsbooks should ban prop bets for everyone but big stars. A prop bet is a wager on a specific player’s performance: Think whether LeBron James gets more than eight rebounds (the “Over”), or fewer than eight rebounds (the “Under”).
“I would do this for the NFL, too. I would only have the bigger stars. I would steer the props towards big players only,” said Simmons.
The idea is that schemes like this one could be prevented if lesser-known players, who are more enticed by the quick buck of a gambling payout, couldn’t profit.
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Another method allegedly used in the recent scheme was that of circulating non-public news of whether a player is playing or sitting out on a given day. This may be harder to curtail.
Per Simmons, “Players controlling information that’s coming from them and they don’t know where it’s going. They’re just telling a buddy… I don’t know how they police this.”
The other change that Simmons and frequent guest Joe House discussed was banning “Under” prop bets wholesale.
So far, the prop bets we’ve seen involved in conspiracies have all been Unders, where the player in question either passes up a shot or rebound, subs themself out, or simply doesn’t play. This is, of course, much more easily done than overperforming.
Whether these changes are enforced will come down to a push and pull among federal, state, and the NBA itself.
NBA forced to consider relationship to sportsbooks
Change could now be in the air for sports bettors and sports betting investors. The most substantial damage from this crisis may be to the relationship between the NBA and sportsbooks like DraftKings and FanDuel.
If sportsbooks were strong-armed by federal/state governments or the NBA itself into making changes like Simmons’s proposed prop bet ban, it could affect their bottom lines.
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At time of publishing, Draftkings was down 7.88% since this time last year, whereas FLUT (Fanduel) is up 9.73% off the back of a recent rally following a partnership with the NHL. This recent performance bookends years of growth following the federal legalization.
Both companies’ U.S. operations should brace for impact, as this case could worsen. Further complications could include more players and coaches being drawn in, including higher-profile stars.
Damon Jones, for instance, was indicted both in the sports betting scheme and the poker scheme. Jones, widely known as being close with LeBron James, passed on non-public information about a game LeBron was going to sit out.
The NBA has to hope the reverberations here don’t open up more fissures. To ensure this, they may want to look more closely into their injury list policing.
But sportsbooks are the ones actually in the firing line. They’d better hope their considerable sponsor monies keep talking, because if the NBA can’t seem to fix the issue and starts looking for who to blame, well…
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