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March 16, 2011 Print

March Madness: Better Without Bets

by Chad Hills

Athletes, universities and businesses pay too high a price gambling on March Madness. Why not simply enjoy the competition with friends and have fun?

Mid-March marks the beginning of the NCAA college basketball tournament season. Teams from across the nation will play ball for more than 20 consecutive days. While the nation’s best collegiate athletes from the South, East, Midwest and West are competing in basketball, however, bookies are playing athletes, officials and fans.

No doubt you’ve had a bracket sheet slipped onto your desk or a stack of bracket sheets dropped on the lunch table. Unknown to many, betting on sports is only legal with licensed operators within the state of Nevada. Nonetheless, illegal sports betting is rampant in the United States.

But are the athletes, universities, fans and businesses paying too high a price for these illegal wagers?

Statistics:

March Madness game statistics: 68 games1 and a daunting number of outcomes based on sequential winners, losers, surprise upsets and elimination rounds. Even if 300 million people filled out different bracket sheets, the probability of someone filling out an entire bracket perfectly is highly unlikely.

Nonetheless, office pools run crazy – everyone with a “secret formula” – and the persistent urgings to gamble can become tempting, ultimately impacting productivity.

Three years prior to the federal Unlawful Internet Gambling Enforcement Act of 2006 – nearly 1.6 million bets were placed on the NCAA Tournament through BetonSports Web-site (the world’s largest online sports-betting site at that time), representing a total handle of $96 million.2

  • The average NCAA Tournament bet placed by an average BetonSports.com client was $60 compared to $50 during the regular season.3
  • Fans spent about 1.5 hours per week on college basketball Web sites during March Madness, according to Websense, Inc (an Internet-filter company). 4

A New York outplacement firm, Challenger, Gray & Christmas, estimates that employers nationwide lose about $101 million in productivity for every 10 minutes their employees spend obsessing about the tournament.5

U.S. businesses will lose anywhere from $400 million to $1.5 billion in productivity during the 15-day event, which ends April 2 for the 2007 tournament.6

A Louisiana State University survey found that out of 12,000 adolescents, 45 percent bet on sports teams.7

Valerie Lorentz, Ph.D., who works with compulsive gamblers in Baltimore estimates that about 90 percent of the teens she works with have sports-gambling problems.8

The National Gambling Impact Study Commission reported in 1999 that between $80 billion to $380 billion is illegally wagered each year on sports.9

A Google.com search, performed on March 13 of 2006, for the following combination of words: “bet” “NCAA” “Basketball” yielded 2,690,000 or nearly 2.7 million different betting-related sites for the NCAA tournament.10

Websense Inc: “There are over 54,500 websites dedicated to gambling and 252,000 general sports-related sites currently on the web.”11

Sports bets accounted for 45 percent of all legal online gambling in 2000.12

One-third of human resource professionals say NCAA college basketball pools take place in their organizations.13

Approximately 63 percent of business organizations currently offer no written policies to address gambling in the workplace.14

Sports Betting is illegal except in Nevada and Oregon (Oregon Lottery). New Jersey repeatedly attempts to legalize sports betting within the state, but all bills have failed thus far. NCAA rules stipulate that staff members of an NCAA athletic department and student-athletes shall not knowingly provide information to individuals involved in organized gambling activities, or solicit or accept any bets or participate in any gambling activity that involves intercollegiate athletics. Anyone involved in point-shaving or betting on their own school is banned from the NCAA for life. Revenue gleaned from the NCAA tournament represents about 95 percent of the NCAA’s budget.15
A University of Michigan survey found that 45 percent of all male athletes had bet on college football or basketball games, despite NCAA regulations banning it.16

The same University of Michigan survey found that one out of 20 male athletes admitted they had given inside information to gamblers, bet on games they played, or taken money to perform poorly in a game.17

University of Michigan researchers surveyed 640 college football and basketball officials and released their findings in March 2000:

  • More than 84 percent admitted they had gambled since becoming an official.18
  • Forty percent of those responding said they had bet on sports.19
  • Almost 23 percent said they had wagered on the NCAA Tournament in men’s basketball.20
  • Twelve of the 640 admitted knowing an official who had called a game to adjust to the point spread in a contest they were working.21

A University of Cincinnati study revealed that nearly four percent (25 players) of 648 college basketball and football players polled admitted they had gambled on a game in which they played.22


“If I ever had a player involved in point-shaving, I probably wouldn’t talk to him for the rest of his lifetime.”

 

-Bobby Cremins, Georgia Tech coach [CNN/Sports Illustrated online, March 27, 1988]


The Law

 

1961 Federal Wire Act – The U.S. Department of Justice maintains that all forms of online gambling are illegal, based on the 1961 Federal Wire Act.  Contention exists, however, about the intent of this law, as the Fifth Circuit Court of Appeals ruled that the Wire Act only applies to sports betting – not to other forms of online gambling. Forbes online claims the online gambling industry exploited U.S. laws because of their ambiguity – lack of clarity: “… hundreds of companies have been exploiting the fact that U.S. laws on online gambling are as hazy as your classic, smoke-filled casino.” [Parmy Olson, “A Good Bet,” Forbes online, 15 August 2006.]

PASPA – In October 1992, the Professional and Amateur Sports Protection Act (PASPA) was signed into law. It allows the U.S. government or an affected sports organization to file suit against a state that engages in state-sponsored lotteries or gambling based on the outcome of sporting events (United States Senate, 1992). Nevada and Oregon – states where sports betting already existed – were exempted (Delaware and Montana were also exempted, but they have not continued their pursuit of sports gambling).

Unlawful Internet Gambling Enforcement Act of 2006 – This legislation was attached to the SAFE Port Act of 2006 (HR 4954) under Title VIII, “Unlawful Internet Gambling Enforcement,” pp. 69-79. Link to H.R. 4954, see Title VIII for Internet gambling language. This act prohibits the acceptance of any payment instrument for unlawful Internet gambling. Final rules and details from the Executive Branch are to be released in early 2007.

Sports-Gambling Tragedies

The NHL was hit by gambling’s curse early in 2006, when Phoenix Coyotes’ coach Wayne Gretzky, his wife, assistant coach Rick Tocchet and law enforcement agents were caught in a gambling ring. Bruins forward Travis Green was also among a dozen NHL players implicated in placing bets with the illegal gambling ring. The case reads as a primer to social ills bred by underground gambling: organized crime, money laundering, hypocrisy and greed.23a

Baseball’s Pete Rose finally admitted (January, 2004) that he bet on baseball and his own team when he managed the Cincinnati Reds in the late 1980s. He will not be eligible for the baseball hall of fame (tracing baseball’s sports-gambling legacy back to Shoeless Joe Jackson, who was banished from baseball because of his part in the Black Sox Scandal of 1919).23b

In 2003-2004, the former University of Washington football coach, Rick Neuheisel, was found to be involved in NCAA betting pools.24

Chris Webber (Kings star player, 2003): A grand jury investigated an illegal lottery that Martin, a retired Ford Motor Co. electrician, operated at Detroit-area auto plants. Martin pleaded guilty in May 2002 to money laundering, saying he used proceeds from the illegal lottery to loan money to Webber and three other University of Michigan players — Robert Traylor, Maurice Taylor and Louis Bullock. The loans to all the players totaled $616,000, Martin said. Webber was in the second year of a 7-year, $123-million contract with the Kings when he had to serve time in prison.25

Adrian McPherson (2003), Florida State quarterback, was accused of Internet betting on pro and college games, including one involving the Seminoles. Prosecutors said McPherson used the account to bet on an Oct. 21 NFL game between Pittsburgh and Indianapolis, and on his own team’s games, including the Nov. 23 contest at North Carolina State when McPherson played poorly and the Seminoles lost.26

The Teddy Dupay (2001) scandal, involving the Florida point guard, ended with Dupay being kicked off the basketball team after betting on his own teammates. Part of Dupay’s alleged crime was providing information to a friend, who happened to be under investigation for possible illegal gambling connections with the Gators.27

In 1997, former Arizona State players Stevin Smith and Isaac Burton Jr. admitted fixing four games in exchange for their debts being forgiven and an additional payment of $20,000. Arizona State student Benny Silman, described as the mastermind of the scheme, got 46 months in federal prison.28

In 1998, two Northwestern players fell under the sway of their bookies, former Notre Dame football kicker Kevin Pendergast and Brian Irving. Kenneth Dion Lee and Dewey Williams were bribed into several point-shaving scandals by Pendergast and Irving, who were persuading gamblers in Nevada to bet against Northwestern.29

In 1996, Boston College suspended 13 players for the final three games of the 1996 season after an investigation into gambling on the Eagles football team.30

Holy Cross College had two athletes suspended for gambling.31

The 1978-1979 Boston College point-shaving scandal: In 1982, Rick Kuhn was sentenced to 10 years in federal prison for his role in fixing six basketball games during the 1978-79 season.32 Investigators discovered that players, bookies, coaches and mobsters were all involved in the illegal gambling scheme.33

South Carolina was involved in two scandals in the 1950s alone.34

Tennessee was involved in gambling incidents in both the 1950s and ’60s.35

In 1948, several Kentucky players started accepting money from gamblers to shave points, a widespread scandal that was born in New York – City College of New York. An investigation by the Manhattan District Attorney’s Office revealed that at least 33 players altered the outcomes of 86 games from 1948-50. Twenty players and 14 gamblers were indicted and convicted (known as the “Scandals of 1951″).36

Overall, there were 42 documented incidents of point-shaving scandals from 1945-74.37

Athletes are not the only casualties in sports gambling. A University of Wisconsin-Madison student who had lost thousands of dollars gambling was charged with three counts of first-degree homicide in the shooting of three men in 2003. Meng-Ju Wu, 19, set up an offshore-betting account and was advised poorly by friends and a bookie.38

Gambling Addiction

During March Madness, many basketball fans wager for 21 straight days until one college team is crowned national champion.

According to the National Gambling Impact Study Commission (Final NGISC Report, June 1999), there are more than 15 million problem and pathological gamblers in the United States.39

You could fill an average-sized NFL Football stadium 214 times to capacity with problem and pathological gambling addicts from the U.S. alone40 -the NGISC report estimates that more than half are underage gamblers (7.9 million).40

Another Concern: College Sports and Academia

More than a quarter of the 64 universities [18] in the 2001 NCAA Tournament had 0-percent graduation rates for their men’s basketball programs during the six-year reporting period ending in 1999.41

In 2001, of the NCAA Tournament field hosting 64 schools, 14 schools had graduation rates of 75 percent or higher, 25 had graduation rates of 32 percent or lower.42

The graduation rate for African American men’s Division-I basketball players during 2001 was the lowest [33 percent] rate in 14 years.43

Seven of the 1998-1999 season’s final Associated Press’ Top 25 Poll, including nearly half of the universities in the top 10 spots, as well as several other high-profile programs like UCLA, Michigan and Missouri all had key players ruled ineligible for part or all of the entire 1999-2000 season for receiving benefits in violation of NCAA rules.44


“[Point-shaving] purely and simply is betrayal –  betrayal of self, teammate, family, coaches, university and the very game itself.”

 

-Rick Taylor, Northwestern Athletic Director [CNN/Sports Illustrated online, March 27, 1988]


The Appeal of Gambling Money to College Athletes

 

College athletes practice daily and travel a great deal of the time for games. Most do not have the time or a compatible schedule to earn additional funds. Not all college athletic programs provide sufficient cost-of-living assistance for their athletes.

“The NCAA’s got to do something,” UCLA point guard Earl Watson said. “We barely get enough to cover rent. Look at JaRon – they suspended him, but he’s wearing my clothes and he owes me money, so I guess he didn’t get rich.”45

The money surrounding gambling is perhaps the greatest known threat to the integrity of the game, Penn State basketball player Titus Ivory told the committee: “You have the availability of quick money when you really have none in your pocket.”.”46

A Toxic Combination

The NCAA tournament offers an adrenaline-pumping opportunity for gamblers to chase losses from previous each previous game and to ride the momentum building up to the next playoff. A few gamblers, bookies and athletes will go so far as to enter into “point-shaving” agreements.

Offshore Internet betting facilities and bookies view the tournament is a feverish Mardi Gras. College students often become regrettably involved with offshore wagers or campus bookies, who threaten physical harm if debts are not paid in full.

Most spend their money on cheese dip, soda and pretzels while jousting rivalries with good friends.

Regardless of their involvement, most college basketball fans would agree that the action, excitement and momentum of the NCAA tournament quickly pulls spectators into the frenzy we’ve termed “March Madness.”

Perhaps a bit more attention should be given to sports and gambling, as this appears to be a toxic combination. Consider the following factors:

  • Betting on sports gives gamblers the illusion that they are in control. Sports fanatics usually have a hunch or an educated guess as to which team will win or lose.
  • Peer pressure in the workplace taunts every employee to participate and, in many cases, to bet money in pools. Nobody wants to be an “outsider” during March Madness.
  • Another deadly ingredient of sports gambling is accessibility (TV, radio, Internet, workplace). Many Americans will be glued to the TV and searching the Internet during the month of March and into April (2004). Numerous bets will be placed, deals with bookies made and millions of dollars spent with little more than a phone call or the click of the mouse.
  • NCAA athletes live up to a demanding schedule while surviving on a meager budget. They, like other college students, must pay rent and buy clothing. Several thousand dollars to shave a few points off the next game soon becomes a very attractive offer.
  • Underage gamblers place bets on the NCAA brackets at school, among peers or on the Internet, posing as adults. In some regards, this Internet-savvy generation of adolescents can navigate web-based betting sites more effectively than adults. it’s a common practice among boys trade sports cards throughout elementary school, but does this condone sports betting as an adult? Parents need communicate openly with their children that sports gambling is not legal.

Solutions

American sports fans, stick to verbal jousting,  cheese dip, chips, soda and pretzels. The NCAA tournament provides a great excuse to gather with friends. Be responsible, and parents remember that you model what your children will become. Parents are the single greatest protective factor in their child’s life concerning risky behaviors.48 Be a positive example. Don’t drink excessively or drop money on games. Your teams can win or lose, but you don’t have to lose by gambling.

Media: CBS paid $6 billion over 11 years to televise the NCAA men’s basketball tournament. CBS was also part owner of SportsLine.com (devoted to tournament pools), a business partner of the NCAA that produces NCAA sports.com (where they make it clear that sports bets are illegal). SportsLine tournaments were sponsored by major corporations such as Samuel Adams Brewery, offering a $1 million prize for pre-selecting all 63 tournament games correctly. Allstate and Enterprise rental-car companies and Microsoft also run more lottery-style betting brackets.49 If the folks televising the NCAA games would stop diminishing the integrity of sports through promoting wagers, Americans might be less tempted to gamble on such events. Web-based advertisements for sports gambling are also a growing concern.50 If you find online sports television advertisements for gambling, write these stations or call and let them know you don’t appreciate their promotion of betting during the NCAA games.

Businesses: Draft policies that prohibit gambling in the workplace. Can your business afford more inefficiency? Before football or basketball season, be sure the company policy is posted in a prominent location such as the lunch area. When money becomes involved in office sports pools, a simple verbal rivalry turns into illegal betting. Cheering for your team is legal, but betting money in sports pools (or online) is not legal – except with licensed operators in Nevada.

College Students: Stay as far away from bookies as possible. Bookies are easy to find, because they prey on college students. Young men and women have had their lives threatened or been physically assaulted after becoming involved with sports bookies. These people are interested in your money – not your well-being. Don’t be sucked into Internet betting, either. Do you trust someone with your credit card number who is running a corrupt operation on a tiny Caribbean island or out of some warehouse in Europe? Internet bets are fertile ground for corruption. The click of a mouse can empty your house. And failure to pay a bookie can land you in a hospital or worse.

College Athletic Departments: Provide sufficient cost-of-living allowances to athletes and time to complete their studies. This will decrease the lure of gambling money to athletes and reduce the risk of their involvement with point-fixing scandals. After all, losing a game in the NCAA tournament is better than losing the opportunity to play.

Congress: NGISC suggested that organized crime had become more involved in college sports wagering. Encourage Congress to oppose all sports betting.

Revised on 3/16/2011


Additional Resources:

 

RETURN TO THE GAMBLING INFORMATION HOMEPAGE.


 

END NOTES:

1 Eric Prisbell, “NCAA tournament: Will bigger field scare folks out of the pools?” Washington Post online, 13 march 2011, http://www.washingtonpost.com/sports/ncaa-tournament-will-bigger-field-scare-folks-out-of-the-pools/2011/03/10/ABUepJS_story.html (15 March 2011).

2 “CEO of BetonSports.com Discusses Regulating Online Gambling Industry: States Should Lead the Charge,” Silicon Valley Business Ink. online (PRNewswire), 16 March 2004, <http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=SVBIZINK3.story&STORY=/www/story/03-15-2004/0002128369&EDATE=MON+Mar+15+2004,+03:11+PM> (16 March 2004).

3 Ibid.

4Karen Dybis, “NCAA office pools: All-American illegal fun; March Madness kicks off workplace betting, but some say it saps worker productivity,” The Detroit News, 14 March 2004, <http://www.detnews.com/2004/business/0403/14/a01-91166.htm> (15 March 2004).

5 Ibid.

6 Ibid.

7 James Westphal, et al., “Final Report Statewide Baseline Survey Pathological Gambling and Substance Abuse Louisiana Adolescents (6th Through 12th Grades) School Year 96-97,” Department of Psychiatry, Louisiana State University Medical Center, 27 April 1998, p. 14.

8 Ron Reno, “The Dirty Little Secret Behind March Madness,” Citizen Magazine (Focus on the Family), March 1999, (15 March 2004).

9 National Gambling Impact Study Commission (NGISC) Final Report, June 1999, p. 2-14, <http://govinfo.library.unt.edu/ngisc/reports/2.pdf> (16 March 2004).

10 Search engine: www.google.com, parameters in search box: [ “bet” AND “NCAA” AND “Basketball”], resulted in “about 2,690,000″ sites (13 March 2006).

11 Karen Dybis, Detroit News online, 2004, Ibid.

12 Sebastian Sinclair, “Global Interactive Gaming Summit & Expo in Toronto,” Christiansen Capital Advisors, LLC, 2000, Slide 7 of 19 (Power Point presentation), <http://www.grossannualwager.com/Internet%20Gambling%20Industry%202001.pptInternet%20Gambling%20Industry%202001.ppt> (18 March 2004).

13 Karen Dybis, Detroit News online, 2004, Ibid.

14 Ibid.

15 Mark Alesia, “NCAA faces tough odds in battle against betting: Organization tries to hold the line in the face of office pools, Web sites and Vegas,” The Indianapolis Star online, 18 March 2004, <http://www.indystar.com/articles/0/130369-9850-036.html> (19 March 2004).

16 Michael E. Cross and Ann G. Vollano, “The Extent and Nature of Gambling Among College Student Athletes,” University of Michigan Athletic Department, Executive Summary, January 1999.

17 David Jones, “Gambling’s ultimate solution lies with colleges,” Florida Today (Brevard County, FL), Sports, 25 October 2002, p. 1.

18 Ibid.

19 Ibid.

20 Ibid.

21 Ibid.

22 Ibid.

23a Steve Conroy, “B’s Go Silent: Green Reportedly Part Of Gambling Scandal,” The Boston Herald online, 9 February 2006,

(14 March 2006).

23b Clark Spencer, “Gambling the ultimate sin: Baseball’s past makes it that way,” Miami Herald online, 14 January 2004, <http://www.azcentral.com/arizonarepublic/sports/articles/0114gambling0114.htmlarticles/0114gambling0114.html> (4 February 2004).

24 Angelo Bruscas, “NCAA throws serious charges at UW: Athletic department accused of lack of institutional control; sanctions likely,” Seattle Post-Intelligencer Reporter, 18 February 2004, <http://seattlepi.nwsource.com/huskies/161038_uw18.html?source=rss161038_uw18.html?source=rss >(17 March 2004).

25 David Ashenfelter and Cecil Angel, “WEBBER’S GUILTY PLEA ENDS YEARS OF SCANDAL: He admits he lied to federal grand jury; Kings star ‘really relieved that this is over'; sentencing is Sept. 16,” Detroit Free Press, 15 July 2003.

26 Associated Press, “No decision: Judge declares mistrial in McPherson gambling case,” Sports Illustrated online, College Football, 6 June 2003, <http://sportsillustrated.cnn.com/football/college/news/2003/06/06/mcpherson_friday_ap/news/2003/06/06/mcpherson_friday_ap/> (18 March 2004).

27 David Jones, Florida Today, 2002, Ibid.

28 Charles Elmore, “Battling the odds NCAA knows basketball is a good bet,” Palm Beach Post, Sports, 8 November 2001, p. 1C.

29 (a) “A stain on the game: Another point-shaving scandal rocks college basketball,” CNN Sports Illustrated online (CNNSI.com), 27 March 1998 <http://www.cnnsi.com/basketball/college/news/1998/03/27/gambling_latest/news/1998/03/27/gambling_latest/> (17 March 2004). (b) Associated Press Boston College continues to sort out mess from gambling scandal Las Vegas Review Journal, Friday, July 25, 1997, http://www.reviewjournal.com/lvrj_home/1997/Jul-25-Fri-1997/sports/5778474.html (16 March 2004).

30 Worcester Telegram and Gazette, “Gambling Editorial,” The NCAA News Comment online, 16 December 1996, <http://www.ncaa.org/news/1996/961216/comment.html>(16 March 2004).

31 Associated Press, “Boston College continues to sort out mess from gambling scandal,” Las Vegas Review Journal, 25 July 1997, <http://www.reviewjournal.com/lvrj_home/1997/Jul-25-Fri-1997/sports/5778474.html> (18 March 2004).

32 David Porter, Fixed: How Goodfellas Bought Boston College Basketball, (Dallas, TX: Taylor Trade Publishing, 2001), <http://www.amazon.com/exec/obidos/tg/detail/-/0878331921/002-1719729-0617648?v=glance#product-details> (18 March 2004).

33 David Jones, Florida Today, 2002, Ibid.

34 Ibid.

35 Joe Goldstein, “Explosion: 1951 scandals threaten college hoops,” Special to ESPN.com, 19 November 2003, <http://espn.go.com/classic/s/basketball_scandals_explosion.html> (17 March 2004).

36 David Jones, Florida Today, 2002, Ibid.

37 JR Ross (AP), “Student charged in Wis. Homicide,” The Daily Iowan online, 8 July 2003, <http://www.dailyiowan.com/news/2003/07/08/Nation/Student.Charged.In.Wis.Homicide-446456.shtmlStudent.Charged.In.Wis.Homicide-446456.shtml> (4 January 2004).

38 National Gambling Impact Study Commission (NGISC) Final Report, June 1999, p. 4-1, <http://govinfo.library.unt.edu/ngisc/index.html> (18 March 2004).

39 Calculations derived from dividing 15 million (problem and pathological gamblers from the NGISC report, 1999) by the average capacity of a typical NFL football stadium (70,000).

40 NGISC Final Report, 1999, p. 4-1, Ibid.

41 Charles Elmore, Palm Beach Post, 2001, Ibid.

42 Ibid.

43 Ibid.

44 Ibid.

45 Ibid.

46 Ibid.

47 NGISC Final Report, 1999, Recommendation 3.7, p. 3-18, <http://govinfo.library.unt.edu/ngisc/reports/3.pdf> (17 March 2004).

48 Robert W. Blum, et al., “Protecting teens: Beyond race, income and family structure,” Center For Adolescent Health, University of Minnesota, 2000, p. 36, <http://allaboutkids.umn.edu/kdwbvfc/beyondrace.pdf>(19 March 2004).

49 Mark Alesia, The Indianapolis Star online, 2004, Ibid.

50 a) US Senator Charles E. Schumer, “SCHUMER STUDY SHOWS NEW YORKERS INUNDATED WITH RECORD LEVELS OF SPAM THIS YEAR,” Press Release, 27 April 2003, <http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/PR01647.pf.html press_releases/PR01647.pf.html >(18 March 2004). b) Dawn Anfuso, “Study Says Spam Affecting All Advertising,” iMedia Connection.com online, 17 April 2003, <http://www.imediaconnection.com/news/1690.asp> (5 March 2006).

__________________________________________________________

Chad Hills is the Analyst for Gambling Research in the Public Policy Department for CitizenLink, an affiliate of Focus on the Family.



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