Experts: College sports wagering scandal 'Already happening, we just don't know it'

A panel of gambling experts said last week there is a 100% chance a college sports wagering scandal unfolds on a campus within the next three years.

The industry leaders shared their perspectives during a LEAD1 Association webinar called “Balancing Risk and Opportunity: What Athletics Departments Need to Know about the College Sports Betting Regulatory Climate.” Moderated by LEAD1 CEO Tom McMillen, the conversation assessed concerns for student-athletes now that sports betting has been legalized in 30-plus states and detailed what steps a college can take proactively to thwart a potential scandal from erupting. 

“The sheer amount of colleges there are, and the sheer amount of opportunities there are now, I would be almost certain that there will be something,” said Mark Potter, head of delivery at Epic Risk Management, which works closely with the NCAA on educational programs related to problem gambling. “You can’t educate everybody. You can’t make everybody do the right things, make everybody make good decisions. We can just try to minimize that as much as we can. I fear that it will take something like this, a major scandal, for some people in some organizations to really take notice of how serious this is.”

Michelle Malkin, assistant professor at East Carolina and a nationally recognized expert on problem gambling, also said the likelihood of a scandal unfolding on a college campus in the next three years is 100%. But she noted that it may not necessarily become public. 

“Because of the lack of regulatory oversight, because people do get away with stuff, I think we may have people getting away with stuff more often than we know about it,” Malkin said. “So I don’t know that we’ll actually see the controversy, even though it occurs. I do believe, within the next five years, there will be a public controversy.”

Keith Whyte, executive director at the National Council of Problem Gambling, echoed Malkin’s sentiment, bluntly adding, “It is already happening. We just don’t know it … It is there now. We’re just not seeing it.”

Their concerns amplify what McMillen expressed in March when he told On3 that sports wagering represented his No. 1 personal concern for the enterprise because the ramifications could be “catastrophic.”

A ‘crisis’ time for colleges

The experts painted a picture of an industry in which sports betting enterprises spent $300 million last year on national commercials. They explained how gambling is an unfailing enticement for viewers: Consider that even for games with lopsided scores, 50% of sports bettors will watch the game to the end if they wagered on it, versus only 20% of those who haven’t wagered on it. 

And they described the college sports betting landscape as attractive tentpole events. It’s not merely the NCAA men’s basketball tournament and the College Football Playoff, which annually rank among the most popular North American events fans wager on, enticing betters anymore. Bettors are wagering more on other college sports. This year’s women’s college basketball championship, in which LSU beat Iowa, yielded more than $100 million in wagers, a record for a women’s basketball game. And softball is also showing signs of increasing betting activity. 

The panel said it’s critical college administrations have educational policies in place and know the gambling habits of their student-athletes.

Among the key questions, Whyte said athletic directors need to answer:

• How many of your student-athletes are gambling?
• Is gambling included in your campus wellness surveys and your risk prevention and educational programs?
• Does your college have a comprehensive gambling policy for all students and a specific one for student-athletes?
• Does your college have gambling resources available year-round?
• And, finally, is there a so-called safe harbor in conjunction with mandated reporting of student-athletes with gambling problems?

“I guarantee none of the people [college administrators] on this webinar were able to answer all five of those questions with a yes,” Whyte said. “I guarantee you. And that is the minimum [for policies]. That is the absolute bare minimum.”

To that point, Malkin said, in the study she is currently conducting, students were asked if they know if their campuses have a gambling policy. Less than 5% were aware. Drilling down further, she said there were several campuses that had zero policies related to gambling in place and nothing pertaining to athletes in particular. 

“It’s a real challenge for all collegiate campuses, that they do face sort of a crisis at a time when so many other issues have popped up, like NIL,” said Matt Holt, president and founder of U.S. Integrity, which customizes sports-integrity solutions for conferences, universities and professional leagues. “All these issues on a campus, they all cost money. How do you get the money to put forth toward these programs, which are so important? … Many of these ADs are faced with the budgetary restraints of which ones do we take, which ones are most important?”

Burying your head in the sand won’t work

Holt said his group has, however, seen great adoption at the conference level, where officials are engaged, understand the risks and want to be proactive. He added a word of caution about some of those at the university level, saying, “I can’t tell you how many times we’ve talked about the importance of them understanding when their athletes are under investigation and there’s abnormal activity around their events, and they say, ‘Boy, I don’t think we want to know this information. If we don’t know, we don’t have to react,'” Holt said.

“Those days are gone,” Holt added. “The media knows, the betting community knows, regulators know that action has to be taken, wagers have to be voided, investigations have to take place. That old-school rhetoric of ‘Let’s bury our head in the sand, and if we’re not notified, we don’t have to do anything’ is just as dangerous as the lack of policies and procedures across the country.”

A misnomer with sports betting scandals, Holt said, is that it’s always a big, multimillion-dollar scheme. Not true. He said it almost always involves relatively small dollar figures – $500 to $1,500 – for an athlete to manipulate certain portions of games or activity or to disclose specific information not available to the public.

The other misnomer, Whyte said, is that the scandals involve fixing the outcome of games. Not true in the age of in-game micro-betting, where people can bet on a particular play. All it takes is for an athlete to rig a particular play he or she is involved in, something that he said is “utterly undetectable.”

Illegal sports wagering market is alive and well

Also notable is that while sports wagering is becoming legalized in an increasing number of states, Whyte said, early data – their 2018 survey included 28,000 gamblers nationwide – indicated that there was no statistical difference in sports betting participation between states where it is legal and in states where it was not legal.

“The illegal market is alive and well,” Whyte said. “In fact, I think for a lot of athletes, they would prefer the illegal market because there is a higher chance of them getting caught if they use the legal opportunities.”

That’s just one of the reasons Malkin and McMillen call for a comprehensive national study on the gambling habits of student-athletes. Malkin also said at a time when some colleges, such as Michigan State and LSU, have secured partnerships with sports books – thus “normalizing engaging in sports betting” – it will be critical in the coming years to see what effect that campus-wide exposure to a sports book’s brand has on student-athletes.

The experts spelled out the far-reaching ramifications of a college sports betting scandal. There’s everything from potentially compromising the integrity of games and the eligibility of athletes to risks of gambling addiction and even loss of sponsorship money for a school whose athlete is embroiled in the scheme. 

The one certainty, experts agree, is that the relationship between sports gambling and college sports is here to stay. 

“It’s really important that everybody take this head-on and say, ‘It’s not going away,” Holt said. “[On] May 14, 2018, sports and sports betting clashed and mixed together and they will never be pulled apart again.”