Every year, typically before the Super Bowl and the annual men’s college basketball tournament, university sports departments issue a standard reminder to athletes and staff that gambling on games is strictly forbidden.
But with the onset of legalized sports betting in several states — Pennsylvania is poised to approve its first sports-wagering license next month — universities are bracing for an onslaught of new temptations for student athletes. Educators say they are stepping up their games to thwart cheating.
Officials are worried not just about egregious behavior, such as shaving points or fixing a game. But they also fear that gamblers, including classmates and neighbors, will try to cajole confidential data from insiders — say, about injuries or academic standing — to get an edge.
“Your mind goes to the worst possible scenario,” said Phil Esten, deputy athletic director at Penn State. “You think about where student athletes could be influenced, where somebody tries to intercept them as they’re going from study hall to dorm room to cafeteria, to try to get information from them.”
Pennsylvania and other states have rebuffed requests to assess an “integrity fee” on sports wagering to compensate universities for compliance efforts. Pennsylvania also declined to approve a betting moratorium similar to one in New Jersey, which has banned betting on any New Jersey college teams or any college games played in New Jersey.
Bettors in Pennsylvania will be allowed to wager not just on the outcome of games involving home teams such as the Nittany Lions or the Temple Owls, but on exotic proposition bets based on performances of individual athletes, such as how many passes a quarterback will throw in a game. With interactive gaming, placing a wager will require just a click on a smartphone.
“It’s going to take us some time to learn where some of the challenges are going to be, where the obstacles are going to be,” said Esten. “And until you go through something the first time, you just don’t know what you don’t know.”
As sports betting becomes more pervasive and accepted, corruption is inevitable, said Tom McMillen, a former Maryland congressman who heads the LEAD1 Association, which represents the athletic directors of the 131 largest university programs.
“It’s just a matter of time before you will have a scandal,” said McMillen.
Collegiate officials contend that unpaid student athletes will be more susceptible than pro athletes to payments to influence a game’s outcome, or to disclose confidential information.
“The absence of financial compensation for amateur athletes creates an opportunity for inappropriate influence,” Penn State president Eric J. Barron said in a June letter to the Pennsylvania Gaming Control Board to encourage the board to enact even a temporary ban on college sports betting.
But skeptics say that previous scandals occurred in a climate dominated by illegal gambling, and it was often the legal bookmakers in Nevada who alerted authorities about suspicious betting. They argue that legal bookmakers operate a volume business on narrow margins that depends on repeat customers, and it’s in their interest to make sure that the games and wagering are perceived to be fair.
“It is the legal bookmakers in Nevada who have always had the greatest incentive, and greatest sensitivity, to spotting anything irregular,” said Kate Lowenhar-Fisher, a Nevada gaming lawyer who represents the industry. She said legal sports books have a strong interest in maintaining the integrity of a sport because their money — and their gaming licenses — are on the line.
“Illegal gambling has been going on since the beginning of time on college events, and nobody has been squawking,” she said. “Now with legal gambling, which includes electronic records and compliance efforts, suddenly that will be the downfall of NCAA game integrity?”
Americans bet about $150 billion a year on sports, mostly illegally, and mostly on professional sports. But college sports betting is substantial. Americans bet about $10 billion this year on the annual NCAA men’s college basketball tournament, according to the gaming industry, and some experts say college football accounts for about 40 percent of all football bets placed in Nevada.
Under collegiate rules, student athletes are prohibited from betting on any sports in which there is an NCAA championship. The ban includes the popular fantasy leagues, whose biggest operators, FanDuel and DraftKings, are rapidly becoming major players in legal casino sportsbooks.
Schools bear compliance costs
University athletic departments say legal wagering will impose additional burdens on their programs. University of Pittsburgh athletic director Heather Lyke told state regulators that the university will face “considerable financial cost” to step up efforts to train and monitor student athletes.
“Pitt will have to greatly enhance educational and compliance efforts regarding sports wagering,” Lyke said in a letter to the Pennsylvania gaming board. “It is likely Pitt will have to hire and train additional staff for that purpose.”
Temple University does not foresee hiring additional staff to monitor and enforce compliance, said athletic department spokesman Larry Dougherty.
“Our compliance staff has made increasing its education and awareness efforts to all of our student-athletes a point of emphasis,” Temple said in a statement. “We have also tightened the access surrounding our athletic programs, including monitoring who is receiving credentials to our athletic contests.”
Penn State, which has one of the nation’s preeminent athletic programs, has already trained students and staff about steering clear of sports betting, and plans to send out more frequent reminders throughout the year, focusing on controlling inside information. But the training is not extensive, and no university employee is devoted entirely to gambling compliance, Esten said.
“We don’t necessarily have a Gambling 101 class where we sit folks down and kind of go through the entire regulations,” he said.
Tom McMillen, head of LEAD1 Association, representing athletic directors of 131 university programs
The NCAA announced in July that it had formed an internal working group to “explore how best to protect game integrity, monitor betting activity, manage sports data, and expand educational efforts.” It recently announced it is working with “service providers” to enhance monitoring and detection efforts, but declined to provide more details on its surveillance.
McMillen, the head of the athletic directors association, said that it’s only fair that the industry compensate universities for the costs.
“Every school is going to spend money to make sure the kids stay away from gambling, that they work with the sportsbooks to find anomalies,” he said. “It shouldn’t all be on the backs of schools because the gaming interests are making all the money here, and the schools are taking all the risks.”
The gaming industry has so far successfully deflected arguments to pay integrity fees, saying that professional and amateur sports leagues stand to earn substantial income directly by selling data and forming advertising partnerships with gaming interests, as well as indirectly through greater fan engagement.
“The notion of the integrity fee, you’re really tripping over dollars to pick up pennies,” said Sara Slane, senior vice president of public affairs for the American Gaming Association. “At the end of the day, there’s plenty of money to be made.”
The NFL alone will generate $2.3 billion in additional revenue from legal sports betting, according to a Nielsen study the AGA commissioned. About $573 million flows directly from the gaming industry for ads, sponsorships and product fees.
About $1.7 billion in new revenue would come from increased value of media rights, merchandise and ticket sales. Officials say sports bettors attend more events and watch more sports on television, driving up overall ad rates and revenue.
“People are consuming more games for longer periods of time because they actually have skin in the game, compared to what’s happening right now where fans are just watching their teams, and not watching the entire games,” said Slane.
How much the NFL model might translate to college sports is debatable. Despite the Supreme Court’s ruling, the NCAA is loathe to endorse any kind of sponsorship with gambling interests.
“While some have advocated that leagues or schools financially benefit from new state laws, including integrity fees levied on sports wagering revenues, the NCAA instead has decided to focus its attention on the substance of education, the protection of student-athletes, and a standard approach to game integrity through consistent national guidelines,” the NCAA said in a statement.
Penn State’s Esten said any business ties with gaming interests are problematic. “We still think it leads to bad behavior, so we do not believe that’s something we should be promoting,” he said.
But there are some signs that the line separating college sports programs and gaming interests is beginning to blur.
And the University of Nevada-Las Vegas announced Sept. 4 that its athletic department had accepted $5 million from Boyd Gaming of Las Vegas. The donation includes funds to pay for a scoreboard in UNLV’s basketball arena advertising Boyd Gaming, which operates 24 casinos nationwide, and announced in January that it is buying the Valley Forge Casino Resort.
The university’s announcement politely avoids using the words “gambling” or “casino,” referring to Boyd Gaming as a “hospitality company” that owns 12 Las Vegas “properties.”
Four of the Boyd casinos in Las Vegas also operate sportsbooks.