The Sports Professor Rick Horrow, in conjunction with promotional partner Northern Trust, reviews the issues of gambling in sports, especially themed around March Madness.
At last, March Madness is upon us – with 65 teams battling for the National Championship beginning this week (and culminating with the Final Four in Indianapolis April 1-3).
At the beginning of the 2005-06 football season, we explored one of the largest issues in the sports business – gambling in all of its forms: (1) gambling and sports sponsorships; (2) gambling and the Internet; (3) gambling on campus; (4) professional sports gambling and Las Vegas. The comprehensive overview is attached.
Clearly, this issue is as significant during March Madness as it is on Super Bowl Sunday. In fact, the NCAA recently announced that it will hold “FBI-assisted educational sessions” for the 16 men’s and women’s teams reaching the regional semifinals this year. The NCAA will also have a “representative” in Las Vegas during the first and second rounds to “monitor bookmaking and other betting activities.”
Recent estimates peg the yearly amount of sports betting (legal and illegal) as reaching $300 billion – almost as much of the United States defense budget and more than the gross domestic product of Switzerland last year. In fact, legal betting on pro and college basketball generated over $543 million in Las Vegas last year. Most critically, according to the University of Delaware’s Center for Drug and Alcohol Studies, roughly 21 percent of 11th graders reported last Fall that they had gambled on sporting events within the year. At the same time, a 2004 NCAA study of 20,000 athletes from all college divisions revealed that 63.4 percent of respondents had gambled since entering college; 28.8 percent said they had wagered on sporting events; and 17.2 percent said they had bet on college sports.
On the other side of this controversy, participation by gambling interests means more money for the sports industry. According to IEG, Inc., gaming interests spent over $44 million on United States sports sponsorships last year, up from $32 million the year before. This month, Gibraltar-based online gambling firm Mansion struck a shirt sponsorship deal with Manchester United – worth more than $105.2 million over four years.
While the NCAA claims to “discourage” gambling and casino sponsorship – many schools have taken money from gambling-related entities for signage, sponsorships, and television ads. Not only will the issue not go away, the line between gambling and the sports industry is blurring fast. It will continue to be a major topic during March Madness, and even more so as Internet gaming grows to an $18.4 billion industry by 2010.
GAMBLING AND THE SPORTS BUSINESS: A COMPREHENSIVE OVERVIEW
As professional and college football generate more revenue each season, they attract thousands of gamblers hoping to generate some revenue of their own. An estimated $40 million in legal football betting occurs in Nevada every weekend – up to $5 billion around the country is bet on games as well. This football betting frenzy culminates with up to $7 billion in legal and illegal bets changing hands before Super Bowl Sunday.
Purists claim that a firewall is necessary to separate illegal gambling from professional and amateur sports. Realists understand that the distinction is slowly evaporating, as leagues’ need for increased revenue intensifies. Consider this:
A recent ESPN poll found that half of the 118 million Americans 16 and older have placed a bet on sports in the past year (including office pools), and 52 percent of those polled believe that “some sports are fixed.”
All but two states – Hawaii and Utah – allow some form of gambling. Parimutuel wagering is legal in 41 states. Thirty-nine states and the District of Columbia operate lotteries, and 34 states house casinos
Recent estimates peg the yearly amount of sports betting (legal and illegal) as reaching $300 billion – almost as much as the United States defense budget and more than the gross domestic product of Switzerland last year.
