The Journal. - How Gambling Scandals Are Rocking Sports Leagues

Episode Date: April 24, 2024

Less than six years after a Supreme Court ruling paved the way for legal sports gambling, U.S. sports leagues are facing an onslaught of betting scandals. The latest example is Jontay Porter, a little-known NBA player, who has been given a lifetime ban for betting on games. WSJ’s Jared Diamond unpacks how major leagues are confronting the darker sides of sports betting with alarming frequency. Further Reading: -NBA Player Banned for Life for Betting on Games  -America Made a Huge Bet on Sports Gambling. The Backlash Is Here.  Further Listening: -How a Psychiatrist Lost $400,000 on Gambling Apps  -Disney Gets Into Gambling  ​​-FanDuel CEO on Sports Gambling's Big Boom  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, Jared. Hey, Kate. So exciting to have you back on the Journal podcast. I know. It's been a while. It has been a long while. Do you remember how we start these things? Not really. I say who I am? And what you cover.

Okay. Yes, of course. I'm Jared Diamond, and I cover sports for the Wall Street Journal with a particular focus in sports gambling. All right. Now, now we're going to do a little experiment. Are you ready for this? I'm nervous, but let's go. Okay, so I'm going to share my screen. Wednesday night of basketball from Scotiabank Arena in downtown Toronto. I wanted Jared to watch some basketball with me. It was the March 20th game between the Toronto Raptors and the Sacramento Kings.

Free ball is good. All right, so it's the first quarter. There's two minutes 43. We're seeing some free throws. All right, here we go. See these free throws here. After that free throw, the Toronto Raptors brought some new players on the court. We got some subs coming in.

Number 34 went in there. Who's that? We'll be talking about number 34 quite a bit. That's Jaonte Porter. Porter checked in close to the end of the first quarter. Jonte Porter also on the court. Here's Ramsey. Three doesn't go.

Jonte Porter once again at the foul line with a rebound. Then, a few minutes later, Porter subbed out of the game, saying he was sick. But what seemed like a normal substitution was actually part of a gambling scandal that would cost Porter his career. We began with some breaking news,

some huge breaking news from the NBA. The league has issued a lifetime ban to Raptors forward John Tate Porter for gambling violations. NBA player has been banned for the rest of his life. Yes. See ya. Can't do it.

Good riddance. You're going to ruin the entire game. Can't do it. Less than six years after a Supreme Court ruling paved the way for legal sports betting, leagues are facing a slew of gambling scandals. These sports leagues, which are billion-dollar industries, multi-billion-dollar businesses,

they rely on the notion that the people watching believe what they are seeing is genuine, that it is not manipulated, it is not rigged, it is not fixed. It is true, untarnished competition. And the second that doubt creeps into your mind, that maybe what we're seeing isn't that, you essentially have nothing to sell to people. Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbaugh. It's Wednesday, April 24th.

Lyon-Baw, it's Wednesday, April 24th. Coming up on the show, what are the odds that legal sports gambling ruins sports? Attention all soccer fans, from Orlando to Los Angeles, We'll see you next time. You'll love it so much you'll want to extend your stay beyond the matches. Get the ball rolling on your soccer getaway. Head to visittheusa.com. Legal sports gambling is actually pretty new. It goes back to 2018, when the Supreme Court struck down a federal law that outlawed sports betting, instead letting states decide whether to legalize it. This was a huge change for sports. Professional sports leagues, for really most of history, were vehemently opposed to the legalization of sports gambling. Fought

it at every turn, lobbied against it, would make public statements whenever given the opportunity to express their belief that legal sports gambling was a death knell for the integrity of their leagues and that it would be devastating for professional sports and college sports. Illegal sports gambling has famously rocked sports leagues. Going back to 1919, when some players on the Chicago White Sox were accused of throwing the World Series. That led to a new rule in Major League Baseball. In every single baseball clubhouse, there is a sign that lists what I would consider to be the golden rule of baseball, which is if you gamble on baseball, you will be banned from baseball for life. No exceptions, no negotiation. You bet on baseball, you are done. There is essentially nothing worse that you could do to tarnish the business that you work for.

Over the decades, there have been other sports gambling scandals, like when baseball legend Pete Rose was banned in the 1980s for betting on baseball, or in the 2000s when an NBA referee went to prison for fixing games. All of that was when sports betting was illegal. Now, in 38 states, sports betting is legal. And sports leagues started to change their tune. Instead of opposing it, they now saw an opportunity. They were very quick

to try to capitalize on this new burgeoning legal industry, rushing to make FanDuel or DraftKings or BetMGM the official sportsbook partner of the National Football League or the National Basketball Association. Suddenly, very quickly after sports betting became legal in many places, you're seeing ads for sportsbooks in arenas, in stadiums, featured prominently. Now, during commercial breaks, what do you see now? Gambling companies. BetMGM is for everyone that loves sports betting. Everyone. And chances to live bet from the first sound to the final whistle. Whatever you want to bet on, you can bet it's on DraftKings. So download the app because life's more fun when you're in on the action. You cannot watch a sporting event now without gambling being in your face constantly.

This was unimaginable, really, up until the day that sports betting became legal in this country. Sports betting has now become a multibillion-dollar industry. Does it bring more eyeballs to the games and to games that people usually don't watch? And to games that people usually don't watch? The reason that sports leagues have now been so quick to embrace legal sports gambling is they see an incredible money-making opportunity. And this is what that is. They believe, really they know, that sports betting drives engagement with sports, right? And leagues know that if people bet on games, they are more likely to watch those games. No one's going to be watching a random Wednesday night basketball game between the

Portland Trail Blazers and the New Orleans Pelicans. That's a burn, man. Ryan's a Blazers fan. Sorry, I didn't mean to call out the Blazers and Pelican. There's the first two teams that popped into my head. However, if you have money on it, guess what? People will be watching. More people watching games means these leagues could charge more to companies like ESPN or Turner or CBS or whoever for the broadcast rights. And that's really where the money really is in professional sports. It's in TV media rights deals. And this is sort of the weird place that we're in right now, where on the one hand, these leagues are so afraid of the threat of fixed games and the threat of manipulated games and any sort of integrity issue, while on the other hand, so eager to capitalize on this boom in legal sports betting that this country is seeing right now.

There's real cognitive dissonance. Are athletes allowed to bet on sports? Excellent question. So every sports league has slightly different gambling policies. But broadly speaking, yes, as long as it's not their sport. An NBA player is allowed to bet on the NFL. A baseball player could bet on the NBA. But an NBA player cannot bet on the NBA even if it's not his game. A baseball player cannot bet on any major league baseball game of any kind, but can bet on other sports. But some players have been caught doing just that.

Calvin Ridley has been suspended for an entire season for betting on NFL games. Four Detroit Lions players, including former first-round pick Jamison Williams, have been suspended for violating the NFL's gambling policy. Both the Iowa and Iowa state athletic departments are facing allegations of sports betting involving some of its student athletes. And one of the biggest

scandals yet? The lifetime ban of basketball player Jonte Porter. That's next. This ad was expressly recorded to create a sense of simplicity. Just a few simple sounds. No complexity. Like Neutral. Made with just vodka, soda and natural flavour. no complexity like neutral

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He started his professional career in Memphis and signed with the Toronto Raptors last year. Jaunte Porter is, I put this nicely because to make the NBA is incredibly challenging and you need to be incomprehensibly good to make the NBA. But by the standards of the NBA, he's a no-name. He has been up and down between the NBA and the G League, which is basically the minor leagues. When did the NBA start to get suspicious of him? So in late January, there was a game where those who monitor these things,

gambling operators, integrity monitors, noticed some unusual gambling activity on Jonte Porter's prop bets. In sports gambling, you can bet on the usual things, like which team will win the Super Bowl. But player prop bets are a different kind of bet. It's where you gamble on an individual's performance. Here's how it works. What's called a line is set. That line could be that, say, Jonte Porter is going to score three and a half points. And then people can bet whether Porter will score

over the line or under the line. So in this game in late January, there was some unusual bets, more action than typical on Junte Porter's prop bets. And unless you're really like a hardcore Raptors fan or a hardcore gambler, you're not betting on Jaunte Porter's prop bets. So when these operators start seeing some money coming in on it, it's a little weird, right? It's a little strange. And most of the people who made these bets won because John Day Porter came out of the game with an injury. And it was a little suspicious and people thought it was weird. And all of a sudden, we have our eye on this, right? It wasn't like a five alarm fire yet, but it was like, this is a little odd. Let's keep our eye on

this. So the NBA started paying attention to Porter. And then on March 20th, in that game you heard at the beginning of the episode, they noticed that someone made an $80,000 prop bet that Porter would underperform in the game. If that happened, the better would win $1.1 million. Lo and behold, the game is played. Jonte Porter comes in, plays a couple of minutes, and then says he's sick and he can't play the rest of the game. Well, guess what? All of those bets won because he only played three minutes

and didn't hit any of those lines. He barely played. And suddenly everyone wins. Well, now the operators are really concerned. Now you have the five-alarm fire. The NBA launched an investigation, and Porter was suspended from playing. Last week, the league announced its findings. It said Porter had disclosed confidential information to sports bettors

and had limited his own participation in one or more games for betting purposes. It also found that Porter had bet more than $50,000 on the NBA, breaking the cardinal rule for professional athletes by betting on his own sport. It was on this basis that the NBA banned him permanently. Neither Porter nor his representative have commented on the ban. Look, they made an example of him. They banned him for life in part because of what he did, but in part also to send a message that we are going to take this seriously and if you are doing this, there is no negotiating your way out of it. In the past few years, there have been those other athletes caught violating gambling rules.

Ten NFL players were suspended, and over a dozen current and former student athletes at both the University of Iowa and Iowa State were also suspended. of Iowa and Iowa State were also suspended. And earlier this month, the interpreter of Shohei Otani, baseball's biggest star, was charged in a gambling scandal. Why do these recent cases matter for sports? These cases matter because it just shows you how close we are to what I call the big one, right? The big one, meaning there's a thrown Super Bowl or, you know, a superstar player is throwing games.

And we all want to believe that's not going to happen. But it seems like every week or every month, we're getting closer and closer and closer to the big one. Do you think this could prompt sports leagues to dial back their ties to sports betting? I would imagine there is a lot of conflicting interests within sports leagues. Are there people within these sports leagues that are still very concerned about gambling? Oh, yeah, absolutely. Are there other people in these giant businesses that feel differently? Yeah. These owners who want to see profits keep coming in,

want to continue to embrace sports gambling, many of them do, right? So it's hard to see anytime soon this train slowing down. It just feels like it's out of the stations and it continued chugging down the track, at least for the foreseeable future. And it rests on the integrity of the players. The leagues will continue to say that they have incredible safeguards in place to ensure that nothing untoward is happening. as untoward as happening.

At the end of the day, yes, it is incumbent on the players to sort of do the right thing and not gamble or not gamble on their own team or their sport. All right, Jared, thanks. Of course. Who do you think is going to be

in the NBA Finals? The Celtics. Do you think I should bet on it? You know what? I've covered, listen, I covered, I've covered, listen, I covered sports for a long time. Predictions are worth literally nothing.

Well, they're worth something now because they're sports betting. No one should be betting on anything I have to say about who's going to win anything. I assure you. That's all for today, Wednesday, April 24th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Joshua Robinson and Robert O'Connell. Thanks for listening. See you tomorrow.