Sports Gambling

Chapter 8
Sports Gambling

SOCIAL ATTITUDES TOWARD SPORTS GAMBLING
PARI-MUTUEL GAMBLING
HORSE RACING
GREYHOUND RACING
JAI ALAI
THE FUTURE OF PARI-MUTUEL GAMBLING
LEGAL SPORTS GAMBLING
ILLEGAL SPORTS GAMBLING
ANIMAL FIGHTING
THE EFFECTS OF ILLEGAL SPORTS GAMBLING ON SOCIETY

Wagering on sporting events is one of the oldest and most popular forms of gambling in the world. The ancient Romans gambled on chariot races, animal fights, and contests between gladiators. The Romans brought sports and gambling to Britain in the first century AD, where they have flourished for hundreds of years. Cockfighting, bear and bull baiting, wrestling, and footraces were popular sporting events for gambling throughout Europe during the sixteenth and seventeenth centuries. Horse races and boxing matches became popular spectator and betting sports during the eighteenth century. During the nineteenth and twentieth centuries, sporting events became more team-oriented and organized as rugby, soccer, and cricket grew in popularity.

Many early colonists who traveled to North America brought their love of sports and gambling with them. Horse racing, in particular, became a part of American culture. However, the morals of the late eighteenth and early nineteenth centuries decreased popular support for legalized sports gambling. By 1910 almost all forms of gambling were illegal in the United States. This did not stop people from gambling on sports, however. The practice continued to flourish, and horse racing, in particular, managed to maintain some legal respectability as a betting sport.

Nevada legalized gambling again in 1931 and permitted sports wagering for two decades. Point-shaving scandals in college basketball and the exposure of the industry's underworld connections during a federal investigation led by Senator Estes Kefauver (19031963; D-TN) led to a crackdown during the 1950s. Legal sports gambling did not return to Nevada until 1975, when it was tightly licensed and regulated.

In the twenty-first century, sports gambling in the United States can be broken down into three primary categories: pari-mutuel betting (in which those who have bet on the top competitors split the pool of winnings), which is legal in forty-three states, on events such as horse and greyhound races and the ball game jai alai; legal betting using a bookmaker, which is permitted only in Nevada; and illegal betting.

SOCIAL ATTITUDES TOWARD SPORTS GAMBLING

The popularity of sports gambling is attributed to several factors, including a growing acceptance of gambling in general, intense media coverage of sporting events, and emerging technologies that make wagering easier. Americans can view a wide variety of sporting events from around the world via local and cable television stations, networks dedicated solely to sports, satellite services, and even the Internet. The latest scores can be sent directly to cellular phones. Sports bars and restaurants feature multiple television sets tuned in to various sporting events.

Betting on sports is one of the less popular forms of gambling in the United States. Jeffrey M. Jones of the Gallup Organization reports in One in Six Americans Gamble on Sports (February 1, 2008, http://www.gallup.com/poll/104086/One-Six-Americans-Gamble-Sports.aspx) that as of December 2007 the percentages of survey respondents who had gambled on sports were near the low end. Only 14% had bet in an office pool in the past twelve months, 7% had bet on a professional sporting event, and 4% had bet on college sports. About 5% said they had bet on a horse race, and 3% had bet on a boxing match. Table 8.1 shows trends over time as reported by the Pew Research Center and the Gallup Organization for professional sports betting and horse racing. Most of the 2008 figures were at twenty-year lows.

According to Paul Taylor, Cary Funk, and Peyton Craighill of the Pew Research Center, in Gambling: As the Take Rises, So Does Public Concern (May 23, 2006, http://pewresearch.org/assets/social/pdf/Gambling.pdf),

TABLE 8.1 Poll respondents' reported participation in sports gambling, selected years 1989-2006
  Yes No No opinion
  % % %
Bet on a professional sports event such as baseball, basketball, or football
*Less than 0.5%
Note: 2006 figures are from Pew Research Center; data from all other years are from the Gallup Organization.
SOURCE: Adapted from Paul Taylor, Cary Funk, and Peyton Craighill, What Kind of Bet Did You Place This Year? in Gambling: As the Take Rises, So Does Public Concern, Pew Research Center, May 23, 2006, http://pewresearch.org/assets/social/pdf/Gambling.pdf (accessed August 8, 2008). Data from The Gallup Organization. Copyright © 1989 by The Gallup Organization. Reproduced by permission of The Gallup Organization.
2006 Feb-Mar 14 86 *
2003 Dec 11-14 10 90 *
1999 Apr 30-May 23 13 87 -
1996 Jun 27-30 10 90 -
1992 Nov 20-22 12 88 -
1990 Feb 15-18 21 79 -
1989 Apr 4-9 22 78 -
Bet on a college sports event such as basketball or football
2006 Feb-Mar 7 93 *
2003 Dec 11-14 6 94 *
1999 Apr 30-May 23 9 91 -
1996 Jun 27-30 7 93 -
1992 Nov 20-22 6 94 -
1990 Feb 15-18 11 89 -
1989 Apr 4-9 14 86 -
Bet on a boxing match
2006 Feb-Mar 3 97 *
2003 Dec 11-14 2 98 *
1996 Jun 27-30 3 97 *
1992 Nov 20-22 6 94 -
1990 Feb 15-18 5 95 -
1989 Apr 4-9 8 92 -
Participated in an office pool on the World Series, Superbowl, or other game
2006 Feb-Mar 18 82 *
2003 Dec 11-14 15 85 *
1999 Apr 30-May 23 25 75 -
1996 Jun 27-30 23 77 -
1992 Nov 20-22 22 78 -

the demographic makeup of those who bet on sports between March 2005 and March 2006 was slightly different from the demographic makeup of the average gambler. Whereas 71% of those with some college education gambled, only 23% of them had bet on sports during the previous year. Similarly, 65% of college graduates gambled, but only 25% bet on sports; and 66% of those who had high school diplomas or less had gambled, but only 22% had bet on sports. African-Americans (24%) and whites (23%) were more likely than Hispanics (16%) to have bet on sports. In 2007 football was the most popular sport on which to wager in the legal Nevada sports books; 45% of all wagers were placed on football games, 26% on basketball games, and 20% on baseball games. (See Figure 8.1.)

Taylor, Funk, and Craighill note that 67% of adults approved of legalized gambling in general in 2006; 50% of people approved of legalized off-track betting on horse

TABLE 8.2 Poll respondents' opinion on sports betting, by level of interest in sports, 2006
    Follow sports news
  All adults Very closely Somewhat closely Not very/ not at all
  % % % %
SOURCE: Paul Taylor, Cary Funk, and Peyton Craighill, Sports Fans Back Legalized Betting on Professional Sports, in Gambling: As the Take Rises, So Does Public Concern, Pew Research Center, May 23, 2006, http://pewresearch.org/assets/social/pdf/Gambling.pdf (accessed August 8, 2008). Data from The Gallup Organization. Copyright © 1989 by The Gallup Organization. Reproduced by permission of The Gallup Organization.
Approve 42 55 42 38
Disapprove 54 43 55 58
Don't know 4 2 3 4
  100 100 100 100
Number of respondents 2,250 383 646 1,216

races, down 4% from 1989. Only 42% approved of legal betting on professional sports. (See Table 8.2.) In fact, this is the only gambling activity that Taylor, Funk, and Craighill's survey respondents did not find acceptable. However, a higher percentage of sports fans approved of legalized betting on professional sports: 55% of adults who claimed to follow sports news very closely in 2006 approved of legalized betting on professional sports, compared to only 38% of those who did not follow sports news very closely or at all.

PARI-MUTUEL GAMBLING

Pari-mutuel is a French term meaning mutual stake. In pari-mutuel betting, all wagers on a particular event or race are combined into a pool that is split between the winning bettors, minus a percentage for the management. The larger the pool, the bigger the payoff. In pari-mutuel gambling, patrons bet against each other, not against the house. The principles of the pari-mutuel system were developed in France during the late nineteenth century by Pierre Oller.

The pari-mutuel system has been used for horse races in the United States since about 1875, but it did not really catch on until the 1920s and 1930s, when the totalizator, an automatic odds calculator, came into use. The total-izator took money, printed betting tickets, and continuously calculated odds based on betting volume.

Previously, horse betting had been conducted mostly by bookmakers who were notoriously corrupt. In 1933 California, Michigan, New Hampshire, and Ohio legalized pari-mutuel gambling on horse racing as a means of regulating the industry and gaining some revenue. Dozens of states followed suit over the next decade. Parimutuel gambling was also adopted for greyhound racing and jai alai matches. As of 2008, over forty U.S. states allowed pari-mutuel gambling. A handful of states permit pari-mutuel gambling by law but do not have facilities or systems in place to conduct it.

In pari-mutuel gambling the entire amount wagered is called the betting pool, the gross wager, or the handle. The system ensures that event managers receive a share of the betting pool, regardless of who wins a particular race or match. The management's share is called the takeout. The takeout percentage is set by state law and is usually about 20%.

Breakage refers to the odd cents not paid out to winning bettors because payoffs are rounded. For example, the payout on a $2 bet is typically rounded down in $0.10 or $0.20 increments. The cents left over are the breakage. Even though breakage amounts to only pennies per bet, it adds up quickly with high betting volume. For example, the California Horse Racing Board (CHRB) notes in Thirty-seventh Annual Report of the California Horse Racing Board: A Summary of Fiscal Year 20062007 Racing in California (2007, http://www.chrb.ca.gov/annual_reports/2007_annual_report.pdf) that California horse racetracks accumulated approximately $11.6 million in breakage in fiscal year (FY) 2007. Each state has its own rules about breakage, but usually the funds are split between the state, the track operators, and the winning horse owners. Breakage is subtracted from the betting pool before payouts are made.

Pari-mutuel wagering can be performed in person at the event or, increasingly, at off-track betting (OTB) facilities. The New York legislature approved the state's first OTB operation in 1970. Some states also allow betting by telephone or Internet when an account is set up before bet placement. Many races are broadcast as they occur by televised transmission to in-state and out-of-state locations (including OTB sites). This process, known as simulcasting, allows intertrack wagering to take place. In other words, bettors at one racetrack can place bets on races taking place at another racetrack.

A race book is an establishment (usually a room at a casino or racetrack) in which intertrack wagering takes place on pari-mutuel events such as horse races and greyhound races. A race book typically features many television monitors that show races as they occur. Race books are included in many Nevada and Atlantic City, New Jersey, casinos as well as in some tribal casinos.

According to the American Gaming Association (AGA), in 2008 State of the States: The AGA Survey of Casino Entertainment (2008, http://www.americangaming.org/assets/files/aga_2008_sos.pdf), racinos (racetracks at which slot machines are available) took in $5.3 billion in gross gaming revenue in 2007. This represented a 45.6% increase over the previous year, mostly because of new racino openings in Pennsylvania, Florida, and New York.

HORSE RACING

Horse racing has been a popular sport since the time of the ancient Greeks and Romans. It was popularized in western Europe in the Middle Ages, when knights returned from the Crusades with fast Arabian stallions. These horses were bred with sturdy English mares to produce a new line of horses now known as Thorough-breds. Thoroughbreds are tall, lean horses with long, slender legs. They are renowned for their speed and grace while running.

Thoroughbred racing became popular among the British royalty and aristocrats, earning it the nickname Sport of Kings. The sport was transplanted to North America during colonial times. In Thoroughly Thoroughbred (2006, http://www.jockeyclub.com/pdfs/thoroughly_thoroughbred.pdf), the Jockey Club, the governing body of Thorough-bred horse racing, indicates that races were run on Long Island, New York, as early as 1665. However, the advent of organized Thoroughbred racing in the United States is attributed to Governor Samuel Ogle (17021752) of Maryland, who staged a race between pedigreed horses in the English style in Annapolis, Maryland, in 1745. The Annapolis Jockey Club, which sponsored the race, later became the Maryland Jockey Club. Among its members were George Washington (17321799) and Thomas Jefferson (17431826).

Thoroughbred breeding was prominent in Maryland and Virginia until the Civil War (18611865), when many operations were moved to Kentucky. Thoroughbred

racing had already grown popular throughout the agricultural South. In 1863 the Saratoga racecourse opened in northern New York. It is considered the oldest Thorough-bred flat track in the country. (A flat track is one with no hurdles or other obstacles for a racing horse to jump over.) The Jockey Club, which maintains the official breed registry for Thoroughbred horses in North America, was established in 1894 in New York City.

Horse racing remained popular in the United States until World War II (19391945), when it was severely curtailed. The decades since the war have seen a sharp decline in the popularity of horse racing. Three reasons are commonly mentioned:

  • Competition increased from other entertainment venues and leisure activities, such as theme parks, shopping malls, and television.
  • The horse racing industry avoided television coverage of races during the 1960s for fear it would keep people away from the tracks. (This is now seen as a failure to take advantage of a major marketing tool.)
  • The legalization of state lotteries and casinos created competition for gambling dollars.

However, even though attendance declined, the amount of money gambled on horse races increased overall. According to the Jockey Club, in Fact Book (2008, http://www.jockeyclub.com/factbook.asp?section_8), the pari-mutuel handle from Thoroughbred horse racing was approximately $15.2 billion in 2003, up from $9.4 billion in 1990. (See Figure 8.2.) It dropped slightly to $14.7 billion in 2007. About 88% of the amount gambled on horse races during 2007 was bet at OTB facilities. Analysts believe attendance at live racing will continue to decline as more OTB opportunities become available.

Thoroughbred Racetracks and Races

The Daily Racing Form states in Racing Links: Race Tracks (2008, http://www.drf.com/racing_links/links_tracks.html) that ninety-two Thoroughbred racetracks of varying sizes operate throughout the country. Some are open seasonally, whereas those in warm climates are open year-round. Some are owned by the government, and some are owned by private and public companies. Thoroughbred horse racing in the United States is controlled by a relatively small group of players. Two publicly traded companies, Churchill Downs and Magna Entertainment, along with the New York City Off-Track Betting Corporation and the New York Racing Association, control much of the business. The New York Racing Association is a notfor-profit group that controls the Belmont, Saratoga, and Aqueduct racetracks. Analysts predict that the industry will continue to undergo consolidation, with corporations taking over most of the business.

The three most prestigious Thoroughbred races in the United States are the Kentucky Derby at the Churchill

Downs track in Kentucky, the Preakness Stakes at Pimlico in Maryland, and the Belmont Stakes at Belmont Park in New York. The races are held over a five-week period during May and June of each year. A horse that wins all three races in one year is said to have won the Triple Crown. Only eleven horses have ever captured the Triple Crown, most recently a horse named Affirmed in 1978.

According to the Jockey Club, in Fact Book, there were 51,304 Thoroughbred horse races during 2007. (See Figure 8.3.) California hosted the most events, with 5,055 races, followed by West Virginia (4,357), Pennsylvania (3,748), New York (3,664), and Florida (3,660). The total gross purses amounted to nearly $1.2 billion. The gross purse is the amount awarded to the owners of the winning horses. California racetracks had the highest gross purse of $179.2 million, followed by New York ($142.1 million), Louisiana ($95.3 million), and Kentucky ($81.7 million). The number of Thoroughbred races held each year has steadily declined since the early 1990s. (See Figure 8.4.)

Non-Thoroughbred Horse Racing

Even though Thoroughbred horse racing is the most popular, other types of horse racing also attract parimutuel wagering. In harness racing, specially trained horses trot or pace rather than gallop. Usually, the horse pulls a sulky (two-wheeled cart), which carries a jockey who controls the reins. Sometimes the jockey is seated on the horse rather than in the sulky. Harness racing is performed by standardbred horses, which are shorter,

more muscled, and longer in body than Thoroughbreds. The National Association of Trotting Horse Breeders in America established the official registry for standardbred horses in 1879. At the time, Thoroughbred horses were the favorite of high society, and standardbred horses were popular among the common folk. In Track Information (2008,http://www.ustrotting.com/trackside/trackfacts/trackfacts.cfm), the U.S. Trotting Association indicates that in 2008 there were forty-six licensed harness racetracks that offered pari-mutuel betting. Harness racing is also an attraction at state and county fairs, although not all allow wagering.

A third type of horse known for racing is the quarter horse, so named because of its high speed over distances of less than a quarter of a mile. Quarter horses were originally bred by North American colonists to be both hardworking and athletic. The American Quarter Horse Association (2008, http://www.aqha.com/aqharacing.com/horsemaninfo/2008USRaceDates.pdf) reports that in 2008 races were conducted at eighty-two separate meets, which lasted from a mere two days of racing at some local fairs to two hundred race days offered at the Los Alamitos Race Course in Los Alamitos, California.

Arabian horses are considered the only purebred horses in the race circuit. In Arabian Racing in the US: 2007 Summary (2007,http://www.arabianracing.org/upload/Microsoft_Word_-_Arabian_Racing_in_the_US__Summary_2007.pdf), the Arabian Jockey Club indicates that they raced at seventeen tracks in the United States that held sixty-three stake races in 2007.

Betting on Horse Races

The betting pool for a particular horse race depends on how much is wagered by bettors on that race. Each

wager affects the odds. The more money bet on a horse, the lower that horse's odds and the potential payoff become. The payout for winning tickets is determined by the amount of money bet on the winner in relation to the amount bet on all the other horses in that particular race.

First, the takeout is subtracted from the betting pool. This money goes toward track expenses, taxes, and the purse. Most states also require that a portion of the take-out be put into breeder incentive funds to encourage horse breeding and health in the state. Figure 8.5 shows the breakdown of each takeout dollar in California. (Note: In this graphic, other states takeout refers to wagering fees that are paid to betting facilities in other states that take bets on California races.) After the take-out and the breakage are subtracted from the betting pool, the remaining money is divided by the number of bettors to determine the payoff, or return, on each wager.

The odds on a particular horse winning first, second, or third place are estimated on the morning of a race and then are constantly recalculated by computer during the betting period before the race. The odds are posted on a tote board and on television screens throughout the betting area. The tote board also tallies the total amount paid into each pool. Bettors can wager that a particular horse will win (come in first), place (come in first or second), or show (come in first, second, or third). The payoff for a win is higher than payoffs for place or show, because the latter two pools have to be split more ways. For example, the show pool must be split between all bettors who selected win, place, or show.

Betting on horse races is considered more a game of skill than a game of chance. Professional racing bettors spend many hours observing individual horses and consider

previous race experience when they make their picks. This gives them some advantage over bettors who pick a horse based on whimfor example, because they like its name. Even though bettors do not play directly against each other, an individual bettor's skill does affect other bettors because the odds are based on the bets of all gamblers.

Horse Racing in California

California led the nation in 2007 in terms of the number of races held and the purses paid to winning horses. The state has allowed pari-mutuel gambling on horse races since 1933, when a constitutional amendment was passed by the voters. California has six privately owned racetracks and nine racing fairs. Racing fairs are county and state fairsoften held at racetrackswhere wagering on horse races is one of many fair events. The fairs usually last only a week or two and are conducted several times a year. Gamblers can also bet on horse races at twenty simulcast facilities in the state.

The CHRB states in Thirty-seventh Annual Report of the California Horse Racing Board that the industry grossed $4.4 billion during FY 2007, the highest of any state in the country. Figure 8.6 shows the handle broken down by on-track, off-track, and out-of-state wagers. Only 16.2% ($709 million) of all wagers occurred at the track during 2007. The vast majority of wagers were placed at off-track locations. Winning bettors received 80.1% of the betting pool. The state received revenues of $38 million.

The Economic Effects of Horse Racing

The industry provides direct income to horse owners, trainers, and jockeys through purses. In Fact Book, the Jockey Club notes that in 2007 California tracks paid out the highest gross purse for the year ($179.2 million), followed by New York ($142.1 million) and Louisiana ($95.3 million). The largest portion of a Thoroughbred race purse (typically 60%) goes to the owner of the first-place horse. The owner is responsible for paying the horse's trainer and jockey. The owners of the horses finishing second and third typically receive around 20% and 12%, respectively, of a race purse.

The racing industry also supports a large business in horse breeding. In 1962 Maryland was the first state to establish a program to encourage breeders within the

state through direct money payments. The practice spread quickly to other states involved in horse racing.

In Economic Impact of Horse Racing in Maryland (January 20, 1999), University of Maryland researchers at the College of Agriculture and Natural Resources provide a flow chart to show the economic impact of horse racing. (See Figure 8.7.) The researchers determine that the sport's main impact is not the cash flow between the wagering public, the racetracks and OTBs, the horse owners, jockeys, breeders, and trainers, and the regulatory government agencies. Rather, they suggest that the true economic effects of the sport occur outside the industry from expenditures on goods and services.

Racetrack and OTB operators spend money on land, labor, and other goods and services from various businesses. Horse owners, breeders, and trainers spend money on land, labor, veterinary care, and horse feed and supplies. All these pump money into the general economy. In Fact Book, the Jockey Club estimates that the horse racing industry creates the equivalent of 1.4 million jobs both directly and indirectly in the United States.

Unlike the casino industry, the horse racing industry has only a minor impact on tourism. Most racetracks are not typical tourist destinations that attract overnight visitors who spend money on lodging, food, and other entertainment. The exceptions are the races held as part of the Triple Crown. These racing events attract visitors from all over the world and bring a significant number of tourist dollars to local businesses.

Horse Fatalities and Injuries

Horse racing does have a price in terms of horse fatalities and injuries. For example, in Thirty-seventh Annual Report of the California Horse Racing Board, the CHRB notes that California had 301 racehorse fatalities between November 2006 and November 2007. Nearly half (147) of the deaths occurred during races, and another 97 deaths occurred during training. The remainder occurred during other activities.

The horse racing industry has invested millions of dollars in veterinary research on injuries and illnesses that affect racehorses. The Grayson-Jockey Club Research Foundation, the leading private source of funding for research into horse health issues, was founded in 1940. The foundation reports in 2007 Annual Report (2008, http://www.grayson-jockeyclub.org/resources/2007%20Annual%20Report.pdf) that in 2007 it allocated over $1.1 million toward twenty-one projects at universities that conduct equine research.

Two horse health issues of major concern are mare reproductive loss syndrome (MRLS) and exercise-induced pulmonary hemorrhage (EIPH). In Eastern Tent Caterpillars Now Wandering, Populations up Sharply from 2007 (May 9, 2008, http://www.ca.uky.edu/gluck/mrls/2008/050908ETCupdate.htm), the University of Kentucky's College of Agriculture reports that MRLS is an illness that killed 30% of Kentucky foals (horses less than one year old) between 2001 and 2002. Since then, scientists have determined that MRLS is caused by eastern tent caterpillars, which can find their way into horse food. Manu M. Sebastian et al. estimate in Review Paper: Mare Reproductive Loss Syndrome (Veterinary Pathology, vol. 45, no. 5, September 2008) that MRLS has had an economic impact on the horse racing industry of approximately $500 million.

EIPH is a common condition in racehorses: they bleed from the lungs during strenuous exercise, probably because increased blood pressure ruptures tiny blood vessels in their lungs. Up to 80% of racehorses are affected. Horses that experience EIPH can be temporarily or permanently barred from racing, depending on state regulations and the severity of the problem.

GREYHOUND RACING

Greyhounds are mentioned in many ancient documents. English noblemen used greyhounds to hunt rabbits, a sport known as coursing. Greyhound racing was given the nickname the Sport of Queens because Queen Elizabeth I (15331603) of England established the first formal rules for greyhound coursing during the 1500s. Greyhounds were brought to the United States during the late 1800s to help control the jackrabbit population on farms in the Midwest. Eventually, farmers began holding local races, using live rabbits to lure the dogs to race. In the early 1900s Owen Patrick Smith (18671927) invented a mechanical lure for this purpose. The first circular greyhound track opened in Emeryville, California, in 1919.

Three major organizations manage greyhound racing in the United States: the National Greyhound Association (NGA), which represents greyhound owners and is the official registry for racing greyhounds; the American Greyhound Track Operators Association (AGTOA); and the American Greyhound Council (AGC), a joint effort of the NGA and AGTOA, which manages the industry's animal welfare programs, including farm inspections and adoptions.

Wagering on greyhounds is similar to wagering on horse races. However, greyhound racing is not nearly as popular as horse racing, and its popularity has declined dramatically in the past few decades. According to the Humane Society of the United States (HSUS), in Greyhound Racing Facts (2008 http://www.hsus.org/pets/issues_affecting_our_pets/running_for_their_lives_the_realities_of_greyhound_racing/greyhound_racing_facts.html), the handle from greyhound racing declined by 45% during the 1990s, leading to the closure or cessation of live racing at sixteen tracks across the country. In addition, seven states specifically banned live greyhound racing during that decade: Idaho, Maine, Nevada, North Carolina, Vermont, Virginia, and Washington. Pennsylvania became the

eighth state to ban greyhound racing in 2004, and Massachusetts placed an initiative to ban greyhound racing on the November 2008 ballot.

In U.S. Greyhound Racing Fact Sheet (April 2007, http://www.rescuedgreyhounds.com/home/GPL-One_Page_Fact_Sheet.pdf), the Greyhound Protection League states that in 2007 greyhounds raced at thirty-eight racetracks in thirteen states: Alabama, Arizona, Arkansas, Colorado, Florida, Iowa, Kansas, Massachusetts, New Hampshire, Rhode Island, Texas, West Virginia, and Wisconsin. Florida had the most number of racetracks: fifteen.

Florida's Greyhound-Racing Industry

According to the Florida Department of Business and Professional Regulation's Division of Pari-mutuel Wagering, in 76th Annual Report: Fiscal Year 20062007 (January 2008, http://www.myflorida.com/dbpr/pmw/documents/AnnualReport2006-2007.pdf), greyhound races were the most attended pari-mutuel event in Florida in FY 2007, attracting 1.7 million visitors, up 14% from the previous year. There were 4,896 greyhound races in that year, up 9% from the previous year. (See Figure 8.8.) The greyhound-racing handle in FY 2007 was $465.3

million, a 3% decrease from the previous fiscal year, despite the increase in track attendance. (See Figure 8.9.) This decrease was due to a reduction of the simulcast handle from outside the state of 73% over the previous year, reflecting the increasing condemnation of greyhound racing outside of Florida. Purses totaled $30.7 million.

Greyhound racetracks paid $14 million to the state during FY 2007, accounting for 51% of the state's revenue from pari-mutuel gambling. The taxes paid to the state increased by 1% over the previous year.

The Economic Effects of Greyhound Racing

The American Greyhound Council, a pro-racing group, reports in Racing in the U.S.: Economic Impact (2008, http://www.agcouncil.com/racing.cfm?page=3) that breeding farms and racing kennels invest more than $150 million in land, buildings, and equipment and contribute $96 million into local economies each year. The council states that the nation's racing greyhounds are worth over $200 million. In addition, greyhound tracks around the country employ fourteen thousand people, pay $150 million in wages, and pay nearly $100 million per year in state tax revenue. The tracks are credited with donating about $11.7 million per year to charities and community causes.

Concerns about Greyhound Welfare

The Greyhound Protection League (November 2004, http://www.greyhounds.org/gpl/contents/PDFs/abuse_cases_11-04.pdf) explains that during the 1990s there were dozens of well-documented cases of cruelty and abuse in the greyhound industry involving thousands of dogs that were shot, starved, abandoned, or sold to research laboratories. Because of the work of animal rights groups such as the HSUS, the cruelty of the greyhound industry was revealed to the American public. Many greyhound racing organizations changed the way they treated greyhounds and initiated adoption programs for dogs that were too old to race.

However, the practice of killing unsuccessful greyhounds is still very much alive. In U.S. Greyhound Racing Fact Sheet, the Greyhound Protection League compiles statistics on what it states are the number of greyhounds bred, adopted, and killed each year. The league claims that more than 600,000 greyhound puppies and adult dogs were killed by the industry between 1986 and 2006, including 186,221 puppies. During this same period, 179,000 greyhounds were adopted. The organization alleges that the racing industry overbreeds greyhounds in the hopes of producing winners, leading to the destruction of thousands of unwanted puppies each year. A racing greyhound's career is typically over at the age of four years, well below its average lifespan of twelve years, meaning that thousands of adult dogs are also destroyed each year when they are no longer able to race.

According to the Division of Pari-mutuel Wagering, in 76th Annual Report, almost all of Florida's greyhound tracks actively sponsor greyhound adoption programs, and many have on-site adoption booths. The tracks are required to pay 10% of the credit they receive for uncashed winning tickets to organizations that promote or encourage greyhound adoptions. These mandatory contributions amounted to $194,897 during FY 2007.

JAI ALAI

Jai alai is a court game in which players bounce a ball against a wall and catch it using a cesta (a long curved basket) that is strapped to the wrist. The term jai alai comes from the Spanish Basque phrase for merry festival. The first permanent jai alai arena, called a fronton, was built in Florida in 1924.

The game's scoring system has been adjusted over the years to make it more attractive to gamblers. Typical games include eight players, with two players competing for a point at one time. The game continues until one player obtains seven points. Win, place, and show positions are winning bets, just as in horse racing.

The Division of Pari-mutuel Wagering notes in 76th Annual Report that only six frontons in Florida offered pari-mutuel gambling on jai alai in 2007. (Other frontons in the United Statesin Connecticut and Rhode Island had closed by 2003.) Paid attendance in Florida was 337,246 at 1,363 events in FY 2007. Attendance was up 14% from the year before. The state received $659,001 in taxes and fees from the jai alai industry in 2007.

Jai alai peaked in popularity during the early 1980s, when more than $600 million was wagered on the sport. By fiscal 2007 the total handle had declined to $81.4 million. (See Figure 8.9.)

THE FUTURE OF PARI-MUTUEL GAMBLING

Decreasing Popularity and Income

Pari-mutuel gambling is decreasing in popularity as it faces increasing competition from other gambling options, particularly casinos. The horse racing industry experienced a 40% decline in attendance during the 1990s. As a result, racetracks found it increasingly difficult to attract a large enough betting pool to afford to run races. According to the Jockey Club, in Fact Book, the number of Thorough-bred races run each year in the United States fell from 74,071 in 1989 to 51,304 in 2007, a decrease of 31%. Figure 8.4 illustrates the decline from 1995 to 2007.

Attempts to Attract New Gamblers

Gambling industry analysts suggest that horse races have a relatively small hard-core group of attendees, most of whom are older people. The industry is trying to attract a larger and younger fan base (twenty-five to forty-five years old) with a disposable income. Some racetracks have tried to become entertainment venues by offering food courts, malls, and music concerts. Even though these attractions may increase attendance, the newcomers do not necessarily gamble. Meanwhile, devoted race fans

complain that such promotions are too distracting and draw attention away from the racing.

Increasingly, pari-mutuel facilities are offering other gambling choices to patrons. The AGA indicates in 2008 State of the States that eleven states had slot machines and/or video lottery terminals at their racetracks in 2007: Delaware, Florida, Iowa, Louisiana, Maine, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, and West Virginia. Racinos have been a huge success. Consumer spending at racinos rose from $2 billion in 2002 to $5.3 billion in 2007, an increase of 163%. (See Figure 8.10.)

In 2007 gamblers in Pennsylvania wagered nearly $1.1 billion, or 20 percent of the revenue brought in by racinos nationwide. (See Figure 8.11.) Many new properties opened in 2006 and 2007, including in Pennsylvania, New York, and Florida. The top racino market in 2007 was Charles Town, West Virginia, which took in $463.4 million in revenue. (See Table 8.3.)

Most of Florida's racetracks and jai alai frontons have card rooms in which gamblers wager on card games, mainly poker. In 76th Annual Report, the Division of Pari-mutuel Wagering notes that the gross revenue in the state's card rooms was $54.2 million in FY 2007, an increase of 18% from the previous year. The number of card rooms had increased from 457 in FY 2006 to 469 in FY 2007. The card rooms contributed $5.7 million in taxes and fees to state and local governments in FY 2007.

TABLE 8.3 Top 10 racetrack casino markets, 2007
  Location Revenue
Note: New Mexico does not report revenue by individual facility.
SOURCE: Top 10 U.S. Racetrack Casino Markets, 2007, in 2008 State of the States: The AGA Survey of Casino Entertainment, American Gaming Association, 2008, http://www.americangaming.org/assets/files/aga_2008_sos.pdf (accessed August 1, 2008). Data from The Innovation Group. Reprinted with permission of the American Gaming Association. All rights reserved.
1 Charles Town, W.Va. $463.37 million
2 Yonkers, N.Y. $394.33 million
3 Providence, R.I. $375.38 million
4 Dover/Harrington, Del. $339.79 million
5 Delaware Park/Wilmington, Del. $272.62 million
6 Chester, Pa. $272.48 million
7 Bensalem, Pa. $262.80 million
8 Chester, W.Va. $228.21 million
9 Broward County, Fla. $202.52 million
10 Wheeling, W.Va. $200.98 million

LEGAL SPORTS GAMBLING

Besides the sports involved in pari-mutuel gambling, legal sports gambling is extremely limited in the United States. Only one state, Nevada, allows high-stakes gambling on sports such as football, basketball, and baseball.

In 1992 Congress passed the Professional and Amateur Sports Protection Act, which banned sports betting in all states except those that already allowed it in some form (Delaware, Montana, Nevada, New Mexico, Oregon, and Washington).

Sports and Race Books in Nevada

Sports books are establishments that accept and pay off bets on sporting events. They are legal only in Nevada. Bettors must be over age twenty-one and physically present in the state.

According to the Nevada Gaming Control Board (October 1, 2008, http://gaming.nv.gov/documents/pdf/race_sports.pdf), 201 locations in the state were licensed to operate sports books and/or race books in 2008. More than half of them were in Las Vegas, and most were operated by casinos. The typical casino book is a large room with many television monitors showing races and games from around the world. Most casinos have combined race/sports books, although the betting formats are usually different. Race book betting is mostly of the pari-mutuel type, whereas sports book betting is by bookmaking.

Bookmaking

Bookmaking is the common term for the act of determining odds and receiving and paying off bets. The person performing the service is called the bookmaker or bookie. Bookmaking has its own lingo, which can be confusing to those who are not familiar with it. For example, a dollar bet is actually a $100 bet, a nickel bet is a $500 bet, and a dime bet is a $1,000 bet. To place a bet with a bookmaker, the bettor lays down (pays) a particular amount of money to win a particular payoff.

Bookmakers make money by charging a commission called vigorish. Even though the exact origins of the word are not known, Merriam-Webster's Collegiate Dictionary (2003) suggests that the term vigorish may be derived from the Ukrainian word vygrash or the Russian word vyigrysh, both of which mean winnings or profit. In any event, vigorish is an important yet misunderstood concept by most bettors.

Most gambling literature describes vigorish as a 4.55% commission that a bookie earns from losers' bets. In A Crash Course in Vigorish and It's Not 4.55% (September 10, 2008, http://www.professionalgambler.com/vigorish.html), J. R. Martin, a sports handicapper (a person who analyzes betting odds and gives advice to bettors), provides a different interpretation of vigorish. Statistically, only bettors who win exactly half of their bets pay exactly 4.55% in vigorish. Other bettors pay different percentages. Martin explains that a bettor must win 53% of all equally sized bets to break even. However, this bettor would wind up paying a vigorish of at least 4.82%.

Some sports bets are simple wagers based on yes or no logic. Examples include under and over bets, in which a bettor wagers that a particular game's final score will be under or over a specific number of points.

Most sports bets are based on a line set by the book-maker. For example, the line for a National Football League (NFL) football game between the Miami Dolphins and the Tennessee Titans might say that the Dolphins are picked by seven points. A bettor picking the Dolphins to win the game wins money only if the Dolphins win the game by more than seven points.

The line does not reflect a sport expert's assessment of the number of points by which a team will win. Rather, it is a concept designed to even up betting and to ensure that the bookmaker gets bets on both sides. This reduces the bookie's financial risk. Bookmakers will change lines if one side receives more betting action than the other. The skill of sports gambling comes in recognizing the accuracy of the line. Experienced bettors choose games in which they believe the posted lines do not accurately reflect the expected outcomes. This gives them an edge.

The odds for most licensed sports books in Nevada are set by Las Vegas Sports Consultants, Inc. Formerly owned by SportsLine.com, Inc., the company was purchased in November 2003 by a group of private investors in Las Vegas.

Developments in Legal Sports Gambling in Nevada

Nevada legalized gambling during the Great Depression (19291939) as a means of raising revenue. During that time, Charles K. McNeil (?1981), a Chicago securities analyst, developed the handicapping system, in which bookmakers establish the betting line. The new system provided incentive for gamblers to bet on the underdog in a contest and made gambling more appealing. During the 1940s the Nevada legislature legalized off-track betting on horses, and sports and race books were popular in the state's casinos.

Then in 1950 and 1951 a series of U.S. Senate hearings led by Senator Kefauver investigated the role of organized crime in the gambling industry. The televised hearings focused the nation's attention on gangsters, corrupt politicians, and legal and illegal gambling. One of the results was the passage of a 10% federal excise tax on any wager with respect to a sports event or a contest. Because of the tax, the casino sports books, which were making only a small profit, were forced to shut down.

In 1974 the federal excise tax was reduced to 2%, and the sports books slowly made a comeback. Frank Lefty Rosenthal (1929), a renowned handicapper, is credited with popularizing the sports book in Las Vegas during the 1970s. The 1980s were boom years for the sports and race books: in 1983 the federal excise tax was reduced to0.25%. Jimmy the Greek Snyder (19191996) brought some legitimacy to sports gambling through his appearances on televised sports shows. The amount of money wagered in the Nevada sports books increased dramatically until the mid-1990s, when it began to level off.

Money and Games

Nevada's sports books had a betting handle of $2.6 billion in 2007. (See Figure 8.12.) This was up from $2.4 billion in 2006. The profit made on sports betting is actually quite low. In 2007 the sports books had a revenue of only $168 million, down from the previous year's high of $192 million.

According to the AGA, in 2008 State of the States, football wagers accounted for 45% of Nevada's sports book wagering during 2007. The Super Bowl alone generated $92.1 million in wagers in 2007. (See Figure 8.13.) However, Nevada's sports books lost money on Super Bowl betting in that year.

Industry experts estimate that one-third of the bets placed in the Nevada sports books are on college sporting events. Wagering is not allowed on high school sporting events or Olympic events. Nevada law also restricts the sports books to wagering on events that are athletic contests: betting is not allowed on related events, such as who will win most valuable player awards.

Options Outside Nevada

OREGON. In the 1990s Oregon operated two sports betting games as part of its lottery. The Oregon Lottery (2008http://www.oregonlottery.org/sports/program.php) explains that proceeds from the Sports Action game went to the state's Intercollegiate Athletic and Academic Scholarship Fund. The game earned more than $30 million for the fund. The betting was conducted only during

the football season on selected professional football games. Because professional football leagues restrict the use of their trademarked names, lottery officials referred to teams by location only (e.g., Denver versus Miami). In a second lottery game, Scoreboard, bettors won money if they correctly picked a number that matched the last digit of the scores from selected professional football games. The state passed a law in 2005 that eliminated both the Sports Action and Scoreboard lottery games.

DELAWARE. Delaware tried a sports lottery in 1976 based on NFL games. The league sued for trademark violation but eventually lost the case. The sports lottery, which was called Scorecard, proved to be unpopular with bettors and unprofitable for the state. It was abandoned after only one football season. A task force was set up in 2002 to investigate the feasibility of reinstating a sports lottery game. The group's report to the Delaware General Assembly in 2003 estimated that a legal sports lottery could raise approximately $13 million for the state. In 2005 legislation was introduced to give the state lottery permission to create a pari-mutuel betting game. The bill was soundly defeated. In addition, Governor Ruth Ann Minner (1935) was opposed to expanded gambling in Delaware, making it unlikely that a sports lottery would be initiated while she was in office. The expansion of sports betting is also opposed by the NFL, the National Basketball Association, the National Hockey League, Major League Baseball, and the National Collegiate Athletic Association (NCAA).

MONTANA. Montana allows five types of sports gambling: sports pools, Calcutta pools, fantasy sports leagues, sports tab games, and fishing derbies.

Calcutta pools operate much like pari-mutuel betting: all the money wagered on a sporting event is pooled together. In a Calcutta pool, an auction is held before a sporting event, and bettors bid for the opportunity to bet on a particular player. For example, before a golf tournament, the pool participants bid against each other for the right to bet on a particular golfer. The money collected during the auction becomes the wagering pool. It is divided among the owners of the best finishing players and the pool sponsor. Calcutta pools are most often associated with rodeos and golf tournaments.

Fantasy sports leagues are games in which the participants create fictitious teams composed of actual professional athletes. Each team wins points based on its performance against other teams in the league over a designated period. Team performance is based on the actual performance of the selected athletes during real sporting events. The points collected by each participant in the league can be exchanged for cash or merchandise paid for by membership fees collected from each participant. In Montana, licensed Sports Action retailers can conduct fantasy sports wagering. Profits benefit the Montana Board of Horse Racing.

A sports tab game is one in which players purchase a numbered tab from a game card containing one hundred tabs with different number combinations. Bettors win money or prizes if their numbers match those associated with a sporting eventfor example, digits in the winning team's final score. The cost of a sports tab is limited by law to less than $5. Operators of sports tab games (except charities) are allowed to take no more than 10% of the total amount wagered to cover their expenses (charities are allowed to take 50%). Sports tab sellers must obtain a license from the state and pay licensing fees and gaming taxes.

OTHER STATES. Other states that offer limited sports gambling are Washington, which permits $1 bets on race cars, and New Mexico, where small bets on bicycle races are legal. Office pools on sporting events are legal in a few states as long as the operator does not take a commission. Despite these examples of sports betting in other parts of the United States, the big money in legal sports gambling is in Nevada.

ILLEGAL SPORTS GAMBLING

The AGA estimates in the fact sheet Sports Wagering (2008, http://www.americangaming.org/Industry/factsheets/issues_detail.cfv?id=16) that in 2007 Nevada sports books accounted for less than 4% of all sports gambling in the country, and that the vast majority of sports bets were illegal. This makes it difficult to assess exactly how much money is involved.

Illegal sports gambling encompasses a wide variety of activities. Most illegal bets on sporting events have been placed with bookies, although Internet gambling and office pools have also been popular. In addition, some sporting events, illegal in themselves, are popularly associated with gamblingfor example, cockfighting and dog fighting.

The Link to the Nevada Sports Books

Most illegal books use the odds posted by the Nevada sports books because these are well publicized. Nevada sports books also provide illegal bookies with a means for spreading the risk on bets: illegal bookies who get a lot of action on one side of a bet often bet the other side with the Nevada sports books to even out the betting.

Transmitting gambling information across state lines for the purpose of placing or taking bets is illegal. News items about point spreads (the predicted scoring difference between two opponents) can be reported for informational and entertainment purposes only, but betting lines are still published by many U.S. newspapers. The Newspaper Association of America, which represented nearly 90% of daily circulation papers in the country in

2008, defends the practice as free speech protected under the First Amendment of the U.S. Constitution. The association claims that readers want to see the lines for informational purposesto learn which teams are favored to winand not necessarily for betting purposes. Even though the NCAA has argued that a ban on all college sports wagering would pressure newspapers to stop publishing point spreads, the AGA has countered that betting lines would still be accessible through independent sports analysts, offshore Internet gambling sites, and other outlets.

The Link to Organized Crime

Illegal sports gambling has long been associated with organized crime in the United States. During the 1920s and early 1930s mobsters set up organized bookmaking systems across the country, including two illegal wire services, Continental Wire Service and Trans America Wire, which operated under the direction of the gangster Al Capone (18991947). The legal wire service, Western Union, was prohibited by law from transmitting race results until races were officially declared over. Sometimes this declaration did not take place for several minutes after the race finish, so mobsters reported the winners on the illegal wire services to prevent bettors from taking advantage of these delays by posting winning bets before the official results were wired.

During the 1950s the federal government cracked down on organized crime and eventually drove mobsters out of the Nevada casino industry. As the casinos were taken over by corporations, organized crime strengthened its hold on illegal bookmaking. Even though law enforcement officials acknowledge that many independent bookies operate throughout the country, the big money in illegal sports gambling is still controlled by organized crime.

ANIMAL FIGHTING

Gambling on animal fights has a long history in the United States, despite its unsavory reputation. Most staged animal fights involve cocks (roosters) or dogs specially bred and trained. Even though such fighting is usually associated with rural areas, urban police reports about cockfighting and dog fighting have increased in recent years as the sport has become popular among street gangs. Animal fights are of particular concern to law enforcement authorities because large amounts of cash and weapons are usually present.

No official national statistics are available on animal fighting. However, Pet-Abuse.com, a Web site operated by a nonprofit organization in New York, collects and documents information about animal abuse cases. As of October 2006 the Web site's database included 1,210 documented cases of animal fighting; 127 of them had occurred in 2008.

Cockfighting

In the wild, cocks fight and peck one another to establish a hierarchy within their social order. These altercations rarely lead to serious injury. By contrast, fighting cocks are specially bred and trained by humans to be as aggressive as possible. They are given stimulants, steroids, and other drugs to heighten their fighting nature. Sharp spikes, called gaffs, are attached to their legs. The cocks are thrown into a pit from which they cannot escape. They slash and peck at one another, often until death. Spectators wager on the outcome of these fights. Cockfighting was banned by most states during the 1800s.

According to the HSUS, in Cockfighting Fact Sheet (2008,http://www.hsus.org/acf/fighting/cockfight/cockfighting_fact_sheet.html), cockfighting was illegal in all fifty states in 2008. In Cracking down on Cock-fighting: Why the Bloodsport Remains a Thriving Industry (Newsweek, March 24, 2008), Winston Ross notes that Louisiana was the last state to ban the practice in 2007. Cockfighting was a felony in thirty-seven states and a misdemeanor offense in thirteen others, although states differ in their treatment of cockfight spectators and those caught in possession of birds for fighting. The federal Animal Welfare Act prohibits the interstate transport of birds for cockfighting.

As of October 2008, Pet-Abuse.com listed 376 documented cases of cockfighting in the United States. For example, in June 2005 in Sevierville, Tennessee, the Federal Bureau of Investigation broke up a cockfighting ring, known as the Del Rio, one of the oldest and largest in the country. About three hundred birds and more than seven hundred spectators were discovered in the raid. Individual bets were said to be as high as $30,000. According to officials, it was common to have 250 fights per night at that location, resulting in dozens of dead chickens; 143 people were charged in the incident.

In January 2008 California officials discovered a cockfighting ring in Livermore. After arriving at the scene, police found a cockfight in progress. More than fifteen hundred birds associated with the ring had to be euthanized. Seven people discovered watching the fight were arrested and charged.

Dog Fighting

Spectators huddle around pits or small, boarded arenas to watch dog fights. They place bets on the outcome of the contests, which can go on for hours, sometimes to the death.

Dogs are specially bred and trained for such fights the American pit bull terrier is the most common breed because of its powerful jaws. Authorities report that the dogs are often draped in heavy chains to build muscle mass and systematically deprived of food and water. Stolen and stray pet dogs and cats are commonly used as bait to train

the fighters. The smaller animals are stabbed or sliced open and thrown to the fighting dogs to enhance their blood lust. Dogs are often drugged to increase their aggressiveness.

Dog fighting is a felony in all fifty states. Dog fighting rings are often intermingled with other criminal activities. For example, Pet-Abuse.com notes that in May 2005 Louisiana authorities broke up one of the larger dog fighting rings in the state. Police said more than 140 dogs were seized from 2 kennels in the rural towns of Church Point and Franklinton. The owners of the kennels had been under investigation for money laundering (the act of engaging in transactions designed to hide or obscure the origin of illegally obtained money) and drug dealing when authorities uncovered the dog fighting ring. Four people were arrested.

Dog fighting is not limited to southern states and rural areas. According to T. J. Pignataro, in Betting on Cruelty (Buffalo News, February 2004), drug and weapons raids by police accidentally uncovered well-organized dog fighting operations around Buffalo, New York. Authorities reported that thousands of dollars in cash and other valuables, such as car titles, guns, and drugs, were commonly wagered at the dog fights. Authorities also described gruesome scenes in which owners chopped off the heads of dogs that disgraced them by losing or backing down during a fight. Trash bags full of mangled pit bulls have also been found by city authorities in vacant fields or along city streets.

One of the highest profile cases of dog fighting is that of Michael Vick (1980), a first-round pick in the NFL's 2001 draft and a quarterback for the Atlanta Falcons. In July 2007 Vick was indicted on charges linked to dog fighting, including federal conspiracy charges involving crossing state lines to participate in illegal activity and buying and sponsoring pit bulls in fighting ventures. Vick and his associates were charged with having bought property in Virginia on which to stage dog fights; the dogs were fought over a six-year period. Dogs who performed poorly were killed violently by the dog fighting ring. Vick himself admitted to killing several dogs. He pleaded guilty and was sentenced to twenty-three months in prison. When Vick is released from prison in July 2009, Virginia authorities said he will be tried on state charges.

THE EFFECTS OF ILLEGAL SPORTS GAMBLING ON SOCIETY

Money and Crime

Because the vast majority of sports gambling that occurs in this country is illegal, it is difficult to determine its economic effects. However, the only people definitely benefiting from illegal sports gambling are the book-makers. Large bookmaking operations overseen by organized crime groups take in billions of dollars each year. The betting stakes are high and the consequences for nonpayment can be violent. Small independent bookies typically operate as entrepreneurs, taking bets only from local people they know well. Illegal bookmaking cases reported in the media range from multimillion-dollar enterprises to small operations run by one person.

Sports Tampering

In National Incident-Based Reporting SystemVolume 1: Data Collection Guidelines (August 2000, http://ww.fbi.gov/ucr/nibrs/manuals/v1all.pdf), the Federal Bureau of Investigation defines sports tampering as to unlawfully alter, meddle in, or otherwise interfere with a sporting contest or event for the purpose of gaining a gambling advantage. The most common form is point shaving, which occurs when a player deliberately limits the number of points scored by his or her team in exchange for payment of some sort. For example, if a basketball player purposely misses a free throw in exchange for a fee, that player is participating in a point-shaving scheme.

Gambling has led to some famous sports scandals, mostly in college basketball games. However, any link between an athlete and gambling gives rise to suspicions about the integrity of the games in which that athlete participates.

The professional baseball player Pete Rose (1941) is an example. On September 11, 1985, at Riverfront Stadium in Cincinnati, Ohio, Rose broke Ty Cobb's (18861961) all-time hit record. Before the end of the decade, however, Rose was under investigation by the Major League Baseball commissioner and by federal prosecutors for betting on sporting events and associating with known bookies. He agreed to leave baseball, and the case was dropped. At the time, Rose denied ever betting on baseball games. However, in January 2004 he admitted that he had bet on baseball games while he managed the Cincinnati Reds during the late 1980s.

THE INTEGRITY OF COLLEGE SPORTS. The popularity of sports gambling among college students leads to suspicions that athletes, coaches, and officials associated with collegiate sports could be wagering on the very games in which they are participating. In May 2004 the extent of gambling among college athletes was examined in Pushing the Limits: Gambling among NCAA Athletes (The Wager, vol. 9, no. 21, May 26, 2004). The article summarizes the findings of two major studies: 2003 NCAA National Study on Collegiate Sports Wagering and Associated Health Risks (December 2004, http://www.ncaa.org/wps/wcm/connect/resources/file/eb8b854c219ea54/2003_sports_wagering_study.pdf?MOD=AJPERES) by the NCAA and Correlates of College Student Gambling in the United States (Journal of American College Health, vol. 52, no. 2, SeptemberOctober 2003) by Richard A. LaBrie et al. of the Harvard School of Public Health.

Table 8.4 compares the findings of the studies. The NCAA examined gambling activities by students during the previous twelve months, and LaBrie et al. asked students about gambling during the current school year. The results indicate that approximately one-quarter of the male student athletes had gambled on college sporting events.

The NCAA opposes both legal and illegal sports gambling in the United States. Bylaw 10.3 of the NCAA prohibits staff members and student athletes from engaging in gambling activities related to college and professional sporting events. It also forbids them from providing any information about collegiate sports events to people involved in organized gambling activities.

  • The NCAA opposes sports gambling for the following reasons:
  • It attracts organized crime.
  • The profits fund other illegal activities, such as drug sales and loan-sharking (loaning money at an excessive rate of interest).
TABLE 8.4 Comparison of statistics from the National Collegiate Athletic Association (NCAA) and the Harvard School of Public Health College Alcohol Study (CAS) on gambling by student athletes, 2004
  Student athletes who gamble on anything Student athletes who gamble on any sport Student athletes who gamble on college sports Student athletes who gamble on the Internet
Study Women Men Women Men Women Men Women Men
*CAS student athletes self-reported that they played or practiced intercollegiate sports.
SOURCE: Table 1. Comparison between NCAA and CAS Statistics on Student Athletes Who Gamble, in Pushing the Limits: Gambling among NCAA Athletes, in The Wager, vol. 9, no. 21, May 26, 2004. Data from Harvard School of Public Health College Alcohol Study (CAS), Harvard School of Public Health, Boston, MA, 2004, and Executive Summary for the National Study on Collegiate Sports Wagering and Associated Health Risks, National Collegiate Athletic Association, Indianapolis, IN, 2004.
NCAA 47% 69% 10% 35% 6% 21% 2% 6%
CAS* 33% 57% 10% 33% 6% 26% 2% 5%
  • Student athletes who become involved can become indebted to bookies, leading to point-shaving schemes.

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