Sports Media’s Big Gamble on the Betting Industry

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This is on the media's midweek podcast.

I'm Brooke Gladstone.

This Monday will mark the grand finale of college basketball's biggest event.

ESPN NCAA College Basketball Action.

The big dance, as it's known, is also the biggest in terms of money expected to change hands.

According to the American Gaming Association, the total bids could combine to $3.1 billion through bracket pools and wagers, as three times more than how much was estimated to have been bet on this year's Super Bowl.

So, March madness is madness.

All this because in 2018, the Supreme Court overturned the 1992 law banning state-regulated sports gambling.

Now 38 states and counting have legalized it, and the industry has exploded.

Oh, you've probably seen the ads.

You think life is short?

Football is short.

The regular season is just 18 weeks.

So cherish every over and under before it's over on FanDuel.

Looking for jackpots?

Try it this way.

The DraftKings new sports book app.

It's easy.

All you have to do is download it, make a deposit, pick a sport, place a bet, boom, goes a dynamite.

Out comes the cash.

Simple.

Almost every major national sports outlet, ESPN, The Athletic, Bleacher Report, NBC, CBS, The Ringer, has partnered with at least one of the four major sports betting companies in the country.

FanDuel, DraftKings, MGM, and Caesars.

Big money is changing hands.

And so what does that mean for sports journalism?

Today we're sharing a story from on the media producer Rebecca Clark Callender.

It first aired on the show a year ago.

There are two top-of-mind ways that I think a sports journalism gambling scandal could erupt.

Brian Moritz is an associate professor and sports media scholar at St.

Bonaventure University.

First one is kind of like journalism insider information.

When as a reporter, you find out somebody's not going to play, somebody is injured.

So, you grab your phone, and there are two apps next to each other.

One is Twitter, the other one is FanDuel.

Moore says this particular scenario is unlikely because major sports leagues are monitored constantly.

An MLB or WNBA or NFL player can't twist an ankle without everyone knowing.

And a reporter would lose credibility for a gambling-first approach.

So, improbable, but not impossible.

And then there's scenario number two.

It's a reporter working for a media outlet that has a partnership with a sports book reporting information that directly influences a betting line.

This actually happened just before last year's NBA draft.

One of the things that you can bet on is who is getting drafted in what position.

So who goes first overall, who goes second, who goes third.

And what happened in the summer of 2023 was Shams Jarania, he covers the NBA for the athletic, and he's one of the top insiders in this realm.

And he also has a partnership with FanDuel.

Shirania has 2.2 million followers on X.

His ESPN counterpart, Adrian Wojnarowski, has 6.3 million.

NBA insiders race to get news first.

And when they tweet something, it's gospel.

Moritz said when he first heard rumors about the death of Kobe Bryant, he didn't really believe it was real until Wojznarowski tweeted it.

Anyways, back to Shams.

And so what Shams did was he tweeted out on draft night that Scoot Henderson was gaining serious momentum to go number two with the Charlotte Hornets.

And that went against what was the accepted wisdom.

That report from Shams shifted the betting lines.

Henderson went from an underdog to a heavy favorite for the second pick.

And people bet on it because you can still make money on favorites as long as you're willing to put up big bucks.

Not to mention some who gambled on other prospects going third.

And then...

With the second pick in the 2023 NBA draft,

the Charlotte Hornets select Brandon Miller.

Shams was accused of intentionally warping the betting lines, and he was hit with a wave of criticism on YouTube and X.

FanDuel had to publish a statement saying they didn't have access to Shams' reporting before he shared it.

Shams has denied this and there's never been any reporting to suggest that this was motivated by the gambling line.

Since Shams had only said Henderson was gaining momentum, the scandal petered out.

But Moore said credibility as an insider comes down to perception, and journalists who gamble on their beat or enter partnerships with sports books are taking a risk.

How sports reporters should manage the relationship with an industry so closely tied to their profession has been a question from the start.

So, at the very first pro baseball games, there was very active, enthusiastic betting in the stands with people taking bets on whether the next pitch would be a ball or a strike, whether the wind would change directions.

That's Danny Funt, a contributor to the Washington Post, who has written extensively about the gambling world.

In 2021, he penned an article for Columbia Journalism Review titled All All In, detailing the history of the media's relationship with sports betting.

He says the story begins with 19th century baseball.

When the National League was formed around that time, its founders were adamant that this was an opportunity to stamp out sports betting so that you could go to a game and just be a casual fan without having betting rubbed in your face.

Despite best intentions, some 40 years later, they still hadn't eradicated the scourge.

The Black Sox scandal, where eight members of the Chicago White Sox were accused of taking bribes to lose the 1919 World Series, scarred Major League Baseball for decades.

But intentionally losing games for kickbacks wasn't limited to baseball.

Las Vegas started taking bets in the late 1940s.

Just two years later, Max Case, sports editor of the New York Journal American, won a Pulitzer for uncovering college basketball players taking bribes.

The bad press motivated Congress in the 1950s to enact a 10% tax on sports gambling revenue and in 1961 to pass the Federal Wire Act, criminalizing the use of wires to place bets or share gambling information across state lines.

And while plenty of investigative work shone a light on gambling's dark side, media also benefited from the action.

People who gamble are like your best readers, right?

Brian Moritz.

They care about everything.

What is a gambler's edge?

It's information.

Studies have shown sports bettors watch significantly more games than non-betters do.

The kind of devoted audience a news outlet would go to any lengths to lock in.

In 1976, CBS hired Jimmy the Greek Snyder for their NFL pregame show.

Jimmy, a Vegas odds maker and columnist, was just freshly pardoned by President Ford for a felony conviction under the Federal Wire Act, and he was known to drop some not-so-subtle hints.

I mean, he's a big man out of the lineup, offensively and defensively.

It would make a difference of at least two points.

Jimmy eventually got fired for making racist comments, but over on NBC, there was Pete Axthelm, who tried to split the difference between light-hearted gambling reports and darker ones.

We've had some fun trying to pick winners, maybe even bet on them.

But there's a side to gambling.

It could be as bleak as this new york winter day outside this betting parlor and mickey charles who wrote a gambling column for the philadelphia inquirer and correctly predicted the super bowl final score on the today show in 1978 he later became a broadcaster on a brand new channel espn

launched in 1979 the fledgling sports channel broadcast a gambling show from caesars palace during the nfl playoffs

And the exact same thing happened with HBO soon after its founding.

Danny Funt.

They were airing a show that explicitly catered to sports bettors.

Newspapers, along with television, were taking notice of gambling customers.

In a report released in the late 80s, an Associated Press survey found that between 1982 and 1984, the number of papers running betting lines jumped 20% for college football and 10% for the NFL.

Altogether, three-quarters of the 125 papers surveyed had football spreads.

And then in 1992, Congress flipped the table.

The Professional Amateur Sporting Protection Act.

Arizona Senator Dennis D.

Concini.

States would not be allowed to sponsor, authorize, or license sports lotteries or any other type of sports betting that is based on the outcome of professional or amateur games.

PAPSA, as the bill was known, brought sports gambling, along with its growing presence in sports media to an abrupt halt for nearly 30 years.

And slowly, in its absence, a new business sprung up.

FanDuel and DraftKings, they were two very small startup companies, one founded in the UK, one founded out of a townhouse in Boston.

Albert Chen worked at Sports Illustrated for nearly 20 years, and he's the author of Billion Dollar Fantasy, the high-stakes game between FanDuel and DraftKings that upended sports in America.

They grew over a handful of years because in an absolute avalanche of advertising, which caught the attention of a lot of lawmakers and prosecutors who thought, what are these companies?

They sure sound like gambling companies, when in fact, these ads were about fantasy sports.

Fantasy sports were legally classified as games of skill, not chance, meaning they escaped the regulations.

By 2015, these two companies were advertising so much that on an NFL Sunday in September of 2015, there was an ad from one of these two companies on TV every 90 seconds.

They were the biggest advertisers in America, bigger than any car company, bigger than Geico.

DraftKings and FanDuel allowed people to put money on sports from their couches and across state lines without catching a flight to Vegas.

Casinos felt unfairly restricted and left out of the profits, leading New Jersey Governor Chris Christie to bring a suit.

Breaking news to Supreme Court this morning, striking down the federal ban on sports betting.

Now it leaves it up to the moment happens in 2018.

These two companies already have a leg up.

So their actual products were very good.

When you're an MGM or a Caesars,

those are legacy casino gambling companies that have to build up infrastructure for the tech.

It takes a long time and you almost have to reinvent yourself as a company.

But reinvent they did.

Everyone had an app, a casino in your pocket where the house is a computer.

And now they were all competing for new features.

Not a neon-lit promenade or velvet covered lounge, but micro bets, which looked a lot like what was happening in those 19th-century baseball stands.

It's funny we've come full circle in letting people take bets in the stands.

Danny Funt.

Full circle and letting them bet on all sorts of ridiculous minutiae, like whether the runner on first will try to steal second or whether this next play in a football game will be a run or a pass.

Like the final play of this year's Super Bowl.

Kansas City Chiefs are lined up, eight seconds to go in overtime.

They're down by three points.

I can bet on whether or not the next possession results in a touchdown.

Not just the biggest play of the Super Bowl, but literally every play of every game just about.

It's really turning sports betting into kind of like pulling the handle on a slot machine.

Instant gratification.

And if betting once every few hours is addictive, imagine what betting once every few minutes is.

Coincidentally, around the late 2010s, sports media needed cash.

Between 2011 and 2017, ESPN lost nearly 13 million television subscribers as homes cut the cord.

Time Warner parted ways with Sports Illustrated in 2017.

And of course, there was 2020.

This astounding and unprecedented story continues to evolve at halftime with Adrian Warjanowski.

He has just tweeted within the the past two minutes that the NBA is suspending the season.

Media companies in need of a revenue boost found saviors in gambling companies with ad dollars to spend.

Meanwhile, DraftKings is paying the Chicago Cubs $100 million over the next 10 years to open a betting parlor adjacent to Wrigley Fields.

FanDuel is the official betting partner of the NBA.

And the thin veil broadcasters like Jimmy the Greek sat behind dropped.

It's an 11-point 11-point difference, which is a very significant number to a few of our friends.

A few indeed.

Since games don't end with a 10 and a half point difference, and you know what I'm talking about.

Like it's one thing if we're playing a game on television or we're watching it and they're letting you know, hey, you can do this.

Hey, if you want to gamble or whatever.

Sports commentator Bomani Jones on CNN last month.

But the crux of the broadcast now seems more and more geared toward making people gamble than it is talking about the games.

Now, some reporters had long argued that that gambling was worth coverage, like Chad Millman, former editor-in-chief of ESPN the magazine, who established a gambling beat filled with actual reporting on the industry.

He was pushing the boundaries at ESPN to take it seriously as a coverage subject, but then he broke off and helped found a site called the Action Network that provides a lot of betting analysis and content for mainstream publications across the country.

All sorts of newspapers from the New York Post to the Philadelphia Inquirer.

The Action Network has contracts with sportsbooks.

So when you read their content on a newspaper's website and click a link to place a bet, they and the paper receive a one-time fee for directing you there.

Or in some cases, they get what they call a revenue share.

Which is essentially a cut of our lifetime losses betting on sports.

Wow.

You've got these outlets presenting themselves to readers as, we're going to help you beat the sports books.

And then behind the scenes, they're profiting on the money we lose betting on sports.

And it's something I think a lot of people, even hardcore sports fans, are oblivious to.

And when gambling companies and the media companies that are in bed with them are making money off of our losses, it's not in their best interest to address the elephant in the room.

There are people who say you should never write about sports betting without saying it's an addictive product with deceptive business practices that's hurting millions of Americans' health and financial well-being.

And I get that.

It's something I grapple with in my work.

Something else to grapple with is that doing a deal with a betting site isn't without risk.

Sports Illustrated has laid off most of its employees.

That's according to a union for the magazine's workers and the News Guild of New York.

Sports Illustrated is a great example of why sports betting cash isn't a panacea.

Just like ESPN, they licensed their equally storied name to a sports book.

So in a number of states, you could bet on the Sports Illustrated app.

That wasn't enough to write the ship.

After Front and I spoke, Sports Illustrated's publishing rights were acquired by Israel's Minute Media.

But he says the magazine's woes should be a warning shot for everyone else.

There's a very aggressive push to acquire customers when states legalize.

So in a place like North Carolina now, their airwaves are blanketed with ads.

New players like Fanatics and the British company Bet365,

when they enter the picture, they advertise extremely aggressively.

But that's going to dry up and they're going to want to be profitable before too long and be a little stingier with their advertising dollars.

Gambling gets legalized.

It becomes accessible.

Money floods the market.

There's a lot of genuine interest about it.

All right, cool.

Brian Moritz.

But now let's take a breath.

Let's start putting up our walls here.

It comes back to the audience and making sure that when we report something about their favorite team, that they can trust that it's being reported to them, not to get them to bet on it, but to inform them.

And I think framing all of our ethical guidelines from that perspective, that's the path forward for sports journalism.

Without that, sports media is gambling with its own reputation, with its journalists, and with consumers' money.

And who knows, maybe it will all work out.

But rule one of sitting down at any table is never bet more than you're willing to lose.

For On the Media, I'm Becca Clark Callender.

Thanks for listening to our midweek podcast.

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