NBA Arrests Spotlight Sports Betting Risks Amid Billion-Dollar Sponsorship Deals | Ukraine news

American sports have suffered another blow to their reputation after this week’s arrests of an NBA coach and a current player over alleged ties to illegal sports betting and rigging poker games.

This is the latest example of how gambling has entered sports and how players break the rules. But for those who think this means leagues and teams are stepping away from partnerships with mobile sports betting apps, let’s be clear: it’s not worth betting on.

Direct sponsorship deals between various legal bookmakers and leading American leagues cost billions of dollars over the coming years and, according to experts, may exceed $1 billion per year. Such figures are cited by Victor Matheson, an economist and professor at the College of the Holy Cross, an expert in sports business and gambling.

Such sponsorship deals are “clearly very important” for the finances of leagues and teams, Matheson notes. Even with substantial resources, the league will not turn down revenues from sportsbook partnerships.

Since states began legalizing sports betting after the Supreme Court decision in 2018, sponsorship contracts have grown rapidly. Today nearly all major U.S. leagues and most teams have similar deals. Some clubs, notably the Arizona Cardinals, Arizona Diamondbacks, and Washington Wizards, have signed deals to host physical betting outlets at their stadiums and arenas, Matheson notes.

Legal sports betting in the United States reached $160 billion last year – far more than lottery spending. Gambling gross revenue stood at $13.7 billion, up 23% from 2023, according to the American Gaming Association. Most bets are placed online.

Gambling has become a large industry in less than a decade, and the money continues to flow into club coffers.

«Raw figures on sports gambling, in my view, are not yet impressive; however the fact that it’s a new source of income – and new sources of revenue are hard to find – encourages everyone.»

Direct funding through sponsorship is only part of the overall revenue stream: bookmakers spend hundreds of millions on advertising each year, primarily during games, in pre- and post-game programs. This boosts the revenues of networks and streaming services, particularly through broadcast rights and processing fees.

The total profit from betting drives up spending on broadcast rights to tens of billions of dollars. This is extremely important in an era of declining viewership, when other forms of entertainment are also competing for the public’s attention.

«This is a way to keep viewers engaged in games they often deem meaningless.»

Unlike professional leagues, the NCAA currently does not have sponsorship deals with bookmakers. The unpopular period preceding the NBA scandal news changed the tone: the NCAA announced that it would allow students and staff to bet on professional sports starting November 1.

Even as the NCAA continues to restrict betting on college sports, fan interest in the March Madness tournaments generates substantial wagering and audience flows – estimated at about $3.1 billion in bets in 2024, according to the AGA.

“How do you convince networks to pay billions for college basketball?” Matheson explains. “Because millions of people watch, and March Madness draws attention precisely because of bracket memories.”

Legal sports gambling had previously been limited to Las Vegas until the Supreme Court opened the path to nationwide legalization in 2018. But sports betting has always existed – even in ancient Olympia in 776 BCE, says Matheson.

At that time, prop bets on individual events in the game existed, but now fans have a “pocket casino” – a new format that radically changed the way people interact with the game, notes Michael Lewis.

Criminal charges against NBA arrestees confirm that leagues were not always ready for the risks associated with individual players’ involvement. As Jonathan D. Cohen, author of Losing Big, said, “the leagues hardly knew where they were headed, they just knew they could make a lot of money from this.”

“We probably should have allowed legal sports betting – perhaps even online. But it would not be as it is now had we approached it more cautiously,” Cohen added in a CNN interview.

Arrests in the NBA come on the heels of prior disciplinary actions in baseball and the NFL over bets on their lines; all cases illustrate the risks for leagues that rely on revenue from betting apps. “Leagues could ruin their sports if they don’t prevent this,” warns Lewis.

CNN correspondent Auzineya Baykon also contributed to this piece.