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: The Sports Law Professor

Tennis' Problem with Gambling

By Jeffrey Standen

I'm no gambler. My infrequent trips to the local Indian casino, coupled with my annual entry into a friendly March Madness pool, have made it clear to me that gambling is, at least for me, a losing proposition. Yet just because I lose doesn't mean everyone does. Someone's a happy counterparty to my bets, even if it's the rake.

That's what people sometimes forget about the betting scandals that have come to light in professional tennis (and of course pro basketball): bets are exchanged. Every seller of a wagering proposition has to find a buyer. It's just a market transaction, albeit a prohibited one.

There's nothing necessarily wrong or obviously unwise with banning certain market transactions. The usual reason has to do with morality (prostitution is an example) or with perceived neighborhood effects (controlled substances). I'm not going to argue that betting by athletic participants on their own games has no moral dimension or no neighborhood effects. (I've done that before.) Prediction exchanges on sports results has many beneficial aspects too, by the way.

What I want to argue here is that, in the world of impermissible sports wagering, betting by tennis players in particular is the least of our worries. In other words, if you don't care about tennis betting, you're right.

1. It is predictable that tennis players in particular would bet on their matches. Without the vagaries of teammates' play, game outcomes in individual sports are easier to predict. Higher-seeded tennis players customarily prevail over inferior players. The very top players, like Federer and Nadal, often win without losing a single set. Strong favorites in any sport draw heavy betting action in disproportion to the chances of winning: people love to bet the favorite. Hence bookies must offer more favorable odds (or larger point spreads) to attract sufficient wagers on the underdog to even out the betting action. Disproportionate odds help increase the number and size of bets. The odds are "wrong" (at least in terms of the comparative strength of the players), the money is flowing, the action is everywhere. Players might well be tempted to join in the fun.

2. Individual sports contests are also easier to throw. No cooperation or coordination among teammates is necessary: just a few bad swings of the racquet or golf club and the deed is done. The favorite has lost but the bet has been won. Some might be surprised that betting scandals in tennis have not been more numerous. How could anyone, even an opponent, detect with conviction when an opponent purposely returns a ball just wide, or a bit low and into the net? The answer is that in situations where there is heavy betting action (and thus money to be made) the player who has to throw the match would be the heavy favorite. (After all, the weaker player cannot plausibly throw a match he was destined to lose anyway.) One or two bad shots wouldn't suffice. The superior player would have to intentionally misplay shot after shot, making himself far more vulnerable to detection. So illicit player gambing in tennis appears uncommon.

3. Golfers also could easily and without chance of detection lessen their contest performance. Yet to my knowledge golf has never been disturbed by the news of a player purposely throwing a tournament. In tennis, the disincentive to bet comes from the ease of detection should a heavy favorite intentionally lose. In golf, the problem is it's not easy to identify the player who wins when another loses. With multiple competitors, the one other player who could profit from the leader's purposely losing a tournament may not be identifiable until the final round, or even the final few holes. Until that time, too many competitors would benefit from one player losing, but no one player would benefit sufficiently to induce the competitor to shirk. Golf, like tennis, has endemic properties that are resistant to game fixing.

4. Nonetheless, short of the big payoff from game fixing, tennis players can make some money from placing bets against themselves and then losing. It won't be the big money that a heavy favorite would make from throwing a match to a low seed, but it appears there's enough action on the side bet, even in matches between journeymen pros, to make throwing a match worthwhile financialy. To continue the comparison between the predominate individual sports, a golfer similarly could bet against himself. Again, unless he were Tiger Woods (who because of the heavy action on him could win a large amount), the player couldn't practically fix a match, but could take whatever action he could find and bet against himself to make money. It is always easier to lose than to win, or hit a bad shot instead of a good one.

5. So the recent tennis scandals must be kept in perspective. The money's not as big as a fixed match by a tournament favorite. The players most likely to bet against themselves are journeymen. The ultimate results of the tournament will not be changed. The sport will go on, even if a few lower-level matches are determined by betting rather than on the court.

6. The other important factor is that all bets require a counterparty. Players who wish to bet against themselves must find a sucker to take the action. Since presumably no one would willingly stand as the counterparty to a player's bet against himself, players who wish to profit from a bet to lose must find cut-outs to place bets for them, or must settle to taking some percentage from some others who can bet without easy detection. In other words, the athlete is the agent, never the principal. (It is possible that a bettor would willingly take an athlete's action, much like investors take the opposite side of insiders selling stock of their own company, but unlikely, given the athlete's control over the outcome.) This reduced role limits the athlete's profits from the bet, further diminishing the likelihood of thrown contests.

7. As far as the counterparties go, why should the rest of us care? Implicit in any exchange of a prediction is that the some members of the opposing parties may have superior information. In the sports world, such information could take the form of injury data, player performance information, coaching advantages, and the like; it could also stem from information direct from the athlete's mouth. Any bettor is by definition aware that a roughly equal number of bettors is taking the opposite position. The market for bets seems to clear itself without the need for public intervention; a healthy, thriving market presents no evidence of "market failure." Some legal scholars see a market failure under every rock, calling for legal measures to cure imagined economic problems. In the betting world, both sides to a transaction are vigilant in watching their money. If they're not, they'll learn or get out of the market. Bookies are skilled at discovering fixed contests. The market functions fine.

8. All that's left is the claimed spillover effects. The supposition is that members of the public will lose interest in a game that might be fixed. I doubt it. Sports fans seem to tolerate all kinds of contests that are obviously not on the level: fans flocked to see pitchers trying to strike out known steroid users; fans will soon tune it to pro football games whose gargantuan linemen boast seemingly unnatural physiques. We'll even tolerate unmotivated athletes who seem to care little about winning but much about their salaries. Sports is full of corruption. Indeed, it's part of its fascination, sort of like the marital habits of celebrities is for fans of popular culture. Tennis goes on, betting scandals or not. Players can choose to lose a match for all kinds of reasons having nothing to do with money. That money may occasionally provide a motivation is consistent with the vagaries of individual contests.

Full post as published by The Sports Law Professor on September 01, 2008 (boomark / email).