Pro sports and gambling interests get cozier

[clevfan]

Pro sports and gambling interests get cozier
The state of gambling
Monday, July 19, 2004

By Chuck Finder, Pittsburgh Post-Gazette



The relationship between sports and gambling, once at arm's length and now almost hand in hand, is embodied by the brothers Maloof.

The family owns both the Palms Casino in Las Vegas and, since 1998, the Sacramento Kings. The National Basketball Association approved the family's purchase of the team after they agreed to quit taking bets on NBA games in their casino's legal sports-betting operation.

"As long as we don't have the NBA in our sports book, everything is fine," George Maloof said. "And we haven't had one problem.

"They are two different businesses. We just have an interest in both. We like the gaming business, and we like the sports business. It's a unique combination.

"I wouldn't be surprised if you saw more sports owners get into gaming."

The next sports team to do that could be the Penguins, who hope to use a slot machine parlor to finance construction of a new arena.

In addition to the Penguins' plans, Steelers running back Jerome Bettis stirred a National Football League inquiry when he announced his limited partnership with Charles Betters' proposal to build a horse track, casino, hotel and retail complex in Hays.

Both plans resulted from the slots law enacted in Pennsylvania two weeks ago and bring closer to the surface the often rocky relationship between sports and gambling.

Sometimes, the relationship is direct and ugly, as in the infamous cases of the Black Sox scandal (players fixing 1919 World Series games) and Pete Rose (betting on baseball and other sports) and numerous point-shaving incidents in college basketball over the past half-century.

In recent years, though, peaceful coexistence has been the rule. ITT Corp. set the precedent by becoming the first casino-owning corporation to buy major professional sports franchises, owning the New York Knicks basketball and New York Rangers hockey teams and their home, Madison Square Garden.

Major League Baseball is considering Las Vegas as a potential Montreal Expos relocation site. And the Women's National Basketball Association moved a team into the arena of a Connecticut casino, the Mohegan Sun.

"Pro sports is full of contradictions," said Richard Lapchick, director of sport business management at the University of Central Florida, where he teaches the course "Ethical and Moral Principles in Sport."

"No one would have considered a team in Las Vegas 10 years ago. Why now? Because casinos are everywhere?" Lapchick said. "I hated to see the WNBA hook up with the Mohegan Sun, even though I know the extraordinary precautions the NBA took. The symbolism is too strong for naive young people who are starting to bet.

"Although it is not a formal union, gambling and sports are inextricably tied to revenue for both."

The NFL's policy on gambling, for instance, seems to walk a tightrope. League officials announced last month that they are looking into Bettis' ties to Betters' proposed complex. On the other hand, Bettis was allowed to participate on television in Bravo's "Celebrity Poker Showdown."

And he is employed in the NFL by a team whose owners, the Rooneys, are part of a family that also owns two horse racing tracks.

The league embraces gambling in one sense by releasing a weekly injury report so, among other stated reasons, gamblers cannot trade on information unavailable to the public. On the other hand, league officials distanced the NFL from gambling by refusing to accept a $2.1 million Super Bowl advertisement for Las Vegas.

NFL spokesman Brian McCarthy said the league has a long-standing broadcast policy to decline any spots from Vegas or Atlantic City, though Vegas continues to ask.

Outside of the NFL's control, however, is a massive sports betting machine, making the league's football games America's favorite bet.

On February's Super Bowl XXXVIII alone, some $71 million was wagered legally in Vegas and an estimated $4 billion illegally across the country.

The NFL and college football season brings $800 million in wagers to legal sports books -- equal to about 13 percent of Nevada's yearly slots revenue.

McCarthy played down the role of gambling in the league's popularity.

"The driving factor of the NFL is attributable to the game itself and its ability to bring together Americans unlike any other sport or event," McCarthy said.

As for the league's actions, as in the current investigation into Bettis, McCarthy added, "Our concern with protecting the integrity of the game is our central issue. We've been very aggressive in our stance."

To George Maloof, however, it's no wonder the Super Bowl and NCAA men's basketball tournament are the most watched and bet-upon yearly American sports events.

"When people have a bet on it, they're going to be interested. When they're interested, they're going to watch on TV. When they watch on TV, that helps the ratings," said Maloof.

And those ratings put money in the pockets of the networks, which put money in the pockets of the leagues.


Facts and figures


Gambling is legal in some form -- whether casinos, tracks or lotteries -- in every state except Utah and Hawaii.

But illegal gambling also flourishes, from bookies taking bets over the phone to online betting services, where market research firm Christiansen Capital Advisers estimates that $7 billion will be wagered this year, almost half on sports. Even the profligate fantasy leagues are considered illegal wagering.

President Clinton's Gambling Impact Study Commission in 1999 estimated illegal sports gambling in this country ranged between $80 billion and $380 billion annually.

Reams of newsprint and hours of talk radio were expended over a National Collegiate Athletic Association survey two months ago that reported that 35 percent of male student athletes had wagered in some way in the past year. And $700 million each year gets bet by the general public on amateur athletics. Some $70 million of that -- the equivalent of the legal book on the Super Bowl -- is wagered illicitly on the NCAA basketball tournament itself.

The basketball point-shaving cases involving gamblers and players from New York University, Kentucky, Boston College and Tulane weren't merely road bumps in history. In the past decade, point-shaving and student-athlete betting has resurfaced with Northwestern, Arizona State and Florida basketball, Boston College football and even Maine baseball implicated.

When coaches are in the middle, it's deemed an even worse sin against the NCAA, as when ex-Washington football coach Rick Neuheisel got into an NCAA basketball pool so pricey that it cost him his job.

For the past century or more, the people running professional sports have tried to put a lid on gambling within their games, still today posting prohibitions and warnings around locker rooms and clubhouses. Nevertheless, betting ensued, resulting in baseball suspensions.

The Black Sox of 1919 begat Detroit's Denny McLain in 1970. Hall of Famers Mickey Mantle and Willie Mays received temporary bans in 1983 because the ex-players promoted Atlantic City casinos. In 1989 Cincinnati's Rose was banned from baseball for gambling on games as a player and manager. His welcome back into baseball's good graces reportedly stalled earlier this year after he was spotted inside Vegas casinos.

The NFL in 1963 suspended Detroit's Alex Karras and Green Bay's Paul Hornung for betting on their own teams and others. In 1969, the league forced Jets quarterback Joe Namath of Beaver Falls to sell his portion of a Manhattan bar because the clientele included known gamblers. In 1971, Houston Oilers center Jerry Sturm was offered $10,000 by a Los Angeles gambler to throw an Astrodome game against the Steelers, though he reported it to his coach and the league beforehand.

Most recently, in 1999, former 49ers owner Eddie DeBartolo was fined $1 million by the league and suspended after paying a $400,000 bribe for a Louisiana casino license.


A geopolitical shift


In recent years, though, the gambling landscape has changed.

The NBA and NHL have seemingly embraced it, to a degree, since 1994.

That's when Toronto entered the NBA as an expansion team. Both leagues permitted ITT Corp., a conglomerate owning three Vegas casinos at the time, to purchase half of the NBA Knicks and NHL Rangers.

In return, their sports books -- Ontario's lottery and ITT's casinos -- were forced by the leagues to remove any hockey and basketball betting from their wagering.

That set a precedent for the Maloof family, who bought limited ownership in 1998 and a controlling interest in 1999 of the Kings, likewise erasing the NBA from their sports book.

With the WNBA's New York Liberty and Sacramento Monarchs falling under those ITT and Maloof ownerships as well, it wasn't such a radical departure for the league to relocate the Orlando Miracle to a casino, the Mohegan Sun, and rename the team the Connecticut Sun.

The NHL also gave its blessing to the Calgary Flames, whose officials two years ago applied to place a casino in their arena. Last summer, however, those efforts were redirected toward a stand-alone parlor. And last month, NHL commissioner Gary Bettman said he had no problem with the Penguins operating a slots parlor and using the revenue to build an arena.

As for Major League Baseball, it has accepted advertising from casinos. Dodger Stadium and Bank One Ballpark have Las Vegas signs.

Could baseball relocate the Expos to Las Vegas? Officials there have plans for a $420 million, retractable-roof stadium behind Bally's and Paris Las Vegas. Major League baseball's relocation committee members have twice visited the tourist destination and America's fastest-growing city, but some baseball insiders are putting odds on Northern Virginia and Washington, D.C., as the front-runners for the franchise.

In Pennsylvania, legislation approved last month allows slots licenses at up to 14 venues in the state -- seven at racetracks, five at stand-alone locations (including one in Pittsburgh and two in Philadelphia) and two smaller casinos at resort hotels. That's a total of 61,000 slot machines.

The Penguins have indicated they will pursue the license for a parlor in Downtown Pittsburgh for up to 5,000 slot machines and then use future revenue as a way to finance a new arena.

"If they can get that done, obviously that's great," said George Maloof. His basketball-operating brothers, Gavin and Joe -- once wooed as potential Penguins partners by previous owner Howard Baldwin -- are striving to get public funding to help build a new Kings arena in downtown Sacramento. "It's a great revenue boost."

Then the casino owner added, almost sounding envious: "Sixty-thousand slots. That's a lot of machines."