Good Time Charlie’s Got the Blues. . . . but that could change
We’ve been telling you about the betting equivalent of baby steps being taken in recent months by the president of the Indianapolis-based National Collegiate Athletic Association, former Republican Massachusetts governor Charlie Baker, toward eliminating prop bets – wagers on specific events or outcomes in a game – involving collegiate athletes.
Baker himself was quietly working in a handful of states, most notably first in Ohio, toward this goal, notable for the fact that: (1) the NCAA did not initially seek to restrict prop bets on individual student-athletes; (2) Baker was seemingly undertaking his as a personal initiative, seemingly not enlisting the usual full faith and credit of the NCAA infrastructure to aid him; and (3) there was no public effort to advocate for change in the NCAA’s home state of Indiana.
Nevertheless, after Baker, who played basketball at Harvard, was successful in convincing Ohio to ban prop bets on the performance of individual college athletes, he took to social media – not choosing for example, to operate through an official statement issued by the NCAA – to expand the push as both professional and collegiate athletes were coming forward to detail the pressure placed and abuse heaped upon them over how their performance impacted bettors.
The Athletic this week detailed how “Gambling has made ends of games miserable for college basketball benchwarmers,” citing the case of Purdue University’s Carson Barrett, who tore his meniscus earlier this year and deferred surgery so that the senior might at least see some minimal playing time in a meaningful season for the Boilermakers.
“This season he’s played a grand total of 21 minutes and scored six points. Three of them came in the NCAA Tournament,” The Athletic points out to readers. “With 37 seconds left in a game long decided, Barrett drained a baseline 3 against Grambling State, putting himself in the box score of Purdue’s first-round victory. As the ball swished through the net, the bench erupted, Barrett’s teammates knowing full well what he’d sacrificed and endured. His bucket would be the last for the Boilermakers as Purdue cruised to a 78-50 win. Back in the locker room, Barrett picked up his phone and scrolled through the congratulatory texts from friends and started to search through his DMs on social media,” where he found a litany of abusive responses from gamblers who were furious that his basket meant that the Boilers beat the spread.
The Athletic notes that “conversations with basketball players, from starters to scrubs, throughout this NCAA Tournament reveal that plenty are getting through. ‘Oh, yeah, it happens all the time,’ Purdue center Zach Edey said. ‘Like after every game, probably.’ Starters such as Edey are most frequently targeted for the prop bets that caught Baker’s ire. People have suggested, not necessarily politely, that Edey send a Venmo for the money he cost them because of his failure to reach whatever threshold Vegas had set for his individual numbers.”
Baker told CBS News back in November that “prop betting in some respects is one of the parts I worry about the most.” Now Baker and the NCAA are taking steps to encourage individual states to ban wagering targeted at a certain statistic or specific player, which officials fear can make them particularly vulnerable to – ahem – external influence.
“Sports betting issues are on the rise across the country with prop bets continuing to threaten the integrity of competitions and leading to student-athletes and professional athletes getting harassed,” Baker laments. “The NCAA has been working with states to deal with these threats and many are responding by banning college prop bets.”
In late March, he reveals that “This week we will be contacting officials across the country in states that still allow these bets and ask them to join Ohio, Vermont, Maryland and many others and remove college prop bets from all betting markets. The NCAA is drawing the line on sports betting to protect student-athletes and to protect the integrity of the game – issues across the country these last several days show there is more work to be done” – an apparent reference to the investigation of a Toronto Raptors player and the Temple University basketball program.
The new Ohio law bars bettors from wagering locally if caught harassing players, coaches, or officials either at games or online.
Sportico writes that you should “expect to see counterarguments to Baker’s objective. Consumers who like placing prop bets could assert they should have a ‘right’ as law-abiding adults to bet on what they wish. Sports betting operators could also urge against Baker’s plan on grounds that it is better to legalize and regulate than to render illegal and invite a black market to fill the vacuum and take bets. This has been the argument used against those dozen states that don’t allow wagering on local college teams.”
“Congress could also play a role,” suggests Sportico, observing that the 2018 ruling in which the Supreme Court of the United States invalidated the Professional and Amateur Sports Betting Act of 1992, paving the way for the patchwork system we see today, “didn’t foreclose the possibility of Congress passing federal sports betting legislation; it forbade the federal government taking away the autonomy of states to legalize sports betting when there is no accompanying federal standard. Given rising concerns over prop betting and given the high-profile sports betting controversy involving Los Angeles Dodgers superstar Shohei Ohtani, perhaps Congress in the coming months or years will consider whether certain types of bets ought to be deemed illegal.” Even so, “It wouldn’t come without potential legal fights. States might argue Congress lacks the authority to preempt state betting laws. For its part, Congress would rebut by insisting sports betting impacts interstate commerce and thus falls within the purview of federal law.”
But back to the specifics of regulating prop wagers. The Indiana Gaming Commission is loath to regulate where the General Assembly has not carved out a specific role for them, and would certainly look for legislative guidance.
Hoosier lawmakers might be particularly sensitive to NCAA requests given the special relationship with the organization the state hosts, and the resultant agreements the State and City of Indianapolis have to host certain key NCAA tournament events, in particular men’s and women’s basketball regionals and lucrative men’s (2026 and 2029) and women’s (2028) basketball Final Four events. Indeed, the NCAA could impose a new policy restricting events in jurisdictions that allow prop wagering on collegiate players or even on matches.
But there’s also a larger question beyond just prop bets.
The Athletic notes that Colorado, Arizona, Massachusetts, New York, Pennsylvania, and Oregon already had rules in place prohibiting prop bets on college players; Illinois, Connecticut, and Iowa don’t allow them for in-state teams; and Ohio, Vermont and Maryland also removed them this year.
On Wednesday, the Louisiana Gaming Control Board banned collegiate prop bets for the “safety and integrity” of athletes as of August 1. The new policy covers any wager “on an individual’s performance or statistics participating in a college sporting event.” Only prop bets “based on full team statistical results” will be permitted.
However, The Athletic explains, “there is no undoing the more standard bets based on the spread and the over/under. Once verboten, talking about the Vegas line is now commonplace on broadcasts, and the spread regularly appears next to the schedule on most websites. No doubt starters are subject to gamblers angry on misses with those bets as well, but the cruel twist is that some of the people who feel the heat the most are the ones who have absolutely no impact on the real import of a game – the winning and losing,” such as, perhaps, Purdue’s Carson Barrett in that early tournament game in March.
And the NCAA’s Baker also expresses concern that beyond simply player stats related to prop bets, the integrity of the larger game could be compromised if, for example, a student-athlete intentionally seeks to achieve or underperform their individual player props so someone can win a bet, perhaps changing the outcome of a particular match.
How much of a fight would operators wage against a Hoosier prop bet ban?
As we’ve told you, unlike some states, the Indiana Gaming Commission, given that there is no statutory requirement to break out certain categories of wagers, does not make public any details about prop bets. But Legal Sports Report (LSR) tells readers Tuesday that “Banning college player props could cost sportsbooks roughly $200 million in annual revenue, according to a financial note from Citizens JMP Securities,” an amount that is “roughly 1.8% of the $11.1 billion total US sports betting revenue generated last year, according to LSR analyst Eric Ramsey.” Because 10 of the 38 states to legalize sports betting already have outright bans on those types of bets, while many more have different sets of restrictions on them, “That makes player props as a percentage of bets placed on college sports lower relative to other sports. JMP estimates they typically account for 50% of wagers at some sportsbooks. Collegiate betting across all formats represents around 15% of the national totals, or about $1.7 billion for the last calendar year. Under JMP’s assumptions, college player props would represent about 12% of all collegiate betting revenue.”
Here’s where you could see operator pushback, notes LSR: Providing “safeguards against prop manipulation … could drive more action offshore, where illicit betting largely goes undetected, said Jordan Bender, a senior equity research analyst at Citizens JMP Securities. ‘At the end of the day, bettors will find a way to wager on events and players, and we believe the effort to ban individual player betting will likely only push players back offshore, while we estimate over 50% of wagers today are in the United States,’ Bender said.”
LSR adds that the market leaders, DraftKings and FanDuel, “would be most affected by the ban, as their sportsbooks rely more on props and prop-driven same-game parlays than other operators, Bender said. ‘We estimate the long-term, worst-case scenario on EBITDA is $45M for DraftKings and $55M for FanDuel if the ban is implemented across all U.S. states. Therefore, the loss in market value does not reflect the potential EBITDA loss for the two sports betting leaders in the space. That said, we believe these operators have the pieces in place to shift wallet share from prop-style betting into traditional game outcomes.’ ”
And, of course, it’s not just the money foregone on prop bets themselves, but the potential for betting habits to be entirely transformed when bettors learn that they may find better odds overall overseas.
This will be an interesting debate, likely in 2025, and probably as part of a much larger omnibus bill . . . which means, as we saw in 2019 when the NCAA was largely agnostic about the organic legislation, that the individual contours of sports wagering will likely be ignored.