Industry panel: Offshore sports betting “the elephant in the room”

February 22, 2024 6:36 PM
Photo: Shohei Ohtani flickr photo by zoso8203 shared under a Creative Commons (BY) license
  • David McKee, CDC Gaming Reports
February 22, 2024 6:36 PM
  • David McKee, CDC Gaming Reports

“The space has really evolved over the last 10 to 15 years,” said Sebastian Jedrzejewski, setting the tone for “Innovation and Integrity,” a compliance webinar held today as part of the “Gamble for Good” series.

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The intention of the ongoing webinars is to “help the industry to tell its story, making gambling inclusive — and better.” Participants included New Jersey Division of Gaming Enforcement Director David Rebuck, SharpRank founder Chris Adams, Major League Baseball (MLB) counsel Leo Villalobos, and Jedrzejewski, U.S. Integrity’s director of regulatory affairs.

Jedrzejewski said that detecting potential sports-betting integrity issues involves information sharing. “The biggest measurement for the effectiveness of these [tools] is the underlying policies that everyone puts into place. He added that those policies rely on the attention paid by those who enforce them. “Globally, it’s always going to be a state-by-state model and sports is a global event.”

Villalobos said that, from his major-league perspective, collaboration “has come a long way over the last five years,” even though “the starting point for this conversation was a little rocky. “Integrity,” he continued, “isn’t just a talking point hidden behind another legislative ask for an integrity fee.” Collaboration with sportsbooks has worked well, he said, but there’s room to improve in terms of proactive preventive measures.

Rebuck added that sports wagering is “predominantly empowered by technology” and the monitoring of it “is still in a nascent state.” Enforcement is siloed state by state, he lamented. “You’re only as strong as your weakest link. It’s a technology industry,” the veteran regulator continued. “We’re wide open moving forward to doing things better than we have before,” especially in the U.S.

“Obviously, it’s a huge blind spot for us,” said Villalobos of offshore unregulated sportsbooks. “People who are betting on offshore sites, that information isn’t available.” He called unregulated books “the elephant in the room.”

Rebuck agreed. “You can write letters to the federal government all you want. You shut down one book, another one pops up.”

Dramatic odds shifts in offshore books’ lines can prompt movement in legitimate books, added Jedrzejewski. That’s why it’s important that the black-market side is being monitored, especially to deter match-fixing.

The panel raised the issue of improper influence on oddsmaking by the media, especially with new players in the space, such as ESPN and FanDuel TV.

“That’s a senior thesis,” responded Adams. “We see stories weekly about the conflicts of interest between these two factions.”

Injury reports and trade rumors, “that’s reporting the news,” Adams said. But “we have a very different landscape now,” thanks to online sports betting. Private-sector monitoring is effective, he contended, “because it can stretch across state lines.”

“Don’t forget about social media,” interjected Rebuck. Although it went unmentioned by the panelists, Chicago Bears quarterback Justin Fields set off a flurry of trade rumors this week, simply by altering his Instagram feed, rumors that Fields denied.

Listing advertisers, marketers, promotions, and content providers as sources of concern, Rebuck said, “These are all areas that can be abused. The general public will lose confidence in the value of sports betting as an entertainment opportunity.” If the industry isn’t careful, he concluded, “the profit motive of some people will be engaged in a way that’s embarrassing to the company.”

“No one’s happy saying reporting wrong news is against the law or frowned on,” offered Adams. “Does the public actually drive the [betting] lines? Who knows? All we’re saying is, ‘Just trust me’ isn’t a business model.”

Returning to the subject of proactivity prompted Villalobos to remark dryly, “I hope [U.S. Integrity] has a very uneventful and boring 2024 season.” MLB’s first spring-training games started yesterday. “When we talk about innovation, a lot of people’s minds go to technology,” he continued, saying that disseminating information about what is and isn’t prohibited isn’t technology-reliant.

“In-person [briefing] is great,” Villalobos said, “but we don’t assume that that’s enough.” Thus, frequent follow-ups are made throughout the MLB season. “Education will always be first and foremost in our line of defense.”

Jedrzejewski seconded the comments, saying that education was the most important prophylactic against abuse. He added that high-level athletes are twice as likely to have gambling problems.

Interjected Villalobos, “We don’t hide from [the fact that] our players do gamble and are allowed to gamble on other sports.”

“Problems will happen,” Jedrzejewski conceded, “but it’s about having the right controls in place.” MLB, he said, “is a great example of a league that takes integrity and its players’ safety very seriously.” As for enforcement, Jedrzejewski said tech-centric interventions “depend on how much buy-in there is to the existing solutions.”

Rebuck explained that extant policing has “significantly expanded with online wagering,” including the concept of a privileged license. “We know more about you and your family and your affairs than you yourself do.”

For that matter, Rebuck said, being an individual bettor is now a privileged status. “You can’t be anonymous. We know where your money is coming from. We know you have money … and we save it forever.” Social media, Internet use, broadcast media, “it’s all public,” Rebuck remarked.