NO one should be surprised by the news that federal officials are investigating whether Tim Donaghy, a referee for the National Basketball Association, bet on N.B.A. games and may have used his position to manipulate game scores so that he or his associates could profit from their wagers. David Stern, the commissioner of the N.B.A., characterized Donaghy as “an isolated case,” but this both misrepresents history and misses the point.
Stern may be correct that Donaghy is the only bad apple in the current crop of N.B.A. refs, but sports betting scandals are fairly common. They are the result of persistent economic incentives that can be traced to the structure of sports gambling markets. And these incentives can be changed.
The activity known as “point shaving” gets at the heart of the problem: a corrupt player or official is rarely asked to throw a game to one team or the other. Instead he is asked to influence something rather immaterial, like the winning margin. This is profitable because gamblers typically bet on whether a team will exceed some point differential ”” the “Vegas Spread” ”” rather than whether a certain team will win.
Because basketball can be affected significantly by the actions of a single player, coach or referee, it is extremely susceptible to gambling-related corruption. But we have seen similar scandals in other sports, including football, soccer and cricket. The common thread in each case has been the existence of large-scale betting on immaterial outcomes, like the point spread, or how many combined points the two teams will score, or the winner of a meaningless “dead rubber” in cricket, a game that takes place at the end of a best-of-five series after one team has already won three games. The exception is the Chicago “Black Sox” scandal, when White Sox players threw the 1919 World Series to the Cincinnati Reds.
Even so, sports betting is probably a fairer game than stocks and financial markets — e.g., Enron, Global Crossing, etc.