One day during a recent college football bowl season, Las Vegas-based analysts tasked with monitoring for suspicious activity in sports betting noticed a sudden, dramatic change in the line for one of the next day's games. Money was piling into the game as the odds for a team that had been a significant favorite dropped rapidly.
Matthew Holt, president of U.S. Integrity, said that they saw tens of millions of dollars come in overnight.
Several players on the favored team would not play because of the COVID-19 protocols. The equipment manager leaked the news to the bettors the day before, and their subsequent wagers moved the line.
Holt didn't name the school. confidentiality agreements between parties involved and U.S. Integrity kept the circumstances of the case from being made public. Holt said the equipment manager was fired.
The system worked in that case. It is anyone's guess as to how many cases go undetected or how many get reported but don't result in any action.
Four years after dozens of states legalized sports betting, no single entity is responsible for making sure the game is fair. The detection of match-fixing, inside-information leaks, athlete exploitation and officials on the take would be subject to federal standards if legislation were to be passed.
Private companies and nonprofits are trying to fill the gap on an ad hoc basis. They must navigate a patchwork of inconsistent laws without federal standards. Without enforcement authority, they have to rely on their clients or law enforcement to hunt down and punish cheaters. When integrity monitors find evidence of manipulation, where that information goes and whether it is used to crack down on bad actors, it is difficult for the public to know how often cases are suspected, investigated or prosecuted.
According to an Oklahoma State University assistant professor who has published research on match-fixing and other game manipulation and sports gaming regulation, integrity monitors catch some low-level match-fixing. A system that relies on private enterprise and not law enforcement to analyze gambling data has no chance against the sophisticated type of cheating that happens outside the United States.
There are some aspects of sports betting that would benefit from being handled at the federal level.
He said that he didn't think there was an epidemic of match-fixing, but that it was laughable that 4,000 college basketball games were played. I don't think that is realistic.
According to a certain set of rules, legalized betting comes with an expectation that games will unfold.
He said that when it doesn't, there is a disadvantage because they're missing a key piece of information that someone else benefited from.
U.S. Integrity is a for-profit company that does not engage in other gambling-related activities. Sportradar and Genius Sports both sell data feeds to customers. The International Betting Integrity Association is a nonprofit run by dues-paying sportsbook members who share reports of suspicious activity. Two of its biggest U.S. partners are DraftKings and FanDuel.
Holt said analysts for U.S. Integrity look at raw betting data, athlete performance data, and other sources of information to assess what's moving betting lines.
They will look for correlations between unusual wagering and possible anomalies in actions by athletes, officials or others, and whether news about injuries or player status was made public before or after bets started changing.
Holt said that when analysts detect suspicious activity, the company alert the clients involved, and then decide if the information needs to be passed on to state regulators or law enforcement. He said that the U.S. Integrity sends out about 15 alerts of suspicious activity per month.
The people with access to the players tend to get the injury information first. The equipment managers and trainers are the ones who get called and say, "Hey, don't bother getting up at 5 a.m." Holt said that he wasn't going to play tonight or that it was an equipment manager who was told not to get an athlete's gear ready.
Analysts can find correlations and outliers in their data sources. They can get information from their sportsbook clients about who places bets, where and how they place bets, and if it warrants, analysts will let the team, league or association know.
Not every U.S. Integrity report leads to discovering the source of suspicious line movement. The company has no authority to take legal action or pursue any type of punishment, and sometimes it doesn't know what will happen after it sends an alert to clients and regulators, who can access phone records, emails and compel people to talk.
The U.S. Integrity chief operating officer said that sometimes clients prefer to end the case by firing an employee.
He worried about reports traveling on a one-way street when it came to contracts with leagues.
The director of integrity at the International Betting Integrity Association said that sportsbooks are motivated to report suspicious activity if they have invested a lot in getting their lines right.
Holt argued that relying on sportsbooks to raise the alarm over suspicious activity can only lead to certain cases coming forward, especially when they involve major leagues that are their corporate partners. Some ninth-tier tennis or sub sport in some far-off country in some far-off land doesn't offend their corporate partners. In the United States, the International Betting Integrity Association issued 39 suspicious activity alerts, but none involving collegiate or professional sports, according to its own data.
The West Coast Conference is a client of U.S. Integrity. Gloria Nevarez said that she relies on the company to spot anomalies that could point to influencing outcomes of games, but also to monitor the conference's jurisdiction over officials.
She said that if you look into the background of the official, you look for any kind of connection with a common bettor. Sometimes there might be something more there.
An official who had worked conference games for several years started to make strange calls that affected the point spread of games. There was a history of fraud between the official and the bettor. When asked what action the conference took, she wasn't at liberty to say. The WCC is not a public agency and is not subject to open records disclosure.
The industry and states opposed federal legislation that would have imposed integrity monitoring standards after the Professional and Amateur Sports Protection Act was overturned.
The bill would have added extortion and blackmail to federal match-fixing prohibitions and established punishments for betting with wrongly obtained nonpublic information. Records of sports betting data and suspicious transactions would have been maintained by a national sports wagering clearinghouse that was included in the bill. The bill was introduced in the Senate but never made it past the judiciary committee.
Many states had already rolled out their own regulatory frameworks and threatening to cut into projected state tax revenues was not going to be a politically expedient move. The federal government was trying to get into the weeds of an emerging industry and there was no real catalyst other than lobbying.
A spokesman for Schumer said the senator doesn't currently have plans to introduce legislation for sports gambling oversight.
Holt said that the business of integrity monitoring is more difficult because of the different laws banning illegal activity in different states. State gaming associations, state and local police, colleges, casinos and sportsbook all have a hand in punishing bad actors.
Holt said that he would like to see the United States adopt some of the techniques used in other countries.
In the case of the equipment manager who ended up getting fired, Holt said the law in that state wasn't clear about whether such activity was illegal, and there wasn't enough to build a criminal case.
Most states don't have penalties for people who use their inside information to make bets or sell it to someone else making wagers. According to data compiled by LegalSportsReport, a site that tracks sports betting trends and legislation, 23 states and Washington, D.C., have laws that prohibit athletes from betting. The data show that eight states and Washington, D.C. ban the use of nonpublic information.
We don't have universal rules or laws that say it is illegal to use inside information for the purpose of profiting off sports betting. Holt said that we have that in the financial services world.
Tennessee enacted laws to help prevent manipulation. Several states limit or ban betting on certain teams or leagues to prevent people from trying to bribe or exploit athletes, officials or staff.
Holt says that Tennessee requires sportsbooks to be members of an integrity monitoring association. The Tennessee Sports Wagering Advisory Council, an agency with regulatory authority but not law enforcement power, must be given information about suspicious activity within 24 hours. Tennessee has a law that makes it a crime to share nonpublic information for the purpose of betting on a sporting event.
Mary Beth Thomas used to work in the secretary of state's office, where she had experience regulating daily fantasy sports. She met with local district attorneys and law enforcement to raise their awareness of sports betting.
Just as a starting point to say that we are regulating this industry. If there is an issue that is under the criminal purview of law enforcement, we would like to be able to send it to you.
Chris Cylke is a senior vice president of government relations with the American Gaming Association, the trade group for the casino and sports betting industry.
We would always be open to discussing amending the laws or regulations to make it easier to prosecute anyone who has done something wrong or perceived to be wrong. He said to clarify what is right and wrong.
When the state of Arizona approved sports betting last year, Harold Wafer started his job as an event wagering and fantasy sports administrator with the Arizona Department of Gaming. He was a mentor to Bob and Muggsy. He worked the phone rooms and learned how to book faces and know the customers' betting habits.
He relies on integrity monitors and sportsbooks who are legally required to pass on reports of suspicious activity. In an interview from the Footprint Center in Phoenix, where the Suns and Mercury are located, he said his own staff doesn't have the resources to do that work. He said he would have to consult the gaming agreement legislation that was thick as he raised his hand.
The industry in Arizona has already outgrown Wafer's staff of two agents, an analyst and an auditor. He wants to add an analyst and a few more agents to meet the demand. He said he will need even more because of the plans by the Arizona Cards to get a stadium sportsbook and the DraftKings to put a location on a golf course.
The FBI started its Integrity in Sports and Gaming Program task force in response to the anticipated growth in legalized gambling. The FBI has a long history of gaming enforcement, using statutes under bribery, corruption, fraud and interstate communications to catch match-fixing. The law enforcement agency that investigated Tim Donaghy was the one that investigated the match-fixing scandal.
According to two members of the FBI task force, the task force doesn't do its own analysis to catch cheaters and relies on tips from private integrity monitoring firms. When asked to list cases that resulted in action by the U.S. Attorney's Office, a spokeswoman pointed out two cases: one that involved a man threatening athletes, but with no apparent attempt to influence betting or manipulate the outcome.
FBI special agent Omahen said that industry research suggests that gambling has grown tremendously due to the fact that it is both legal and illegal. There were many reports of brick and mortar casinos closing during that time.
At least three cases have been relayed to the FBI by U.S. Integrity over the past few years, according to Sadin. He said there have been many other cases involving local law enforcement.
There was enough evidence to take things further in the case of the person who was fired from a job because of their betting activity. The property that we worked with decided not to pursue any further legal action because law enforcement did not think there was a smoking gun.
The Professional and Amateur Sports Protection Act was overturned in May of last year, and to get a sense of the number of cases they have faced involving suspicious betting behavior, ESPN contacted regulators in all states that started offering sports wagering after May of last year. There were no enforcement actions or criminal charges made in response to an integrity concern raised with a U.S. sporting event pertaining to game manipulation or improper use of inside information.
That doesn't mean there weren't penalties or punishments imposed by a university, conference, sports association or professional league, as happened in March when the NFL suspended Falcons wide receiver Calvin Ridley for at least the 2022 season after he was caught betting on professional football games.
Some state and tribal regulators did not respond to requests for a number of reports or enforcement actions, and a couple noted cases that were under investigation, but would not offer specifics. In Indiana, a representative said the state's statutes require it to keep reports from its private integrity monitor confidential and suggested reaching out to the monitoring company for more information. Holt and U.S. Integrity can't share information with states that have confidentiality agreements with the company.
In New Jersey, which was one of the first states to offer sports gambling in the summer of 2018, a spokesman wouldn't give any reports. Inquiries were directed to the International Betting Integrity Association. When information results in public-facing action, it is disseminated by the agency, and, for example, provided a link to a July 2020 ESPN story about potential match-fixing in Ukrainian table tennis -- a concern brought to regulators. The New Jersey Division of Gaming Enforcement spokesman replied in an email that they had a response.
Oklahoma State's Holden said he has no idea why the gaming commission are so secretive. They are public entities. We deter it because we tell people we are catching people doing this. If anything, it hinders that.
He feels that more transparency can help. He said that it was good from a deterrence standpoint.
David Purdum and John Mastroberardino contributed to the report.
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