Brian Moritz is absolutely right. The associate professor at St. Bonaventure University who serves as the director of online Masters of the Arts programs in Sports Journalism and Digital Journalism recently made a prediction that 2024 would see “a major sports betting journalism scandal” for Nieman Lab. That might not be what he is right about, though, at least not in the way most people think.
The truth is that a sports media professional using their position to commit significant insider trading is difficult and unlikely within the regulated system in the United States. It’s the other points Moritz speaks to where he is spot on. Those concerns are actually more serious than a reporter trying to profit off some info.
Moritz breaks down his prediction
If you haven’t read Moritz’s piece for Nieman Lab, there are few legitimate reasons to delay. His argument in many ways is very solid and one of the scenarios he presents is a legitimate concern when it comes to the connection between gambling and sports media.
Perhaps the biggest criticism of his premise is that sports betting, even online sports betting, is really nothing new in the United States. Nevada’s physical sportsbooks have been around for decades. Offshore websites have been operating in the US for decades as well. The opportunity for members of the media to place illicit wagers has been there for decades.
Additionally, one of the scenarios that Moritz lists is quite unlikely, at least within the confines of regulated sports betting in the US. From Moritz’s writing, that is “a sports-media version of insider trading, where journalists place bets based on inside information before reporting it.”
Moritz goes on to acknowledge that situation is far more unlikely than the other scenario he lists. He is absolutely correct in that assessment for many reasons. The bottom line for this set of circumstances is that this is exactly what regulation not only deters but looks out for and punishes.
Integrity monitoring provides safeguards
The biggest reason this is unlikely to happen is the existence of integrity monitoring in the system. Naturally, a member of the media could go outside the regulated system and use an offshore website or a bookie. If such an individual does use a licensed sportsbook, though, there are bells and whistles that will go off.
That monitoring is how former Alabama baseball coach Brad Bohannon got caught sharing insider information. When you try to place a six-figure bet on a college baseball game, it sticks out like a sore thumb. Because of the speed of digital communication, stakeholders knew within minutes.
Moritz could reply that Bohannon’s co-conspirator used a physical sportsbook and that’s true. However, using a legal online sportsbook might be more precarious for a member of the media trying to pull this off. To place a bet on such an app, you have to open an account.
To open an account, you have to provide identifying information. Know Your Customer protocols on such apps include ensuring that a person’s legal name matches the information on their government-issued photo ID and a live facial scan. There’s no way to anonymously use a regulated sports betting app in the US.
Running through a hypothetical like MLB player Shohei Ohtani’s free-agent signing (if a regulated book were to actually take action on that) reveals the safeguards in place.
Illicit betting would get shut down within minutes
Suppose a member of the media had tried to place a significant bet on Ohtani signing with the Dodgers using non-public information they obtained through the course of their work. Suppose that person tried to use a regulated online sportsbook.
Someone putting down six figures on a market that’s been drawing four-figure bets to that point, again, is going to stick out. The integrity monitoring provider, U.S. Integrity in this case, would send out an alert. All the sportsbook’s operations team will have to do then is freeze the market and review the ticket.
Operations team members will see exactly who placed the bet, when they placed it, what device they used and even where their device was at that moment. It won’t take them long to connect the dots and contact law enforcement. At that point, U.S. Integrity has probably already alerted MLB.
To pull off making an actually significant profit, a lot of people would have to be in on the scam. The number of people needing to be cut in would take away from the action for everyone plus increase the risk that someone would either mess up or talk.
The other scenario Moritz lists, “a reporter who works for an outlet that’s partnered with a sportsbook, reporting information that directly influences a betting line,” is comparatively far more likely. Contrary to what Moritz says, though, you can’t bet on everything within a regulated system. For example, there is no US jurisdiction governing sports betting that allows licensees to take bets on penalties, injuries, replay results and many other items.
Moritz’s second scenario gets to the main point of what he is absolutely right about.
Sports media needs to get ahead of ethical issues with gambling
While Moritz’s first scenario focuses on ethics from the sportsbook side, the second is more about ethics on the side of the media professionals and the companies that employ them. Moritz presents the scenario of reporting on a player’s injury and the impact of that on sports betting.
For example, could Penn Interactive put pressure on its partner ESPN not to report a player’s injury because it has a big liability on a competition that player is expected to take part in? In theory, that’s possible. Internal communications between gambling companies and their partners are not part of what integrity monitors govern.
However, such partnerships are part of what state regulators govern. Penn would be risking its gambling license and therefore business in the US if such a scandal were to be exposed. It’s hard to imagine a situation in which such a scandal would not at least result in the suspension of Penn’s licenses all over the country.
Comparing a potential loss on one bet to a complete shutdown of the business probably reveals that taking such action would not be worth the risk. That doesn’t address the other dynamic in play in this situation; the media outlet that would be involved.
Even if a gambling company were to pressure members of the media to behave in such a way, the media outlet and reporters still have a choice to make. As Moritz points out, the sponsorship dollars from gambling companies could make that a difficult choice.
It’s also a choice the sports media industry lacks clear guidance on. Moritz states the Society of Professional Journalists and Associated Press Sports Editors group lack specific guidelines on how to approach the subject of maintaining journalistic integrity when it comes to matters that might influence sports betting.
That is where Moritz’s warning is most serious. If sports media organizations just continue to assume their staff members know how to behave in these situations or don’t prepare for potential ethical issues along these lines, the scandal that Moritz predicts seems inevitable. It might not happen in 2024, but eventually, a lack of action on the media outlets’ part will show that Moritz is absolutely right.