NCAA president and former Massachusetts governor Charlie Baker worries that prop betting is hurting college sports. In fact, he’s so concerned that on Wednesday he called on state officials to ban them. It’s a tough sell for the booming $11 billion legal sports gambling industry, which grew nearly 50% last year — and even if Baker convinces states to put the genie back in the bottle, research suggests bettors may just turn to the black market instead.
Proposition or “prop” bets allow gamblers to bet on specific events or individual players within a game, instead of more conventional bets such as who will win or the total number of points scored. Regulators worry that prop bets are easier targets for punters or gamblers looking to fix results. Indeed, the NBA announced this week that it is investigating Toronto Raptors guard Jontay Porter amid speculation that he profited illegally from betting on his own performance.
“Problems with sports betting are growing across the country, with betting continuing to threaten the integrity of competition,” Baker said in a statement released on Wednesday. “The NCAA is drawing the line on sports betting to protect student-athletes and protect the integrity of the game — issues around the country in the last few days show there’s more work to be done.”
How online sports betting has evolved
Because sports gambling is regulated at the state level, Baker said the NCAA will petition individual states to ban betting on college sports, a policy that regulators in Vermont, Ohio and Maryland already adopted earlier this year.
The Supreme Court struck down a federal ban on sports betting in 2018. Since then, 38 states and the District of Columbia have legalized some form of sports gambling. Prop betting makes up a small percentage of the total gambling volume. Although federal figures are not available, the Ohio Casino Control Commission reported last month that prop bets make up about 2 percent of all sports betting done in the state.
But the prop bets have attracted a great deal of attention, both good and bad. Super Bowl prop bets, such as whether Taylor Swift will make it from Tokyo in time to watch her friend Travis Kelce play and what Usher’s first words will be during his halftime show, fueled the focus on prop bets last year month. On the other hand, critics say prop bets can expose players to potential harassment, which Maryland cited when it banned such bets earlier this month.
Other high-profile sports gambling scandals have raised concerns about the booming industry in the past few weeks. Last week, Los Angeles Dodgers superstar Shohei Ohtani accused his interpreter of stealing millions of dollars from him to cover his sports gambling debts. NBA head coach JB Bickerstaff recently revealed that he has previously received threats from gamblers. All the while, the industry continues to grow: The American Gaming Association reported revenue of nearly $11 billion last year, a 45% increase from 2022.
What happens if prop bets are banned?
Widespread college betting bans likely won’t be a huge financial setback for what has proven to be a hugely popular sports gambling industry because prop bans make up such a small share of the market. But the ban could have unintended consequences, such as incentivizing gamblers to place the same bets through illegal sportsbooks rather than through registered ones.
Illegal bets placed through avenues such as unlicensed bookmakers, unregistered websites or sports betting operations licensed in a state or country other than the user’s residence are far more popular than legal sports betting, according to data from intelligence platform Yield Sec. An analysis of betting data by YieldSec predicts that of the estimated $6.7 billion that will be wagered on this year’s March Madness tournament, 63% will be wagered illegally.
Illegal betting has been a thorn in the side of regulators since sports betting was legalized nationwide in 2018. As interest in sports betting has grown, growth in illegal betting has outpaced legal betting, according to Valli.
“You have legalized and regulated [sports betting]. Now you’ve legitimized it and created an upsurge of activity in illegal gambling,” said YieldSec CEO Ismail Vali Wealth.
Banning prop betting along the lines of what Baker is calling for could run the risk of accelerating this trend and pushing prop bettors to illegal platforms that can still offer prop betting.
Even if the NCAA succeeds in persuading states to revoke approvals for college sports betting, that likely won’t be the end of the process, said Michael McCann, a University of New Hampshire professor and sports law expert.
“States can change what is permissible in terms of sports betting, but future changes may face opposition in the legislative process,” McCann wrote in an email to Wealth.
