A college football betting scandal this fall? 'We'll probably see two,' says expert
As football season nears, college sports stakeholders hold their collective breath.
Sports wagering concerns have escalated in light of separate recent investigations involving Alabama baseball – whose coach, Brad Bohannon, was swiftly fired in May for suspicious betting activity – and dozens of student-athletes at Iowa and Iowa State. And news that 17 investigations related to college sports betting are ongoing – which NCAA President Charlie Baker disclosed in a document obtained by the Associated Press – puts a finer point on the scope of the issue.
Nearly 40 states have legalized sports gambling. And more than $150 billion will be wagered on sports this year in North America. Tom McMillen, CEO of LEAD1 Association, has told On3 that sports wagering represented his No. 1 personal concern in all of college athletics because the ramifications could potentially be “catastrophic.”
And McMillen said that before the Alabama and Iowa probes attracted headlines.
On3 this week caught up with Matt Holt, CEO and founder of the Las Vegas-based monitoring firm U.S. Integrity, which initially alerted the SEC to the abnormal betting on Alabama baseball.
Holt discussed the chances of a sports betting scandal in college football this year (likely), the value of some 14 partnerships U.S. Integrity has with conferences (in addition to partnerships with 30 schools) and why he believes leagues are “way ahead” of the NCAA in proactive strategies.
More industry leaders now realize that on May 14, 2018 – when the U.S. Supreme Court struck down the federal ban on state authorization of sports betting – “sports and sports betting collided and will never be pulled apart again,” Holt said. “So, they [stakeholders] can either embrace it and educate around it, but they can no longer put their head in the sand.”
The interview has been lightly edited for clarity and context.
Q: What’s the benefit of the partnerships U.S. Integrity has with some 14 conferences – monitoring, education, resources – that those leagues wouldn’t otherwise have?
HOLT: “Let’s start at the most important spot – education. There’s just no one out there that does education like we do, because no one else does integrity like we do, or has access to the data and information that we do. As the premier licensed integrity provider, we work with 93 of the 96 regulated sports books in North America. So, we get data from them, information from them. The non-licensed integrity providers – and there are many out there – data companies who also offer integrity services, since they’re not licensed companies, they’re not getting the same level of access to data, and they’re not participating in alerts in North America.
“Thus, they don’t really have any transparency into what’s being investigated in North America. Number two is real-time information sharing. Let’s go to the SEC. I’m sure they love the fact that two hours before the Alabama-LSU baseball game on [that] Friday, they were getting a heads-up. Where the story broke on Monday afternoon, three days prior, they were well aware of it, well ahead of it, had all the facts and information. That’s really important. And that’s just one instance. We identify dozens of collegiate instances every year and are able to deal with the conferences and schools individually – way before it ever breaks on any media – so that they’re prepared, they understand, they can self-investigate and figure out what’s going on.”
Q: Had you not been a partner of the SEC and, therefore, not alerted them, how may that have unfolded otherwise?
HOLT: “Well, I think the investigation – because of the physical evidence in this case, unfortunately, was going to move forward regardless. And then without being able to investigate the school, they would have been caught off guard. But by knowing ahead of time, they’re able to start their own investigation, which is actually really important. Because a lot of times the surface investigation may divulge evidence of wrongdoing from one individual. But when you dive deeper in, you’re able to identify all the individuals involved in what’s going on.
“So, when we force these people to scramble and react late, I don’t think it’s ever a positive. So, A) they are able to get real facts, B) they are able to get in touch with and connected with the appropriate investigative agencies. So, the SEC and Alabama weren’t just working with U.S. Integrity. We were able to connect them with the Ohio Casino Control Commission. It was actually handling the criminal and regulatory violation investigation in real-time. So that they were getting direct-from-the-source information.”
Time is now for new, comprehensive NCAA national study on sports wagering
Q: Big 12 Commissioner Brett Yormark told me last week that they are doubling down on their partnership with you guys. What does doubling down entail? Are there tiers to the partnership?
HOLT: “So one of the things that we are doing a lot more expanded services on this year is actually on-site education. While the videos are nice, the mobile curriculum education is great, it’s hard to tell sometimes the level of engagement.
“When you get people on campus, the actual same organization that is identifying and investigating hundreds of these instances a year, I think it speaks volumes when you get in the room, and people can see you and see what’s going on. And we’re able to use real case studies relevant from the past season or two that they can relate to – instances happening. And we see it in the presentations, it’s phones down, eyes up – people really engage. So, I think there’s a lot of information acquired by student-athletes in those on-site educations that wouldn’t otherwise be available to them, especially, you know, the regs and the laws in all of their own states.
“Many of them – most of them – have no idea whether it’s actually against the law, a reg violation or simply league policy violation for them to wager on their own sport in their own state. They had no idea that in some states it’s a felony and they can go to jail. And so, making sure that they have relevant facts, information, using relevant recent case studies, I think is really important.
“And then introducing the Big 12 schools to ProhiBet (a joint venture between U.S. Integrity and Odds on Compliance) which is a prohibited bettor solution, using double encryption technology that allows universities and conferences to upload a list of players, coaches, trainers, referees, equipment managers, etc. – and that list is encrypted upon upload – so nobody ever sees it. Nobody ever sees anyone’s PII (personally identifiable information), yet when individuals on that prohibited bettor list attempt to place a wager on a sport they’re prohibited from betting, it blocks them on the sportsbook side.”
NCAA study: Sports betting prevalent among young adults amid rise in advertising
Q: For student-athletes, coaches, administrators, etc., are you satisfied with the level of education on sports wagering that exists right now in college sports?
HOLT: “I think it’s getting better. The college space always moves slower than the pro space in most things. And what we’re seeing now is that they’re taking it much more seriously. Their commitment to education is vastly improved over the last few years.
“They’re starting to finally realize what many of us realized several years ago, which was, on May 14, 2018, sports and sports betting collided and will never be pulled apart again. So, they can either embrace it and educate around it, but they can no longer put their head in the sand. And to their credit, all of these leagues have stepped up. I mean, the Big 12, the SEC and the Pac-12 have all been clients since 2018. So, it’s not like they just started taking this seriously. They’ve been taking it seriously. And I think recent events have helped sway them that further education is needed, further materials are needed.
“But we have to remember the first couple years, the actual educators, the actual administrators at these conferences and universities themselves, they had to get educated before they could educate others. So, I think they spent a couple of years really deep diving, learning this space, working with folks like us, and now they’re able to be better educators and pass information forward and understand what type of education services they need, what type of monitoring they need, what type of services will actually help keep their student-athletes out of trouble and prevent the next Iowa and Iowa State.
“That product is ProhiBet. The conferences have been great. And I think if you look at it from all of what’s being offered by the big Power Five conferences, what do their relationships and doubling down with U.S. Integrity get them, and then flip it around and look at what the NCAA is doing. The conferences are way ahead of the NCAA right now.”
Q: Way ahead of the NCAA? What is the NCAA not doing or needs to do better?
HOLT: “Well, No. 1, doesn’t necessarily have to be us, but there are a couple of licensed integrity monitors in the country. The NCAA has to work with licensed integrity monitors. Taking these old European data companies who say that they offer integrity services is getting them nowhere. And they should, they should kind of look and see what the rest of the industry is doing. Hey, every major professional sports league – UFC, NBA, PGA, NASCAR, NFL, NHL, MLB – they’re all using a licensed integrity provider, because you need a company that’s actually involved in the investigations, identifying the abnormalities, not somebody who’s going to teach you about best practices and policies from 20 years ago. You need real-time information sharing. And they’re not getting that if they don’t work with a licensed integrity provider in North America.
“No. 2, I think the educational efforts should be more about real case studies and how sports betting affects you, the student-athlete; how sports betting affects you, the collegiate coach; how sports betting affects you, the collegiate referee; rather than what they are doing with some of those companies like Epic Risk Management, where it’s sort of the scared straight approach, where someone comes in and tells you how they used to fix matches way back in the day and rugby. I don’t know if that gets anyone’s attention. And by the way, no one over here plays rugby. We don’t have college rugby. We certainly don’t have betting on college rugby over here. I don’t know that the student-athletes necessarily relate to it, but they can deal with real-time relevant case studies that involve athletes participating in similar sports in similar situations with similar lifestyle challenges as they have.”
Editor’s Note: When On3 asked the NCAA if it formally works with a monitoring firm, a spokesperson said:
“The NCAA continues to work with industry leaders, mental health experts, law enforcement and regulators, actively monitoring, researching and analyzing this landscape to devise effective ways to protect student-athlete well-being and minimize gambling harm. NCAA member conferences, schools, and the NCAA national office each play an integral role in supporting student-athletes during the expansion of legalized sports betting in the US, which includes the NCAA’s engagement of EPIC Risk Management to provide on-campus sports wagering risk management education to student-athletes across the country.”
Q: When you speak with conferences, what’s the biggest question or two that they have for you?
HOLT: “Right out of the gate it’s, How does sports betting affect us? And one of the biggest misnomers some of the schools or conferences might have is – and this is one of the more common questions we get – ‘Hey, sports betting isn’t legal in our state, thus, it doesn’t affect us, right?’ And there couldn’t be anything more wrong [with that]. All 128 D-1 football teams play at least one game in a state that has legalized sports betting. All 353 Division 1 men’s basketball programs play at least one game in a state that has legalized sports betting – every single program. Every single university, every single conference in the country is affected. And, oh, by the way, even if they don’t have it in your state, well, we tell them a lot of times within a two-hour drive in either direction there are three states that do have it.
“So, it’s not like because your state doesn’t [have legalized sports betting] yet and, of course, that argument is getting smaller and smaller as we just lock on state number 38 recently. So now with 38 states with legal sports betting – 39 if you include the District of Columbia – it’s very rare that anyone could say my state doesn’t have it anymore. And it really does affect everybody. There’s betting on your events in every state.
“There are certainly plenty of reasons why student-athletes, coaches, trainers could be persuaded into participating in nefarious activity. Considering the amount of money that’s being wagered, we’re talking over $150 billion will be legally wagered in 2023 in North America. At the end of the day, anytime there’s that much money changing hands, there’s always going to be people trying to get an upper hand.”
Q: Why aren’t more college conferences jumping on board? What’s holding them back?
HOLT: “Unfortunately, I believe it’s cost. And while we try to make it as affordable as possible, and to meet the budgets of some of these, you know, less cash-rich conferences … we work with the Big Sky, we work with the Big West, and we’re actually willing to work with anyone within their budgets to make sure that they can at least get some services and guardrails in place. But I feel like many of them believe that they just can’t afford anything.
“And you know, at the end of the day, what’s interesting when we look at their professional sports landscape is there’s all this sponsorship money and partnership money and advertising dollars from sports betting that are flowing up to all the professional leagues. Not surprisingly, they can then take a portion of that money and put it into all these important programs – integrity monitoring, prohibited bettor solutions, addiction treatment. But some of the smaller schools are saying, ‘Look, we’re not getting any money from sports betting. We get nothing. Zero. And yet our budgets are already razor-thin. We just don’t have the resources or the finances to afford anything right now.'”
Q: With college football right around the corner, what are the chances that we will see a sports betting scandal emerge on a college campus this fall?
HOLT: “I think we’ll probably see two. So, history tells us that about one out of every 900 events has some type of match-fixing, game manipulation associated with it. So, you know, at that rate, if we have 128 teams playing 13 games, we’re probably going to see one or two this season. History just tells us that. It really is a numbers game. Once you get outside of tennis or esports, it’s amazing how the rest of the sports tend to fall within the same one out of every 600 to one out of every 900 games range. It is very likely that we’ll have some issues in college football this year.”
Q: On any given autumn Saturday, there will be a handful of alerts related to college football games that you guys receive, correct?
HOLT: “Yes, absolutely. We have hundreds of alerts a month for abnormalities. And our analytics team runs them all down, investigates all of those hundreds of alerts. We get about 15 or 16 of them [that] turn into actual alerts that go out to the regulated sports books and gaming commissions every month. And about half of those turn into suspensions, bans and arrests related to nefarious sports betting activity. So, on average, eight times a month someone’s getting busted for some type of nefarious sports betting activity – either suspended, banned, arrested, whatever. That’s almost 100 a year.”
Q: As more states become legal, are you seeing an increase in the number of alerts related to college sports?
HOLT: “Well, we were seeing an increase for a while, because when you go from a handful of states to 20, naturally, you are going to see more alerts. But at this point, with so many states are legal already, I think we’re hitting that stabilization point when it comes to alerts.”
Q: Tough to offer a ballpark estimate on this, but for every case of nefarious activity that you flag and is caught, how many fall through the cracks and never get detected?
HOLT: “Oh, my goodness. A lot. What I always say is, look, we catch the really dumb people. We catch the less sophisticated people. When the Alabama investigation is fully done and all of those facts come over, people are going to go, ‘Wow, that guy was an idiot or whatever, and should have been caught,’ right?
“We’re catching all the ones that we’re supposed to, but at some point, we need to get the same level of data in the same timeliness as like the SEC in the financial services market. We need to get 100% of the bets in the country funneling through a system and identifying abnormalities in real-time. And we’re getting closer and closer every day. But we’re not 100% of the way there yet.
“So certainly, there is still more work to do. There’s still probably a lot more work we could do in terms of bettering the way we investigate, making sure that we’re learning more about sophisticated means people are using. Sports betting is so new we haven’t had a chance to learn about all these new schemes and how people are taking advantage of the markets over here yet. So, I think we’re getting there, but I also think we probably still catch less than half.”
In legalized sports wagering era, college sports is ‘blurring a lot of lines’
Q: If a conference does not have a partnership with U.S. Integrity, how difficult would it be for the league to flag and detect nefarious activity?
HOLT: “It’s like steering a ship in the dark without a lighthouse. You are completely out there in the dark all alone. And you’re just hoping you don’t crash into rocks.”
Q: Oh, that’s pleasant. In the states that are legal versus states that are not legal, are you seeing any increase in troubling behavior in the legal states? Or no notable difference?
HOLT: “Well, there is increased activity in the legalized states, but only because we have no access to information in the states where it isn’t legal. Bookies don’t share data with us. Illegal offshore sites don’t share data with us. So, when the activities are happening in those sites, the only real evidence we’re acquiring is from people who say, ‘Hey, I saw this guy doing this or look at this person’s doing this.’ Whereas in those other states, we’re using real-time data.”
Q: What are your thoughts on data deals that some conferences are securing? The Big 12 will announce one in the coming months. It’s a complex space. Leagues want to control how their data is disseminated. How do you assess it?
HOLT: “In theory, what they’re trying to do makes sense. They want to control where their data goes, who has access to it, what it’s being used for, and inevitably share in the profit. All of that makes a lot of sense.
“The problem is and let me give you a good example of why it doesn’t work… So, Genius Sports paid, you know, whatever, $120 million a year to the NFL for their data rights. And this is the NFL, the most popular league in North America. Of the 96 regulated sports books in North America, 10 use the official NFL data feed from Genius. And out of those 10, probably nine of them use it because they want to use the trademarks, the logos, they want to make sure they’re getting preferential advertising and placement, all of that. So, the purpose of the official data is supposed to be to fuel live in-play betting odds. So, if only 10 of 96 are getting those live feeds, how many of the other 86 do you think are offering full live in-play betting odds in the NFL?
“Eighty-six – all 86 – because they can get the same level of speed and accuracy from non-official data feeds as they can from the official ones. Yet they pay pennies on the dollar to get the non-official feeds. So, while the biggest sportsbooks in the country who make up the vast majority of the betting handle might be able to afford to pay the millions of dollars a year for the official one, most sports books are happy paying a few thousand for the unofficial one. And, by the way, they offer the same odds in the same betting markets and everything in play. So, the only thing you’re getting from paying the millions is maybe some preferential advertising placement and trademarks and logos.”
Sports wagering experts’ concerns become reality with Alabama betting probe
Q: Let me rewind the clock to that spring Friday with the Alabama-LSU baseball game. Can you please take me through that, how you got the alert and how it unfolded from there?
HOLT: “So we got an alert from the sports book [in Cincinnati], stating that they had witnessed some abnormal activity and had some, in this case, actually had already acquired some physical evidence of wrongdoing at the property.
“So, we then notified the [SEC] conference immediately and sent out an alert to the other 95 regulated sports books in North America to see if they also saw abnormal wagering activity on that particular game so that we can identify which jurisdictions were affected. Inevitably, there was another state where there was betting, similar betting activity from someone who was sort of part of this whole scheme as well.
“Then we put together a comprehensive report of all 96 responses that we get, put together a robust report from them, aggregated all the information we have, and sent that off to the investigative agencies, in this case, the Ohio Casino Control Commission and the Indiana Gaming Commission, so that they can start their information gathering, evidence gathering and investigation, notify the conference what’s going on and really then we let everyone take it from there.
“So, we’re not a law enforcement agency. We’re sort of the front-end alerting system, the front-end information-gathering firm for the entire ecosystem. But once we compile all that front-end information, it’s up to the appropriate investigative agency to sort of take the ball and run from there.”