The Inside Job: The Hidden Danger of the NBA Betting Scandal

1.
Ever since the O.J. Simpson murder trial the spectacle of scandal has permeated every corner of our 24-hour news, blogosphere, supermarket tabloid world as millions of Americans thirst for the latest infotainment about the personal problems of public figures. Even your honorable Cap'n finds it hard to avoid the distasteful stuff, since sensationalist pseudo-reporting has permeated the noosphere to the point of nigh-ubiquity. (Normally though, I limit myself to making sure that Lindsay Lohan is still possesed by the devil and that Robert Downey Jr. hasn't resorted to taking hostages and staging a standoff with police in a sleazy hotel in Bed-Stuy.) All of this constant scandal has made damage control into a cottage industry, a cottage industry that has seen a healthy amount of business coming from the world of professional sports of late. What with suspected steroid users breaking cherished records, star quarterbacks drawing the wrath of P.E.T.A., and celebrity soccer imports failing to meet expectations by y'know playing soccer it seems like lots of people are paying lots of money to publicists, spin-doctors, and worst of all lawyers, to keep all the nasty secrets tightly under wraps. Yes, if you are a cunning, ambitious and deceitful enough person you can turn a healthy profit by ingratiating yourself with the right people at the worst moments of their lives, and charging them handsomely for the kind of advice good friends would give them free of charge. Since I only meet two of the three criteria listed above, I will offer up some advice gratis to the professional sport possibly facing the worst crisis right now, my beloved National Basketball Association.

2.
If anyone hasn't heard, I'll try to simply summarize the truly disturbing scandal that currently threatens to do permanent harm to the NBA. It was recently reported that the FBI had been investigating veteran NBA referee Tim Donaghy of both gambling on games he was officiating and using his position as a referee to manipulate the games. The NBA then made an announcement that they are doing everything they can to assist federal investigators and assured the public that this was an isolated event. More information came out indicating that Donaghy had a gambling problem, leading to substatial debt with bookies connected to organized crime. Reports indicated that Donaghy may have been manipulating games for the mob for almost two whole seasons. People began to make lists of controversial games that Donaghy had reffed over his career including the Pistons-Pacers game that devolved into a brawl between players and fans at the Palace of Auburn Hills, a game where the New York Knicks where given 39 free throw attempts to the Miami Heat's 8, and perhaps most damagingly Game 3 of the Suns-Spurs Playoff series this spring that many felt had been decided largely because of the officials. It was all topped off by a press conference from NBA commissioner David Stern calling the situation the worst he had ever experienced. Commissioner Stern, you don't realize the half of it.

While no one from the FBI or NBA has actually accused Donaghy of altering games to the degree that he determined who won and who lost, there is a growing body of evidence to suggest that he used his whistle to affect the outcome in other more subtle ways. If you aren't very familiar with gambling you may not know that betting on sporting events generally involves more than just determining who will win. Most gamblers wager on individual games by betting on whether or not a favored team will win by a certain amount of points, called the spread. Thus in a basketball game where the Chicago Bulls are favored to beat the Los Angeles Lakers by 5 points and the final score is Chicago 107, L.A. 103, you could have won money betting on the Lakers. Even though L.A. lost they "beat the spread" and kept Chicago from winning by the predicted number of points. These situations are much easier to meddle with for an official than trying to outright rig the game so one team wins and the other loses. If Donaghy was officiating a game where the spread was 12 points he could easily call a few extra fouls late in the game to keep the underdog within 10 points of the favored team. This way the game isn't altered in a blatant way, the outcome looks to most eyes exactly as they would have excepted, except Donaghy's mob connection in the know can make off with a ton of money.

Actually Donaghy and his associates were probably even more subtle than that. Most of the reputable journalism I've read on the topic seems pretty certain that Donaghy's usual target was the over/under. Like betting on the number of points by which a team will win a game, casinos and bookies will give their patrons a number estimating how may points total will be scored by both teams in the game giving people the chance to bet whether the actual total will be over or under the one the bookmaker has put out. Here a basketball referee can cause some real damage. Not only can he easily push the game in favor of the over by giving free throws (and thus likely points) away like candy during the game, but he can also establish the increase in scoring early on when people won't be watching, as the would be for more obvious rigging or point-shaving during the fourth quarter. Plus his whistle blows don't even have to favor one team or the other so the final outcome of the game is even closer to what everyone was expecting.

Gambling analysts have already scoured Las Vegas records and found a trend for Donaghy's games going over the designated number at a rate that's 99.9% likely to be because of manipulation. Statistical studies, like those done by Dean Oliver, have shown that refs can have a tremendous influence on the outcome of a game with only the slightest leaning for or against a given team. Additionally, there was a string of ten games this year where Vegas casinos saw a lot of money bet on Donaghy's games to go over and the big money won every time. Streaks like that are nearly impossible in modern Las Vegas without the bettors having inside information on the game. There may have been even more games Donaghy influenced for profit, but we would never tell since so much gambling in America happens illegally either through back alley bookies, online or through oversees casinos. After complaints about officiating in the NBA Finals of 2006, many media members began pointing to all of the games, involving far more officials than just Donaghy had some hint of suspect behavior about them. All of this evidence has been put together by many to reach the conclusion that Donaghy was definitely in it deep and that possibly there might have been other referees involved as well.

3.
On those suspicions many media pundits have begun advising Commissioner Stern to make major overhauls to the system by which NBA referees are hired and monitored. They seem to think that the problem is at worst one of officiating. They don't truly understand how deep the problem goes. The fact of the matter is David Stern is going to have to look much higher up the later to find who's truly to blame for the crisis he now faces and he's going to have to take much more drastic action to resolve it. The NBA Commissioner has to realize he has caused this problem and for the good of the Association he will have to resign and let someone else take over if he truly wishes to see the situation resolved.

I don't mean to imply that Stern permitted Donaghy's illegal activities in any way or that he runs a corrupt commissioner's office. I am simply stating the plain fact that an accumulation of Stern's actions over the years to try and control and market the NBA lead directly to the Donaghy situation. It starts almost with the beginning of Stern's tenure, when he took an aggressive position against any association between gambling and the NBA. This may be counterintuitive, but I believe the connection is clear. Stern has penalized NBA coaches and players for mentioning the point spread on games when talking to the media. He's fined players who make casual bets on things like free throws. He has insisted that states and Canadian province with teams should not permit casinos to allow gambling on the NBA (possibly the main reason why the NBA will never put a team in Las Vegas though many think it would work well). All of this has made it harder for the average fan to gamble on the NBA legitimately. This meant an increase on illegal bookies, like the kind who preyed on Donaghy. It also caused a shift in betting from legitimate casinos (where law enforcement officials and bookmakers alike keep a careful eye out for illegal activity) to online gambling sites and other illegal forums which probably made the money trail feeding off Donaghy's crooked calls harder to detect.

The other major cause goes back to at least 1997 when it became public knowledge that an NBA ref was traded in his first class airline tickets the Association buys for coach tickets and cash in order to supplement his income. This drew attention to two crucial facts. First that NBA refs were badly underpaid. This is truly stunning information when you consider their work is extremely difficult and stressful, often not very rewarding, but absolutely vital to the continued existence of professional basketball. Second that even though NBA refs are likely some of the brightest people who have their ethics and backgrounds carefully scrutinized before landing the gig, they like any other human, will break the rules if they incentives are right. I took two classes in economics and I figured that out. The fact that it seems to have escaped the commissioner and his underlings is stupefying.

After giving Donaghy the oppurtunity and motivation to commit fraud on the consumers of pro-basketball, Stern then went ahead and handed him the means. Stern has been criticized with increasing frequency for being a control freak. His desire to shape the NBA and brand it as something respectable for Middle America, led him to give officials expanded powers. Referees were given increased leverage to call technicals in an attempt to adjust the behavior of players and coaches. This meant a ref looking to put more points on the scoreboard had the chance to hand out free throws like candy with the Association's blessing. Even if someone noticed, as analysts have been able to after the fact, that Donaghy handed out technical fouls at the highest rate of any NBA official over the two years under investigation, it wouldn't necissarily strike them as odd. After all the NBA was encouraging quick whistles, and someone has to had out the most. It may not be the same as putting a gun in the hands of a sociopath, but maybe its like letting the sociopath know where he can find gun shows, what their hours are, and then giving him a rousing speech about his second amendment rights.

The final straw though was revealed just this spring when it became clear that David Stern had not been altogether open about how the NBA monitors and handles officials. After mounting complaints about the quality of officiating the commissioner had long ago established a standard response that all refs were carefully watched, all games were thoroughly reviewed and that the NBA was happy with the level of consistency they were achieving. All right some of that was PR boilerplate but it sounded like their was some kind of apparatus in place that we could understand. After games some association official back in East Rutherford, New Jersey goes over the video and makes sure that the referees in that game are generally calling fouls like all the other referees generally call fouls. Basically he was saying that the NBA stood behind their referees. This is a great sentiment, until you realize he was probably motivated by the desire to brand the NBA as an orderly and respectable league where the proper authorities are in control.

Earlier this year though, a group of academics released a paper claiming that the race of NBA players affects how many fouls will be called on them. Stern immediately rebukes the findings by stating that the NBA keeps careful track of the calls made by individuals and looks out for any sign of bias. This floored me when I realized the implications. First of all how could the NBA hide the existence of such and important body of data from the public for so long. Sure they could claim it's proprietary information, but wouldn't this be the ideal time to make at least a little of it available to the public. Later on it struck me that if they were actually doing as thorough a job as they claimed they should have caught on to Donaghy without needing a federal criminal investigation to point it out to them. But you can't get to mad at them. As I said earlier manipulating things like the point spread and the over/under can be done through simple and subtle acts. However that only goes to reinforce how important it is to keep sports gambling a legitimate above the table affair. If the general public, or research inclined academics, or legal bookmakers could see these data the NBA claims to have, they would apply more eyes and quite possibly more rigorous tests to it to catch trends like the one Donaghy left. Commissioner Stern adamantly defended his refs against any accuations of wrong doing but then refused to offer the evidence, possibly for reasons of pride, when sharing that information would have greatly benefited the NBA in the long run. By refusing to be as open with the public about the performance of referees as he could have been Stern essentially covered up Donaghy's tracks for him.

4.
So there you have my case against NBA Commissioner David Stern. I am clearly deeply upset that the integrity of one of my favorite sports has been called into question. However I believe that objective study and the plain and simple facts show that the commissioner pushed circumstance in the NBA to a point where some officials somewhere was bound to abuse his power somehow. I feel that Stern's policies made him an accessory to Donaghy's wrong doing. So I lay this scandal at his feet. I know most damage control is about saving face and trying to hold on to what you have, but I feel this is a time when Stern should think of the greater good. I hope he realizes that his work as the NBA commissioner has earned him a spot in sports history already, and that if he resigns soon and allows a new commissioner to clean up this mess it will ultimately reflect well on him. He can fight it if he wants but eventually some one with a bigger audience and more influence than me will put together this same evidence and it won't just be the NBA with a reputation on the line. If Stern steps aside for the good of professional basketball then he will leave a legacy of sacrifice, wisdom, and leadership instead of corruption, incompetence and scandal.