A Case for Legalized Sports Betting

Any all-round sports fan or junkie knows that this week has not been a good one for administrators. Starting with the farce that the Tour De France has become because of suspicion of widespread and systematic doping by race leaders, a top sports professional engaged in an underground dog fighting activity and to the news that an umpire with the National Basketball Association is under investigation for betting on games in the league, sports has provided entertainment of a very different kind.

Understandably therefore, Justin Wolfers a forensic economist says something about the NBa referee. In this article in the New York Times, he states that the existing structures that outrightly ban betting on sports in the the entire US except for the State of Nevada is partly responsible. It is noteworthy that Justin Wolfers, has earlier co-authored a paper that found discernible referee bias in calling fouls within the NBA. this did not please NBA commissioner David Stern but I think this revelation that one referee may be betting on games suggests that there's a bigger problem than Stern can explain away by merely stating that it is quite rare.

Prof. Wolfers does not belabor the point but proceeds to suggest a regulatory approach aimed at vastly improving the situation. In short, he states that the outright ban on gambling is ill-advised and should be reversed to encourage bets that do not provide an incentive for corruption. This favors legalizing bets on the outcomes of matches and driving illegal gamblers towards the legitimate market. He appears to think that retaining a ban on the points differential of games should be retained as this provides part of the motives for umpires and players to act strategically by betting on subtle outcomes that they could influence. Bringing sports betting to the open would be far better than any alternative but betting on the points differentials is far more sophisticated but i see no reason for retaining ban here.