When It's Legal to Rig a Sports Game (and Why It Shouldn't Be)
Manipulating a sports match's outcome for gambling purposes is outlawed. But Manipulating one to boost suspense—and therefore ticket sales, ratings, and advertiser demand—isn't.
In the late 1950s, millions of television viewers were aghast to learn that they'd been subjected to an elaborate hoax. Popularly known as the Quiz Show Scandal, and dramatized in a 1994 Robert Redford movie, it was revealed that televised contests of intellect were not true competitions as they'd been pitched. Rather, according to a later finding by the U.S. House of Representatives, the shows were rigged, with some contestants being secretly provided answers and others being instructed to take a dive, resulted in a "complex pattern of calculated deception of the listening and viewing audience." In 1959, then-President Eisenhower opined that he was dismayed anyone could conspire to deceive Americans in such a way.
Earlier this month, Europol, a multi-nation EU-based law enforcement information sharing agency, revealed that 680 recent soccer matches were likely fixed for gambling purposes. The agency pinpointed more than 400 players, referees, and league/team officials from at least 15 countries as being involved in the game-rigging. Such revelations certainly resonate with American sports fans—the names of NBA referee Tim Donaghy, Arizona State basketball player Stevin Smith, Pete Rose, and Shoeless Joe Jackson immediately come to mind when thinking about prominent scandals here.
Gambling-related fraud of sporting events is a big deal, as it should be. Today (February 14), lawyers for the NCAA, NFL, NBA, MLB, and NHL are in a Trenton, New Jersey federal courtroom to argue that Governor Chris Christie's plan to allow Nevada-style sports gambling in the state runs counter to a federal law barring such wagering in all but four states and would ruin the integrity of sports. Specifically, the sports leagues, in their August 7, 2012 complaint, say that New Jersey's plan would "irreparably harm amateur and professional sports by fostering suspicion that individual plays and final scores of games may have been influenced by factors other than honest athletic competition."
What the sports leagues are alluding to is a concept called uncertainty of outcome. It's what differentiates spectator sports as a form of entertainment from other (scripted) options such as books, films, musicals, and professional wrestling. It's a primary reason sports are at least a trillion-dollar business—why broadcasters are willing to pay billions for the right to telecast sporting events, why advertisers were willing to pay upwards of $3.8 million for a 30-second advertisement during the recent Super Bowl, and why consumers are willing to dole out hundreds of dollars a year for various sports channels on cable television and pay-per-view events. It has even been analyzed in legal proceedings. In a high-profile 1997 case concerning who owns real-time sports data under copyright law, the federal judge reasoned that "[u]nlike movies, plays, television programs, or operas, athletic events are competitive and have no underlying script."
Uncertainty of outcome is also the reason American sports fans should take a moment to pause when commercialized sports are juxtaposed with the Quiz Show Scandal from more than 50 years ago. The web of laws applicable to sports, such as the Sports Bribery Act of 1964, only prohibits gambling-related corruption. There is no federal law explicitly preventing the clandestine manipulation of sporting events to enhance suspense. This gap is problematic. As with certain televised quiz shows decades ago, the in-game action of sporting events can be contrived in profit-maximizing ways. The federal law passed in the wake of the Quiz Show Scandal does not explicitly include televised sports; it only forbids deception of the public in connection with contests of an "intellectual" nature. Wheel of Fortune, Jeopardy!, and Who Wants to Be A Millionaire are covered by the law. Football, basketball, and baseball are not.
The sports-league plaintiffs in the New Jersey lawsuit correctly point out consumers care about the integrity of sports outcomes. They know that a considerable percentage of fans will tune out if the games are perceived to be rigged.
However, it is insufficient to act as though gambling-related game-fixing is the only threat in this regard. A non-gambling artifice bent on increasing suspense for the purpose of viewer engagement and advertisement effectiveness is equally dangerous. Academics have extensively researched the extent that uncertainty is important to ticket sales, at-home viewers, and sponsor marketing. Published empirical studies have found increased fan enjoyment during buzzer beaters, certain pecuniary biases among sports referees, and heightened advertiser brand effectiveness following close contests. Leagues, broadcasters, and marketing agencies are surely aware of such studies, all of which probably mirror their own in-house analyses. Accordingly, they have a strong incentive to be tempted to act insidiously absent any explicit prohibition.
To be sure, this concern is as of now hypothetical. Outside of areas like World Wrestling Entertainment matches—which are obviously scripted—evidence of sports outcomes being manipulated to juice fans' reactions is scant. Even so, the recent Europol soccer match-fixing news, coupled with the ongoing litigation in New Jersey, has highlighted the chasm between gambling and non-gambling integrity concerns. Sports fans deserve better than the current void. Policy-makers and sports industry stakeholders should take note and close the legal loophole that could allow the Quiz Show Scandal to repeat itself in sports.