The Effects of The Rise of Gambling on The NBA – A Case Study

Lucrative sponsorships and abundantly covered scandals are twin facets in a changing world of sports, showcasing a volatile but highly potent environment.

As the gambling industry finds stride in legislative relaxation and its own digitalization, opportunities arise without fail. Statista surveys show approximately $1.9 billion dollars spent on gambling advertising in 2023, showing that the industry is eager to promote its products and services.

Given the ascension and the progressive legalization of this industry, it should be nobody’s surprise that gambling has started to influence the NBA as well. As one of the most lucrative professional sports leagues in the world, the premier basketball association has increasingly numerous revenue sources, and gambling partnerships are one of them.

The purpose of this article is to contextualize gambling (particularly sports betting) in the USA and then discuss a series of effects on the league. We will look at both the positive and negative aspects of this relatively recent dynamic, thus uncovering this matter in a balanced and reasonable manner!

A Short Timeline of Sports Betting in the USA – Since When?

We need to explain when, where, and how sports betting has become an accompanying factor of professional sports in the USA. In many cases, America has historically set the tone for gambling practices on an industry-wide level over the course of the last century.

The most historically significant acts that have defined sports gambling in recent memory would be the back-and-forth caused by the Professional and Amateur Sports Protection Act. After its 1992 ratification, its principle was to mandate the lack of sports betting legalization, among other forms of gambling. Without a few exceptions, this act essentially made sports betting a legal impossibility on a federal level.

The answer was the outcome of the Murphy v. NCAA – a case in which Phillip D. Murphy (Governor of New Jersey) sought the overturn of PASPA. After a historic decision by the Supreme Court in 2018, the outcome dictated PASPA was unconstitutional because of its conflict with the 10th Amendment. As such, various states quickly legalized sports gambling, spearheaded by New Jersey.

As of 2024, 38 states currently allow sports betting, with the majority also allowing it in online fashion. Despite that, there are still several states that have yet to legalize it, including Texas, California, Georgia, Oklahoma, and Alabama.

Applied Analytics – From Successful Bets to NBA Consultancy

Despite the subsequent fallout that followed his ascension in the NBA world, the example of Haralabos Voulgaris is quite inspiring. Despite growing up as the son of Greek immigrants in Canada, Bob Voulgaris ascended thanks to his gambling acumen. As a result, he became a social media star because of his use of data and advanced analytics.

At his greatest heights, he was one of the best sports bettors in the world, specializing in gambling in the NBA. He made use of data accruement and analytics to understand coaching strategies, player tendencies, and even refereeing patterns. His use of new-age number science led to successful NBA bets, thus helping his reputation.

He shook off his reputation as a simple analytics-based gambler and became a front-office member of the Dallas Mavericks right after drafting Luka Doncic in 2018. He became ‘Director of Quantitative Research and Development’ and served as then-owner Mark Cuban.

Lasting a bit less than three years, he was let go by the Mavericks in June 2021 after several reports stated several issues between Voulgaris and the executive branch of Dallas’ front office. Despite his eventual departure from the NBA, Bob Voulgaris proved that testing analytics in gambling became relevant enough for the league people to take notice.

The Jontay Porter Fiasco

Despite being the less talented, working, or successful brother of NBA champion Michael Porter Junior, Jontay Porter became the solitary talk of the league, American sports journalism, and even became a national sensation. Without losing ourselves in details, we should showcase why this absolute fiasco is relevant to the discussion.

As of July 2024, Jontay Porter has pled guilty to wire fraud. He did so by gambling on his own games. The entire timeline begins on the 25 of March, 2024, when reports came out that the NBA is investigating betting irregularities on its games, followed by sportsbooks handing over reports according to an instruction by the Colorado Division of Gaming.

After several proposition stakes and parlays for several under bets with very specific conditions and very high stakes, the league took notice. The corroboration with Jontay’s visible distress started an investigation that proved that he had placed 13 bets on NBA games via some other person’s account, but also for ‘disclosing confidential information to sports bettors, limiting his own participation in one or more games for betting purposes, and betting on NBA games’. (per the league’s official statement)

As a result, he was a prime suspect in an immense scandal that would be detrimental to the league’s image as a legitimate sports association. NBA commissioner Adam Silver swung the hammer really, really hard, leading to a lifetime ban that shows that desecrating the game with fraudulent betting will attract zero tolerance.

Ongoing Sponsorships – New Cash Flow

If you went to the NBA’s Official Authorized Gaming Operators page, you’d see that there are no less than 17 operators. Out of all of them, FanDuel and DraftKings are also official partners.

According to SponsorUnited, total NBA sponsorship revenue reached $1.4 billion in 2023, only 5 years removed from its first official sponsorship. In 2018, the NBA opened the floodgates by getting into a historic partnership with MGM, moving exceedingly fast after sports betting legalization.

The NBA is very popular for parlay betting due to the numerous combinations that can lead to significant payouts. As a result, sportsbook operators contribute to the rise in popularity of the league, with some even offering bespoke casino bonuses that can be used in conjunction with sports wagers.

Conclusion

Now, it’s quite clear that Porter-like cases are a threat to professional sports, and leagues like the NFL have notoriously been heavy-handed with numerous suspensions for the players who’ve violated the league’s gambling policy.

However, the steady revenue stream, crossover use of analytics, and marketing opportunities do not seem to slow down the trend. As long as betting is responsible, it should continue to be an adjacent fixture!