December 1, 2004

When Sports Gambling Goes Good

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The lottery is one of America’s oldest and proudest institutions. Every week, millions of Americans pick random numbers in the hopes that one day, the stars will align, and their numbers will match the winning ones. How much money has been thrown away on a seemingly arbitrary venture? A lot. In New York State alone, lottery revenue for the past fiscal year was over $5.7 billion. Playing the lottery is an addiction. No one wants to quit playing the week before his/her numbers actually win. Thus, we continue to spend money on hopeless wagers.

While the lottery is held in some regard because of its educational benefits, sports gambling is frowned upon by the majority of society. The first word associated with “gambler” is usually “degenerate,” and gamblers are portrayed as shady characters by the media. While there are state-sponsored lotteries in 38 states and the District of Columbia, sports gambling is legal only in Nevada and Oregon.

Of course, there are numerous problems associated with sports gambling. We’ve all heard of the point-shaving scandals, seedy bookies, and Pete Rose. Nevada sports books record $2.5 billion per year in wagers according to the 1999 National Gambling Impact Study, while illegal wagering on sports is estimated at $80 to $380 billion annually. With off-shore Internet sports gambling sites gaining popularity (over 400 sports betting sites according to a 2001 Bear Stearns report), sports wagering is not going away.

Sports fans have always looked for ways to become more involved with the games and teams they follow. The most obvious way to attain this goal is to become a professional athlete. Given the relative difficulty of doing that, the next best thing is gambling. For those too wary to start gambling, there’s fantasy sports leagues. While everyone gets excited as the fantasy draft nears, by the end of the season, there are only two or three people still paying attention to their teams.

Then there’s the March Madness office pool. This little devil has been improving productivity in the American workplace for many years now, but does the person with the most basketball knowledge usually win? No. Instead it’s the guy who picked his alma mater or who made his picks by flipping a coin. When it comes down to it, does anyone actually want to pick Duke to win (except the Crazies)?

What are we left with? Not much, unless of course you live in Oregon.

Oregon, which has given us Nike products and superbly-colored football uniforms, has quietly been conducting its own sports lottery game since 1989.

Sports Action is a game conducted weekly during the NFL season. It works just like a regular lottery, but instead of picking numbers, you pick the winner of an NFL game against the spread, along with a number of other props. Unlike a regular sports book, Sports Action only lets you wager on parlays, with a minimum parlay of three teams.

Ticket prices ranges from $2 to $20 and for each dollar wagered, a Sports Action player can win a guaranteed $5 on a three-team parlay. If you want to go crazy, you can pick the winners for five to 14 games/props. The money you win in these pari-mutuel wagers depends, of course, on the number of people who make a similar wager. For week 11, there were two correct tickets in the 12-of-12 prize pool, netting those winners $2371.90 for each dollar wagered. In total, $805,630 was awarded in week 11, the highest payout of the season.

Now, since the point spreads make the odds 50:50 for each game, the true odds on a three-team parlay should be 8:1, but Sports Action only gives 5:1 odds. This is because, just like the regular state lotteries, part of Sports Action’s revenue helps fund state education ($2.5 million per year). While this is a far cry from the New York lottery education revenue, Oregon is a much smaller state, and Sports Action is only run for half the year for one sport.

Now, if you’re a regular lottery player with sports knowledge, would you want to keep putting money on random numbers or would you want to actually have a chance to win some money (although not in the million-dollar range)? Unfortunately, Oregon remains the only state in the country with a sports lottery game. If a game like Sports Action was expanded to other sports and other states, people would finally have an alternative to illegal sports wagering. These games would generate more money for education and fill a void in the hearts of sports fans everywhere. In order for this expansion to take place, states would need to each lift the ban on sports gambling. Until then, we’re stuck with the regular lottery games. If you’re looking for some numbers this week, I recommend 1, 2, 3, 4, 5, and 6. Hey, you never know.

Jonathan Auerbach is a Sun Staff Writer.I Never Kidhas appeared every other Wednesday this semester.

Archived article by Jonathan Auerbach