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Monday, April 10, 2006
The Beauty of Bets: Wagers as Compensation for Professional Athletes Professor Jeffrey Standen of Willamette University College of Law has posted on SSRN a fascinating article that will be published in a forthcoming issue of the Willamette Law Review. The article is entitled "The Beauty of Bets: Wagers as Compensation for Professional Athletes." It may be downloaded at this link (the link goes to the abstract, and you can download the article for free through "Document Delivery" -- all you will need is an SSRN account, which is free). The article examines athletes betting on games and it concludes that such betting is a good thing. Here is the article's abstract: Professional and amateur leagues prohibit athletic participants from wagering on the outcome of the games in which they play. Most also prohibit wagers on any aspect of the sport; some even prohibit wagers on any sporting contest. At the same time, these leagues typically allow teams to compensate players based on individual performance outcomes and team victories and championships. Certain non-league tournament sports, particularly professional golf, even allow players to bet on pre-tournament practice contests.And here is an excert from the article's introduction that rings so true: Some fans also appear to enjoy financial aspects relevant to professional sports as much as they might enjoy the sport itself. For instance, some fans enjoy playing general manager, filling web sites with their analyses of how potential player trades or free agent acquisitions would comport with salary cap limitations. Likewise, many fans consume their taste for sports fantasy leagues, gambling on fictitious games made up of fictitious teams populated by real players playing in real games. Finally, some fans consume their sports viewing enjoying through gambling directly on the games themselves. Presumably, these fans’ taste for “financial sports,” such as fantasy trades, fantasy leagues, or wagers, shifts these spectators’ attention away from the pure competition of the sports themselves. Despite this possibility, the American professional leagues appear to tolerate side action by fans and fantasy league participants, and indeed welcome the added attention these financial fans bring to their players and leagues. The sports leagues produce the product that these financial sports fans consume; the leagues, however, do not capture the gains from their product.Jeff delivered an excellent talk on this article at the Future of Sports Law symposium held at Willamette Law last month. This is fascinating topic. Should athletes bet on games? And is it a good thing for the parties involved? 30 Comments:
So long as such wagers are disclosed, allowing monitoring for abuse, I see no reason in principle why they would not have the same beneficial incentivizing effects that options have in the executive compensation concept. Professor Standen's paper is enjoyable and thought provoking! I would argue that if such a plan were adopted, the benefits would need to be retroactively extended to Pete Rose in the form of an invitation to Cooperstown.
Very interesting concept.
Richard--WHAT "civil right of athletes" is there to gamble? NONE.
Anonymous:
I knows its trite, but I believe in the old saying that "It's not whether you win or lose, it's how you play the game." Personally, if mere internal motivating factors don't push an athlete to succeed, I don't want to watch him play.
One positive outcome would be the elimination of "garbage time." It's an interesting concept, but in practical terms I don't think it would work. Players would be incentivized to play to "the line" not to win. The increased likelihood of players and coaches (and owners) interacting with legal and illegal gambling entities is also troubling. Just think of the trouble Wayne Gretsky's wife would have gotten herself into.
I would agree with Bill in terms of playing to the line, but garbage time would not necessarily improve if one team's incentive was to not score in playing the line. Unless "lines" are eliminated, teams will play for the line that often does not translate into a win or loss. If you spend some time in sports books during March Madness, the importance of said lines are palpable.
I am surprised no one mentioned horse racing and the parallels it can draw to such a discussion. There, not only is betting encouraged, everyone - from owners to jockeys (except horses) is almost expected to put some dough down.
It would only work with individual sports, in which players are already incentivized to win the purse.
headache smith didn't gamble to throw games.....he only shifted the point spread. Invariably an athlete will attempt to manipulate the points and his team will lose because the athlete is NOT in complete control of the line(he has teammates and competitors). this could only work for "straight bets", where their is no points spread. interesting otherwise!!!
it could, conceivabley, be feaseible in a "point spread system" so long as the player bet on his team to cover. however, i don't like the possible results. what if MJ's championship winning shot over Craig Elo never happened b/c some role player had some cash on the game and he thinks "its my money so its my shot". No dice.
I think such a system would work 99% of the time with no problems. However, the remaining 1% of games would create disaster.
I believe this would not work. Crimes like gambling and prostitution are illegal for a reason. It is not taxes, it is because it leads to violence. Now, some can be regulated, ala Las Vegas, but the structure behind this is too bare and there is too much room for error.
as a former college hoops player, i love it.... with some quantifiers...oh, and college players should be allowed to bet too, since they don't get paid (and don't give me that "you get an education" crap.)
crud... i forgot to mention to tommie-- when you said "Crimes like gambling and prostitution are illegal for a reason. It is not taxes, it is because it leads to violence" do you have any evidence of this?
Several crimes that many people believe to be small are illegal because they lead to other crimes, more serious crimes.
ANONYMOUS:
"Several crimes that many people believe to be small are illegal because they lead to other crimes, more serious crimes."
Actually some crimes do lead to other crimes. How can you say that some drug attics, who cannot afford to buy the drugs, do not start prostituting for drugs, not even money. If prostitution was legal, there would be more people resorting to it to make money.
Tommie:
Richard,
Tommie:
"Actually some crimes do lead to other crimes."
First off, the theory of why some crimes were made illegal was told to me by a ciminologist/college professor/ex-NYPD 30 year veteren who has done studies on the field. I am not saying I agree with it 100 percent, but it does make sense. And we are talking when the laws were created, which was many years ago. Now we are able to have SOME structured and monitored operations of these illegal crimes.
But one thing that both I and somebody earlier stated is that the athletes wagers should be openly and immediately viewable by the public. The public then is privy if not to the knowledge, at least to what the athlete that has the knowledge is comfortable with.
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