The year is 2020 and Americans have wagered over $22.7 billion at legal U.S. sportsbooks across more than 20 states — including in New York — since the federal ban on sports wagering outside Nevada fell two years ago. But if legal sports betting is so widespread across the U.S., why are offshore sportsbooks operating illegally in the U.S. still getting heaps of attention in mainstream media? And what exactly is wrong with that, if anything?
Perhaps you saw the most recent kerfuffle. Here’s how I think it came about: A publicist for the offshore bookmaker(s) contacts, among others, a sportswriter for the New York Times. The idea is interesting and valid: How will the novel coronavirus pandemic impact sports betting, at a time when pro sports leagues are rebooting in fan-less bubbles, amid mass upheaval and uncertainty? The publicist has knowledgeable sources at the ready to address the questions, and they can deliver comments quickly. The sources are spokespeople or oddsmakers from these offshore sportsbooks, businesses that accept wagers from U.S. bettors in violation of federal law and also state law in many jurisdictions. A writer and editor for the Times, also known as the “Newspaper of Record,” publishes the story, using sources representing these offshore enterprises.
The writer of the recent Times story did not respond to Sports Handle’s email requests for comment.
But based on my own experiences, I am fairly certain that the chain above, leading to publication, closely represents how that story made it to print. And its publication in a paper with a massive worldwide reach drew the outrage of, among others, Joe Asher, CEO for William Hill US, a popular but derided-in-some-corners sportsbook operating legally in a growing number of states from Nevada to Indiana to New Jersey.
It’s really outrageous that the @nytimes would quote and link to offshore sports books. Why would they promote these illegal businesses?
How Does the Coronavirus Affect Sports Betting? https://t.co/FroXWQz7Er
— Joe Asher (@JoeAsher) July 29, 2020
The Times article raises dozens of questions including questions of law, of publicity and public relations, business ethics, journalistic ethics, advertising practices, customer satisfaction, and consumer protection. Many of the questions don’t have good answers yet, and there are far more questions than I could attempt to ask and answer in a readable article.
So here I wish to identify five questions, largely focusing on the media aspect. These questions warrant continued discussion and will arise again over and over (possibly in a court of law), as the post-PASPA legal U.S. sports betting industry moves through the terrible twos.
(1) What is the non-legal, practical impact of the New York Times’ usage of insights/quotes from sources at offshore sportsbook(s)?
This is subjective. No doubt the COVID-19/sports betting impact is a valid and newsworthy topic and generated discussion in many other publications. But is the Times’ usage here “endorsing” these particular sportsbooks? Publication of comments/accounts from a source is not tantamount to endorsing that source, the source’s organization, or even the truth of the source’s comment or assertions. Indeed, a journalist’s job is to report the unbiased truth, and part of the truth is discussing half-truths and outright lies.
There’s also the issue of linking to the sportsbook’s domains. Is that tantamount to advertising, and therefore illegal, as the American Gaming Association’s Casey Clark insists?
The @nytimes egregious marketing of illegal, offshore sportsbooks is shameful at best. Linking to them is akin to advertising their services, which is, of course, illegal.
— Casey Clark (@caseyclarkdc) July 29, 2020
It’s not as clear-cut as he suggests. A link to another publication/comment most often is simply basic attribution, giving credit, or suggesting further, relevant reading. To link to the source website or original reporting is common practice. Now, if there were some sort of kickback arrangement here (very doubtful), or payment for the linking, that would be a different story; no one is alleging that here, to be clear.
How about “legitimized?” That one is tough, because legitimacy may also speak to a sportsbook operator’s functional business practices. When finding quality information sources, does it matter whether or not certain offshore sportsbooks “do” bookmaking better?
Has the Times “whitewashed,” implied the legality of, or suggested that the offshore sportsbooks referenced are actually operating legally in the U.S.? I think that’s closer to the actual practical impact here. But even that is open to debate.
ICYMI, @beatingthebook rained 🔥 today on his show. He and @BillKrackman eviscerated many.
Here's one of the clips that VSIN probably doesn't want you to see (more to come): pic.twitter.com/AUoNZlxb7f
— Captain Jack Andrews (@capjack2000) July 30, 2020
(2) What are some legal issues, implications presented here?
The First Amendment affords individuals and news media very broad free-speech protections — for incisive reporting, nuanced opinion, blogging about nonsense, shouting and meme-ing on social media and beyond.
Some have argued that the quoting and linking to offshore sportsbooks is illegal: specifically, that it constitutes aiding and abetting a violation of the Federal Wire Act. Some legal cases such as United States vs. Edge Broadcasting Co., as well as the settlement between The Sporting News and the U.S. Department of Justice (DOJ), have approached similar issues around casino and lottery advertising.
Of course, governmental entities including the DOJ and the New Jersey Division of Gaming Enforcement (DGE) have spoken to and warned of prosecution for certain acts.
Here are relevant sections from a 2003 letter to the National Association of Broadcasters, from John G. Malcolm, deputy assistant attorney general for the DOJ, written as a self-described “public service”:
Because of the possibility that some of your organization’s members may be accepting money to place such advertisements, the Department of Justice, as a public service, would like you to be aware that the entities and individuals placing these advertisements may be violating various state and federal laws and that entities and individuals that accept and run such advertisements may be aiding and abetting these illegal activities.
Notwithstanding their frequent claims of legitimacy, Internet gambling and offshore sportsbook operations that accept bets from customers in the United States violate Sections 1084, 1952, and 1955 of Title 18 of the United States Code, each of which is a Class E felony. Additionally, pursuant to Title 18. United States Code. Section 2, any person Or entity who aids or abets in the commission of any of the above-listed offenses is punishable as a principal violator of those statutes. The Department of Justice is responsible for enforcing these statutes. and we reserve the right to prosecute violators of the law.
***
Broadcasters and other media outlets should know of the illegality of offshore sportsbook and Internet gambling operations since, presumably, they would not run advertisements for illegal narcotics sales, prostitution, child pornography or other prohibited activities. We’d appreciate it if you would forward this public service message to all of your member organizations which may be running such advertisements, so that they may consult with their counsel or take whatever actions they deem appropriate.
I think it is exceedingly unlikely that what appears in the Times story was anything but news reporting, i.e., not an advertisement for which any remuneration of any kind was involved. But however you define the usage in the article, and in the scores of similar instances across mainstream and local media, meeting the threshold for “aiding and abetting” of the Wire Act is a serious hurdle that would require establishing intent to facilitate a violation of the law.
This DOJ letter, from 15 years before a rapidly expanding legal sports betting market was born, was a warning shot. Clearly, the DOJ does not look fondly on the usage; however, there’s a clear demarcation made between advertising and First Amendment speech.
Separately, consider the likelihood of the government prosecuting the party publishing an alleged advertisement, when prosecution of the actual sportsbooks operating illegally is practically non-existent.
More recently, here is an excerpt from a November 2019 letter written by New Jersey DGE Director David Rebuck, “to inform news and media outlets and other entities that engage in sportsbook advertising in New Jersey about the importance of not endorsing or referencing internet sportsbook operators that are not authorized to accept wagers from customers located in New Jersey.”
The dispatch is most akin to an admonishment from a consumer protection standpoint — or a request for support of the state’s burgeoning legal sports betting market. The point is, it’s well-intentioned, but lacks teeth.
(3) From a journalistic perspective, is there anything unethical about referencing and/or linking these sources?
If the source’s remarks and insight are accurate, valid, truthful, newsworthy, even reasonable, has the journalist not done his or her job, or met ethical expectations? Does a journalist have a responsibility to quote/source/link sportsbooks licensed in U.S. jurisdictions only?
Here is further advice from Rebuck’s November 2019 letter, directed to news and media outlets and other entities “engaged in sportsbook advertising in New Jersey”:
“If an unauthorized site must be mentioned in a report, include a statement that the site is not licensed to provide sports wagering bets in New Jersey, and direct readers to the DGE website that contains the approved list of sports wagering entities and events.”
Has the Times committed any wrongdoing by omitting a statement that neither of the two sportsbooks mentioned holds a license to operate in New York, New Jersey, or anywhere in the U.S.? Is the Times in any way responsible, if a reader in New York, Wisconsin, or anywhere the sportsbooks are not licensed, reads the story and then transacts business with those sportsbook sites? The Times is read literally worldwide, and these sportsbooks, for whatever they might do in the U.S., are licensed in non-U.S. jurisdictions; we’re not talking about The Newark Bugle here.
How proximate is the newspaper reference to someone’s depositing of funds? How much responsibility does Joe Q. Bettor bear in managing his own finances and transactions? These questions don’t have clear answers.
Did the Times fail to vet the sources or those sportsbooks, realize that a “.ag” domain means Antigua, and wonder why, or explore? Was the information itself satisfactory, so in any case, the origin and licensure status of the sportsbook lack relevance?
The CEO of Smarkets and SBK (licensed Colorado sportsbook and a licensed betting exchange in the U.K.), Jason Trost, wrote on Twitter: “IIllegal offshore books don’t pay taxes, get software audited, follow responsible betting practice, undergo criminal background checks of staff, etc etc. While a lot of regulation is (very) poorly thought-out, to advocate illegal is better is irresponsible and uninformed.”
But again, is quoting and linking the same as advocating? Have I just advocated for Jason Trost’s Smarkets by quoting his remark on social media? Does taxation have any relevance here whatsoever?
And consider the source(s). At all times. As respected sports wagering industry observer and critic ‘Captain Jack’ puts it well:
There are no white knights in this industry. Everybody has dirt on their hands.
The "journalist" that cries about offshore makes a living from legal book ads.
The gaming assoc is a lobbyist for the interests of casinos.
The CEO knows offshore is a better product than his.
— Captain Jack Andrews (@capjack2000) July 30, 2020
Time for the disclosure: Sports Handle is owned by Better Collective, a gambling industry affiliate marketing company headquartered in Denmark, with U.S. headquarters in Tennessee. It is monetized in large part by commissions for sending players to U.S.-based sportsbooks. So question my agenda and credibility, too, as I’m sure you already have.
And here’s one more question lacking a clear-cut answer: Does it matter that some U.S.-based legal bookmakers rely on offshore bookmakers to set and adjust their lines, and thus to operate in general? Never mind if they do or don’t, or to what degree — that’s another question of honesty and ethics that exists separately from the law.
(4) Whose responsibility is it to educate media members about sportsbooks operating legally versus illegally in the U.S.?
The journalist who reports on the subject? Her/his editor? The American Gaming Association? The Department of Justice? William Hill U.S.? The National Sports Media Association? The New Jersey DGE and a coalition of other regulatory agencies for states in which sports betting is legal?
How about stakeholders shouting foul on social media? Well, that happens often and may be cathartic or provide a dopamine rush of likes, but does it have any practical value?
Sometimes, public service/education campaigns come by force. In a 2006 case between the DOJ and The Sporting News regarding advertisement of illegally operating sportsbooks, The Sporting News was required by the settlement agreement to spend $3 million “to inform and educate said audience that offshore/foreign gambling enterprises conducting, in whole or in part, online or telephonic sports bookmaking and casino-type gambling activities in the United States violate federal and state laws, as do United States-based gamblers using those wagering services.”
Perhaps the lessons weren’t lasting or widespread.
As recently as 2019, FOX Sports’ betting program “Lock It In” was displaying odds/lines from one of the same offshore sportsbooks referenced in the Times article. In print, you’ll find such references frequently in prominent local, national and international publications such as the New York Times, Wall Street Journal, Reuters, Atlanta Journal-Constitution, Washington Post, Indianapolis Star, and far beyond.
Fox using odds from Bet Online dot Antigua. pic.twitter.com/bk3HkXYgs3
— Marc (@MeltzVegas) October 3, 2018
And Barstool Sports as recently as 2018 was sponsor for/partner with an offshore sportsbook of generally ill repute, before Barstool President Dave Portnoy went scorched earth on it after a dispute. Now Penn National, which bought a $165 million stake in Barstool, is just weeks away from rolling out legal Barstool-branded sportsbooks in Pennsylvania and other U.S. markets.
(5) How do offshore sportsbooks penetrate mainstream media so often?
12/ Finally, continue to have the conversation about regulated versus offshore so that people (and media) can understand the differences. It is also important to listen to players and why they believe their needs are better served by offshore market.
— Jennifer Roberts (@JRoVegas) July 30, 2020
The ubiquity of mainstream media quoting offshore sportsbooks, rather than Nevada bookmakers or those representing any sportsbook licensed in the U.S., is in large part a by-product of PASPA’s 26-year run from 1992-2018.
The law created a vacuum that was filled by an enormous offshore and illegal bookmaking industry, through which U.S. residents wagered roughly $150 billion annually. During that time, offshore sportsbooks sought publicity — and found it frequently all across U.S. media.
The sheer volume of illegal betting was accompanied by U.S.-based media articles rooted in betting interest, novelty prop bets (topic for another day), or very basic stories about which team is favored. It makes for good or at least well-read copy for a large audience. Long-standing relationships were made between publicity pros and writers/reporters, establishing two-way communications.
Do PR representatives for legal sportsbooks now need to do a better job engaging with and penetrating media? Well, they are certainly trying and many have been effective. But offshore competitors, which aren’t going away, got a 26-year head start on some of the national U.S. sportsbooks.
Overall, the questions are numerous, and the answers, well, it depends who you ask.
