Creating Confidence

Recent sports betting scandals have hurt the image of professional and college sports as leagues, regulators and operators look to address fears that it could be the tip of the iceberg.

Since sports wagering has expanded throughout the U.S. after the Supreme Court struck down a federal ban in May 2018, that has made integrity monitoring and the use of technology to catch improperities more important than ever as the U.S. gets used to this new national sports betting landscape.

Over the past two years, the NFL has suspended several players for either betting on league games or making sports bets from their team’s facility. In 2023, then-Alabama baseball coach Brad Bohannon was fired for sharing information with a gambler about his starting pitcher getting scratched from the lineup.

Earlier this year, the NBA banned the Toronto Raptors’ Johntay Porter for life for betting on his own team’s games and sharing information about his health that allowed bettors to win prop bets. In June, San Diego Padres infielder Tucupita Marcano was given a lifetime ban for betting on MLB games.

All of the cases were uncovered when people placed or attempted to place bets with legal sportsbooks.

Lawmakers across the country, when they legalized sports betting, expected regulators to create a safe, legal market void of corruption and grounded in integrity, according to Cathy Judd-Stein, former chair of the Massachusetts Gaming Commission. And integrity monitoring is an important part of those consumer protections, she adds.

“Regulators, operators, leagues, the teams and the NCAA are concerned about any situation where there’s bad action and bad actors are somehow impacting the integrity of the sports industry,” Judd-Stein says.

“Some argue the few high-profile gambling incidents are due to the rapid expansion of legalized sports betting, but I join the counter argument that it’s really the regulated market at work that is allowing for the transparency lacking in the underground market. Things are getting caught faster as the technology keeps on improving. It’s an important deterrent, because anyone thinking of breaking the rules is going to realize they’re going to get caught with the monitoring system in place.”

For gaming regulators, integrity monitoring is needed to ensure the public confidence in betting, Judd-Stein says. It’s unlikely any gaming regulator in the United States is going to issue a sports wagering license unless the applicant contracts with an independent integrity monitoring firm that has the capacity to detect any hint of non-compliance, game manipulation or suspicious activity, she notes.

There’s a lot of monitoring under way to ensure the integrity of sports wagering. Regulators have their own auditing teams to check for compliance. Sports betting operators monitor for unusual betting patterns, and the leagues have their own internal monitoring security teams to investigate irregular bets and line movements.

“There’s a lot of monitoring in addition to the independent monitoring, but what’s special about the independent integrity monitor is their scale and technological capacity,” Judd-Stein says. “That’s why it’s critical to know about these independent eyes monitoring the whole ecosystem.”

AI as Monitor

One company is leading the way. It’s the renamed Integrity Compliance 360 (IC360), created as part of a merger involving its previous entity U.S. Integrity. It has contracts with sportsbook operators and is licensed in 40 states, Washington, D.C., Puerto Rico, and Ontario, Canada with 109 sportsbook clients.

Launched in 2018, IC360 works with all professional sports leagues, colleges and regulators, and uses artificial intelligence to analyze wagers. It sends out alerts of suspicious activity and follow-up reports for investigations, says company President Matthew Holt.

“AI is very important for us,” Holt says. “The idea that we can become better, more accurate and more sophisticated in the way we identify abnormalities is very important. Given there are thousands of prop markets on every single game there is, the ability to use AI is a crutch to identify an abnormality that can potentially be a nefarious activity, get that information out to an analyst or investigator quicker and then get out to the industry faster.

“At the end of the day, if you’re finding out there’s match fixing two weeks after the game, all the people that made the bets got paid and ran away with the money. You need to identify all of those incidents before those bets are paid.”

Holt says sports betting integrity issues are nothing new globally. When the U.S. market opened in 2018, the country started off equal to or in a better place than European countries.

“I still think we have a long way to go,” Holt says. “You have to remember that legal sports betting in the U.S. is only six years old, and that we lost two years to Covid. Not every state has been open for six years. Some opened a year ago or two years ago, so we’re all still learning and getting better as we go. What we’ve learned is that we need as much information as possible, as much data as possible and as much collaboration as possible.

“With the amount of markets available now, we need to use as much AI and models and algorithms as possible. To think any person can watch thousands of markets and identify which ones might be manipulated is crazy. Where technology is coming in is the identification of abnormalities, and we can get those in the hands of qualified investigators and analysts who can then investigate further why something might be happening there, and it could potentially be something nefarious.”

The latest incidents that got plenty of news coverage were caught quickly, and it shows the monitoring system is working in the legal market, Judd-Stein says.

“AI and other technological advances are under way, and I have confidence they will continue to build systems that catch any kind of illegal activity.”

That’s becoming even more important.Ohio and other states have regulators expanding integrity monitoring requirements so that the monitors won’t only look at what information was available publicly and not only flag unusual or suspicious gaming activity, but be proactive and take corrective measures when they identify integrity issues, Judd-Stein says.

“Regulators are starting to expand what they expect of integrity monitors, which I think is because of increased capacity to be proactive,” Judd-Stein says. “That makes me think technological changes are under way. There are opportunities here for great technological advances.”

With its technology following the merger, IC360 offers prohibited bettor solutions. It puts an app on the server of every team, college and league, which in turn uploads a list of every player, coach, trainer and athletic trainer, Holt says. The company does the same on the sportsbook side, and using both can identify prohibited bettors in real time—with 235 cases in the last 24 months.

“We went from one product to 10, and we’re pretty excited about where we are in the ecosystem,” Holt says.

Proactive Recognition

One online gaming solutions company says it has unveiled a new solution for the integrity monitoring space that will be a game changer. Houston-based GambleID has developed solutions such as Athlete Response Monitoring (ARM) that combine AI with facial recognition and other data with the goal to stop an improper bet before it’s placed, rather than investigating bets after the fact, according to company founder and President JD Garner.

ARM allows the leagues and teams to get information directly, and because athlete activity is being monitored, the leagues or teams can identify potential gambling problems and intervene before a sportsbook might, Garner adds.

“It’s one of our new products, and internally we’ve been using it for a couple of years,” Garner says. “We’re able to identify professional athletes in most of the major sports and alert the sportsbooks that created an account, made a deposit or made a bet.

“We’re bringing in coaches, umpires and on-field staff as well as family members. If a sibling, uncle or mom or dad of a professional athlete is signing up to make a bet, we can alert that operator in real time.”

What’s unique about the solution is it warns operators prior to the bet happening so it can be rejected, Garner says. Traditionally, integrity monitoring happens after the bet is placed, which means wagers and not people are being analyzed, he notes.

“The clients on our platform are not going to have infractions happen,” Garner says. “We’re catching it before it happens. For those who have had infractions, we would be able to alert them ahead of time. Our goal is to never be in the news.”

Garner says Ohio is among states implementing laws to prevent professional athletes from betting on their own sports and added that this will be a growing trend over the next 12 to 18 months.

“Every operator knows that regulators are breathing down their neck because they are getting pressure from the leagues, the federal level, from banks and other places to shore up the integrity of sports,” Garner says.

“The NCAA is requesting all operators cease prop bets with college players, and you know sportsbooks don’t want to see that slide over to the professional players because that would decimate a big portion of their income. They know regulators will be coming at them and say you have to stop these bets when it comes to insider trading on your platform. We’re geared up for that and we’re able to do that for them, and we see this as a transitional period for the industry.”

Holt says the recent wave of identifying betting issues is indicative that the guardrails and system put in place are working, contrary to those who suggest sports betting is damaging sports’ integrity. There were always issues around sports betting, but the problem prior to 2018 was that 95 percent of the bets were placed through illegal means via offshore sportsbooks or bookmakers. Identifying those abnormalities was tricky, he adds.

“Most of the issues that arose prior to 2018 were because the FBI caught somebody through another investigation, and that person would say I can get you in on this too and cut a deal,” Holt says. “Now we can use technology to identify and catch these folks in real time. We sent out the alert on the Alabama baseball coach three hours before that game even started, which gave the sportsbooks the opportunity to take the betting line down and hold those bets deemed to be suspicious.”

Tennis and esports have the highest percentage of alerts, while other sports fall within much smaller similar parameters, according to Holt.

“I think we’re in a good spot,” he says. “I think we need to continue to evolve, iterate and collaborate together and remember that we’re only six years into legal sports betting in North America outside of Nevada… We’re going to continue to learn what’s working and not working. We need to continue to lean on technology and lean on information, and I think we’ll be better for it.

“As long as the leagues and operators and the regulators in each of the jurisdictions stay committed to the integrity of the events, we will continue to see the rules, policies and procedures evolve as well.”

In the Toronto betting scandal, Holt says they sent the first alert on January 27 that there were abnormal betting patterns identified by operators over prop bets. Point-shaving scandals aren’t prolific like they once were, because it takes multiple players to participate, whereas a bet on a prop can involve one player and is much easier to manipulate, he notes.

“Most of match fixing and point-shaving-related issues we see now is one microcosm of the game—one prop, one quarter, and make or miss a field goal,” Holt says.

Some have called for banning prop bets in the legal market, but Holt says many have been caught that wouldn’t otherwise be found out in illegal betting markets.

“We caught Johntay Porter and the Alabama baseball coach and we caught a UFC fighter,” Holt says. “The reason we caught them was because those bets were made through a regulated market. We were able to identify and analyze the information, and operators can report it.

“The second we ban those markets we entice people to go and use illegal operators, bookies and offshore sportsbooks who don’t cooperate and participate in an integrity program and don’t share data and information; we suddenly lose that transparency we have to monitor these markets. Then it becomes more likely those prop bets will lead to manipulation and match fixing.”

The industry wants IC360 to make sure they’re doing the best they can for integrity purposes, Holt says. If bettors start to feel that sports is no longer best-on-best and max-effort-on-max-effort every single play, then people tune out because they believe the betting markets are corrupt.

“People become less interested and less trusting and utilize it less,” Holt says. “The leagues are as committed as they could be. The sportsbooks are putting in as high of a commitment as they can. We continue to invest in technology and resources constantly, and that’s how we all continue to get better.”