Bizdom U 2009: Andrew Hwang

Source: http://www.businessweek.com/bwdaily/dnflash/content/jul2007/db20070730_172552.htm 

The Nevada State Gaming Control Board reported $2.4 billion in legal sports wagers in the United States for 2006.  Undoubtedly, there is an indefinite amount of unreported illegal wagers.  Astonishingly, the sports betting industry is more than six times larger than the 122 professional sports franchises of the NFL, NHL, MLB, and NBA combined! Football is the giant of sports betting, which accounts for about half ($1.1 billion) of all bets waged in Nevada.  However in recent years, NBA basketball wagering has increased 24% from $513.5 million in 2005 to $635.4 million in 2006.

Recently, former NBA referee, Tim Donaghy (40), turned himself in to the authorities after admitting to fixing games during the last two NBA seasons, which included 139 regular-season games, eight playoff games, and four preseason games.  David Stern, the NBA Commissioner, called the scandal “the most serious and worst situation” in his 40 years with the league.  Donaghy dealt with the mob who used his gambling debt to force him to share information and possibly fix NBA games.

R.J. Bell, a sports betting expert who runs the Web site pregame.com, claims that an NBA referee can highly affect the outcome of a game compared to a NFL referee because of the number of foul calls per game; it only takes a few foul calls per game to hinder a six point spread. Bell states that bookmakers obtain an abundance of information on each team and individual players over the six month season, and are able to set point spreads that predict winners 70% of the time. “The market efficiency is higher in NBA sports betting than the NFL, making it harder for the average bettor to win money,” he says.