Thursday\u2019s news regarding the latest, and to date most consequential, NBA gambling scandal has brought unprecedented focus to the various problems flowing from legalized, normalized, and heavily monetized sports wagering.<\/p>\n
The biggest problem rarely if ever is discussed.<\/p>\n
Craig Carton, whose gambling issues previously resulted in incarceration, recently expressed a valid concern regarding the NFL\u2019s looming acquisition of a 10-percent equity stake in ESPN.<\/p>\n
\u201cESPN needs to divest immediately from ESPN Bet, and here\u2019s why,\u201d Carton said Friday, via Sean Keely of AwfulAnnouncing.com. \u201cThe NFL owns a piece of ESPN, meaning by default, they own a piece of the sportsbook. Well, you can\u2019t have it both ways, because if the NFL benefits from you losing your wager, then they\u2019re incentivized to control the outcome of games, because it means more money in their pockets.<\/p>\n
\u201cMeaning they have a financially vested interest now in you losing whatever wager you make on NFL games. Meaning it\u2019s more likely for someone to say, \u2018Hey, if there\u2019s a gazillion dollars on Team X to cover, it\u2019s in our best interest that they don\u2019t cover. Make sure the referees call a game a certain way.\u2019 Now, I\u2019m taking liberties there, of course, but that\u2019s the problem. When you want people to never question your integrity, you can\u2019t own a piece of a sportsbook, and they do<\/a>.\u201d<\/p>\n On the surface, Carton\u2019s concerns aren\u2019t technically accurate. ESPN does not own ESPN Bet; PENN Entertainment operates the entity<\/a>, and ESPN licenses its name to PENN. (That said, ESPN received PENN stock options<\/a> as part of the deal, allowing ESPN to acquire partial ownership of PENN.)<\/p>\n Also, the NFL does not yet own 10 percent of ESPN. That deal requires the approval of the federal government, and there\u2019s no guarantee approval will ever be given. It\u2019s currently possible, if not likely, that the ESPN Bet arrangement will end<\/a> before the NFL-ESPN is approved (if it ever is).<\/p>\n That said, Carton\u2019s concerns ring true, for a different reason. NFL owners currently are allowed to own a piece of any company that operates a sportsbook. As the league told PFT in February 2024: \u201cAn owner would be able to hold up to 5 percent<\/a> in entities that generate revenue from sports betting operations, provided the individual has no involvement in management of the company (such as an officer or director or in a management role).\u201d<\/p>\n In other words, independent of the league\u2019s looming 10-percent stake in ESPN (and, in turn, a piece of PENN), NFL owners are permitted to separately and directly own a piece of the \u201chouse.\u201d In theory, up to five percent of every \u201chouse.\u201d <\/p>\n