Wise Guys: Sports Betting and the Mafia

The Sicilian-American Mafia is known by many names. The mob. Good fellas. Wise guys.

Ace pickers in sports betting also go by many names. Sharps. Professional handicappers. Wise guys.

This shared pseudonym is more than just a coincidence. The Mafia has had its black hand in the pot since the inception of sports betting. This is true even in recent history. No one knows that better than Thomas Seigel.

You may not know Seigel by name, but you’ve likely heard of his most famous case (more on that later). The former mafia prosecutor has a background with the U.S. Attorney’s office, working specifically in the organized crime racketeering division.

I was fortunate enough to speak to Seigel about the recent push to legalize sports betting in many states, and how this change in legislation could whack one of organized crime’s key markets.

But First: A Little History

Early sports betting centered around horse racing, but professional baseball further popularized the activity. Sports betting was initially viewed merely as a form of entertainment. But the pastime was tainted by the Black Sox Scandal. Following an investigation championed by sportswriter Hugh Fullerton, a grand jury discovered that several disgruntled Chicago White Sox players were bribed into throwing the 1919 world series.

This scandal was one of the first documented instances of attempted match-fixing. Although the players involved pulled out of the deal early, the White Sox still lost to the Cincinnati Reds. The following year, eight Sox players were indicted on conspiracy charges. They were eventually acquitted but were banned from playing professional baseball. The stain of scandal stuck with the White Sox for years to come.

A Job for the Mob

In this and several other cases, many suspected Mafia involvement. But for a long time, no one could prove it. However, the Boston University point-shaving scheme confirmed what many already thought. And according to Seigel, sports betting – along with loan-sharking – are the Mafia’s “bread and butter.”

As of the late 70s, sports betting and match-fixing were as active as ever – and mobsters were the main sponsors. But in 1992, the United States outlawed sports betting nationwide (save for a few states). And as we all know, outlawing something guarantees the problem will go away – right?

Notorious T.I.M.

Fast forward 15 years. In 2007, Tim Donaghy, an NBA referee, was caught betting on matches he was officiating. Sports betting was, of course, still outlawed at that time. But this particular case carried implications that Donaghy was intentionally making (or not making) calls to influence his games’ outcomes. In the years following the case, Donaghy has stated that organized crime “is always going to be there”. According to ESPN, he’s even alleged that the mob threatened his family after he exposed NBA match-fixing. Seigel handled the case against Donaghy, along with others involving illicit sports betting.

From the first years of professional sports to the early 2000s, the Mafia has maintained its involvement in sports betting. Given that it wasn’t exactly viewed as wholesome – and after 1992, it was illegal – it makes sense that bettors would turn to illicit services offered by the Mafia. But in 2018, the laws surrounding sports gambling changed.

Place Your Bets (Legally, Of Course)

In May of 2018, the Supreme Court lifted the ban that prohibited sports betting in states outside of Nevada. The decision to allow sports betting was left up to individual states – and many wasted no time legalizing it. According to Action Network, in more than half of U.S. States, sports betting is legal in some form. In several other states, legislation is awaiting approval. Lifting the ban has drastically changed the world of sports gambling, with record highs being documented since 2018.

Over the last four years, sites like FanDuel and DraftKings have increased in popularity. Some publications have even introduced their own sports betting sites, like FOX (FOX Bet) and Sports Illustrated (SISportsbook). Websites like these make sports betting more streamlined, and they ensure a level playing field. Additionally, you can place bets using online payments rather than cash.

Illinois breaks sports betting record with $286 million wagered on March Madness https://t.co/MSQVHY4dzU

— St. Louis Post-Dispatch (@stltoday) April 13, 2022

According to Seigel, the mob may lose customers to new online betting options for several reasons.

This simplification of sports betting could mean that more people are likely to pursue legitimate options when gambling rather than relying on Mafiosi. So what does this mean for the Mafia’s stake in sports betting?

The Mob out of a Job?

Recent advancements in the world of sports gambling pose a number of problems for the Mafia.

• Cash transactions are dwindling. Cash payments are harder to trace. If you don’t declare your winnings, you don’t have to pay taxes on them – and neither does the mobster running the operation. But credit card payments and online transactions create a paper trail – and as Seigel puts it, the mob doesn’t like paper trails “virtual or otherwise.”

• Legal sports betting is becoming easier. For those who aren’t interested in evading taxes, there’s no incentive to gamble illegally. The ease of online betting trumps the hassle of working with an illicit (and dangerous) vendor. Even for states with in-person-only betting, there are far fewer hoops to jump through. If you’re willing to declare your winnings, the Mafia loses a key advantage.

• Match-fixing is rare in major sports. One avenue through which the Mafia could still profit is match-fixing. Bribing athletes (like the White Sox) and officials (like Tim Donaghy) to influence the outcome of sporting events could still be a money-maker. But from 2000 to 2010, there were only 4 cases of match-fixing in the U.S. compared to more than fifty cases internationally. There are likely many undocumented instances – but Seigel says match-fixing is rarer than you’d think.

All Bets Are Off… Or Are They?

Despite the long-standing history between sports betting and the mob, the United States Government may have finally thrown a wrench into the operation. So does this mean the end of mobsters in sports betting? Well…not exactly.

Seigel seems to think that while the Mafia’s involvement in world sports may have to adapt, it will never fully go away. Why? Simply put: there’s money to be made.

Organized crime may still have a place in gambling. Mobsters will just have to wise up to keep up.