In early 2023, Iowa’s Department of Criminal Investigation (DCI) conducted an elaborate sting operation targeting illicit gambling at Iowa State University. The DCI employed GeoComply’s “geofencing” technology, which surveilled all web traffic occurring within athletic facilities, dorms, and other spaces on campus. The geofence collected the identifying information of users within the fence and discerned any use of sports gambling services.
In an ongoing lawsuit, athletes who were targets of the DCI investigation claim that the geofence was unconstitutional—it was placed without probable cause, warrant, evidence, or complaint of betting misconduct. GeoComply terminated its contract with the DCI, believing that the department had overreached the user agreement in its investigation. While the lawsuit remains to be settled, the NCAA has since softened the punishments for the accused athletes.
In the end, the small handful of criminal charges against the athletes were dismissed outright or pleaded down. Why would a state law enforcement agency go so far as to aggressively—and perhaps unconstitutionally—employ premier surveillance technology that would merely result in NCAA student conduct violations? In response to an explosion in the popularity of sports betting, a new era of overcompensatory, reactive enforcement policy has emerged.
Whether betting on the NCAA or the NBA, excessive punitiveness and scandalization of bettor misconduct have become the norm. By fixating on bettor misconduct, law enforcement and the media satiate the public appetite for scandal—but distract from the harms the sports gambling industry perpetrates against financially vulnerable Americans. Pouring law enforcement resources toward the behavior of bettors while the gambling industry outpaces and outgrows regulation is a misguided effort that ultimately fails to protect the public’s interests over those of bookies.
Since the federal ban on sports betting was struck down in 2018, an aggressive lobbying campaign by the gambling industry has lavished state lawmakers with millions in donations. Almost instantly, sportsbooks cemented themselves as a ubiquitous mainstay within the sports entertainment industry. By 2023, Americans had lost $10.9 billion in losing bets over the year. State policymakers and law enforcement are losing in a cat-and-mouse relationship with sports betting, struggling to keep up with issues such as the murky legality of offshore sportsbooks, marketing targeted toward underage bettors and racial minorities, and toothless safeguards against gambling addiction. Instead, they have turned their attention toward an easier target: bettors engaging in misconduct. One agent reported that the Iowa DCI’s geofencing sting was in part founded on unsubstantiated fears of bettor result tampering, while email records revealed that investigators hoped to gain publicity by targeting high-profile teams and players.
Iowa State athletes were penalized for their participation in sports gambling, yet universities strike up deals with sportsbooks without consequence. In 2021, Michigan State University entered into an $8.4 million contract with Caesars Sportsbook to promote gambling at the school—announcers would call out gambling promotional deals live at stadiums packed with students. Regulation could be better employed to address the growing practice of sportsbooks promoting themselves in partnership with universities, a blatant appeal to underage betting—the issue at the heart of the DCI’s brash and clumsy efforts.
In a growing handful of cases like these, bettor misconduct bears the brunt of scandal and punitive action while the gambling industry evades scrutiny. News broke in March that an account under Major League Baseball star Shohei Ohtani’s name had wired several million dollars to Matt Bowyer, the leader of an illegal sports betting operation. Public attention immediately became fascinated by how the quiet, mild-mannered Ohtani could be involved in such a crude affair. As parties scrambled for lawyers and crisis management teams, each twist and turn in the story was covered as a spectacle on the front pages of publications from The New York Times to ESPN.
Almost no attention, however, was paid to Bowyer’s illegal gambling operation, which employed sub-bookies or “agents” who execute bets on behalf of bettors to offshore sportsbooks and escape the law. Offshore sportsbooks licensed in unregulated tax haven countries like the Cayman Islands or Antigua offer their services to US customers, creating a legal gray zone. Some of the most popular sports betting sites like MyBookie, Bovada, and BetOnline fall into this category, bypassing US taxes and regulations that ensure responsible, fair betting. States have been inadequate in responding to offshore books, issuing fines and cease and desist letters that often only act as slaps on the wrist. At most, they ban the service locally while it proliferates elsewhere across the country.
The public appetite for scandal combined with the rampant proliferation of sports betting has become a behemoth that lawmakers and law enforcement struggle to wrangle. Today, this has led to the perp-walking of bettors rather than regulating sports betting and informing the public of its dangers. Compared to Ohtani’s wire transfers or an Iowa State student-athlete betting with their mom’s credit card, the fact that every dollar a household puts on a betting slip results in $2.13 less being put into their investment account prompts strikingly little public outrage. Sports betting’s growth has profited off and seeks to appeal to the most vulnerable—67 percent of US college students living on campus were surveyed to be bettors, while Black and Hispanic Americans bet at a higher rate than whites. Placing the misconduct of bettors as the main target of legal action and media attention demonstrates how the gambling industry causes financial instability among the most vulnerable while protecting itself. As an industry like tobacco or alcohol in its high risk to the public, sports gambling corporations, not bettors, need to be under strict regulatory scrutiny.