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MLB is keeping a very close eye on gambling to protect the sport’s integrity

Published: April 23, 2018

Each night, Major League Baseball games unfold in stadiums across the country, nine innings at a time, pitch by pitch. An ocean away, a network of computers whir, tracking every swing of the bat — and, perhaps just as important, every placement of a bet.

This season MLB has contracted with a London-based company to monitor gambling on baseball, using analytics, algorithms and proprietary software to ensure that nothing untoward is taking place that could compromise the sport’s integrity. Baseball officials stress that the security measure wasn’t prompted by any incident or specific suspicion.

“We just think it’s a prudent thing to do in this day and age. That’s it,” said Dan Halem, MLB’s chief legal officer.

The firm, Genius Sports, sends regular reports via email that show baseball betting trends. Less than two months into the season, “knock on wood, we haven’t had any problems come up,” Halem said.

Baseball is a popular bet for sports gamblers. Last year, more than $897 million was wagered on baseball games in Nevada sports books alone, trailing only football ($1.7 billion) and basketball ($1.2 billion), according to the Nevada Gaming Control Board. While Nevada’s baseball betting numbers have nearly doubled in the past decade, gambling experts suspect millions and millions more are bet illegally each year.

With gamblers so invested in the on-field results, MLB officials have never been naive to the potential for corruption. When the league hired Bryan Seeley, a former assistant U.S. attorney, to head its investigative unit in 2014, the sport was knee-deep in the Biogenesis case but had a to-do list that included protecting the integrity of its game and minimizing the chance of fixed games or compromised competition.

“That kind of risk is enormous. It’s a good proactive value for us,” Halem said of the monitoring service. “Why wouldn’t we do that?”

MLB interviewed a handful of firms and settled on Genius Sports, a leader in the field that also has a contract with the English Premier League, among others. Terms of the deal have not been disclosed.

The firm essentially analyzes international betting markets in real time and identifies trends and anomalies. If a large amount of money is suddenly being bet on one particular outcome, red flags might be raised.

“It’s very akin to the financial market analysis,” said Mark Locke, chief executive of Genius Sports. “In financial markets, there are bodies that just watch the markets.”

The company’s computers and human analysts create a statistical portrait of each game, its mathematical probabilities and expected betting patterns.

“We know during that game, the shape of the graph should look a certain way,” Locke explained. “And then we’ll overlay what it is actually happening. A discrepancy can indicate one of two things: There’s general market disagreement, and it’s actually very innocent, or alternatively, something interesting has happened, and the sport may need to investigate.”

Genius Sports uses real-time betting information provided by sports books around the world. The company doesn’t reveal its entire client list, but it provides similar services to many international basketball and soccer leagues. It also offers products that aid sports books and lottery operators, but MLB officials are careful to point out they only pay for services that monitor sports integrity.

While NBA Commissioner Adam Silver has argued for legalizing sports gambling, baseball officials have been more cautious with their words. Baseball hasn’t changed its anti-gambling stance, and Rob Manfred, the MLB commissioner, said this week the ongoing debate over daily fantasy sports has “slowed those discussions.”

“There’s not a lot of buzz among the group internally,” he said. “I think we’re waiting to see how the daily fantasy issue works out from a regulatory perspective before we make any move.”

Locke said the company’s betting and monitoring services are closely linked but still independent.

“It’s not something we’re trying to hide or shy away from,” he said. “The two are very symbiotic. The data required to offer quality integrity services is the same data that you need to run the other side of our business.”

While MLB doesn’t necessarily receive real-time reports, the league will be notified the instant something nefarious or suspect emerges. Genius Sports will turn over the data, offer possible explanations and allow MLB to investigate the matter on its own. Oftentimes, Locke said, particularly for in-game betting, factors such as shifting weather forecasts or injury information can wildly swing betting action.

But when there’s no obvious explanation, Genius Sports wants to make sure the league has the information it needs to investigate whether gamblers are utilizing privileged inside information or just a lucky hunch.

“As with anything, the more information you have, the more you understand something,” Locke said. “That’s what this is really about: providing information so the sports can understand the environment they’re working in.”

Barry Svrluga contributed to this report.


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