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GREO BRIEF: SINGLE-EVENT AND PROPOSITION BETTING IN CANADA

TRAVIS SZTAINERT, PHD, KNOWLEDGE BROKER

SINGLE-EVENT BETTING

All operators in Canada work within the limitations of the Criminal Code of Canada (R.S.C. 1985), which addresses regulation and laws. The code states that local companies, both online and land-based, can only offer parlay-style bets (bets that involve more than one outcome). However, these laws do not prohibit online, offshore companies from offering single-event betting. These companies regularly accept Canadian users since there are currently no regulations that specifically prohibit them from accessing and betting on these sites. The Canadian Gaming Association estimates that Canadians spend around $10 billion per year on single-event betting alone.1 The Supreme Court in the has recently struck down a law prohibiting sports betting. With single sports betting now legal in the United States, there has been an increased call to allow single-event sports wagering in Canada too.2

Currently, there is little empirical evidence to guide policy decisions with regard to what the potential impact on revenue, criminal behaviour, or gambling-related harms would be if single- event sports betting was approved. Gambling proponents and industry argue that the ban on single-event sports betting in Canada fails in its goals to prohibit Canadians from accessing and placing bets on the outcome of a single event. They argue that the illegality does little to discourage gamblers from engaging in sports betting.3 The Canadian Gaming Association estimates that $4 billion is paid to off-shore operators, compared to only $500 million to official Canadian sports .4 This suggests that large amounts of potential revenue are being diverted to overseas operators at a loss to the Canadian economy. Consequently, gambling proponents and industry argue that there are a several benefits to legalizing and regulating single-event sports betting (see http://canadiangaming.ca/single-event-sports-betting-what- the-experts-think/), such as:

• Increased consumer protection by incorporating mandatory, responsible gambling requirements as part of licence agreements;

• Increased tax revenue and retention of gambling funds onshore; and,

1 • An architectural structure that permits more effective monitoring, detection, and prevention of illegal bets in the sports betting market.

On the other hand, continuing to prohibit single-event sports betting will prevent this potentially harmful form of gambling and help ensure that the government is not perceived to be sanctioning an expansion of sports betting. An additional motive to continue to prohibit single- event sports betting is the increased risk of compared to parlay (multi) betting. The reason is that only one outcome needs to be changed to alter the outcome of a single- event bet, whereas multiple events would need to be altered to manipulate the outcome of a parlay bet. From this perspective, the ban represents a key strategy to protect the integrity of sports. One again, however, gambling proponents and the industry argue that betting-related match-fixing is mainly an issue in countries where the betting market remains unregulated,5 and that regulation may allow governments (in collaboration with gambling operators and judicial agencies) to more closely monitor patterns of betting and detect aberrant or deviant patterns that could potentially signal match fixing.

Note that portions of this section are based on a GREO commissioned report, Single-event sports betting in Canada: Potential impacts.6 Please see this report for an overview of international sports betting regulation.

PROPOSITION BETTING

The definitions of sports betting and the activities that are encompassed are not clearly specified; some include , while others include bets on activities outside the sports domain. These are often referred to as proposition or ‘prop’ bets, but also go by novelty, unique, exotic, or side bets. Typically, these bets are made during a gambling or sports game, and the bets are based on events that do not directly affect the game’s outcome. Simply put, a proposition bet is a wager on something other than the winner or loser of a game. The most common types of proposition bets are centred on a player’s performance, for example, how many points or fouls a player might receive. Proposition bets have become increasingly unique. Other examples of sports-related proposition bets include the half-time performer’s outfit, or colour of the Gatorade poured on the winning coach’s head. Outside of sports, popular proposition bets now include events based on political events (e.g., outcomes of an election), popular entertainment (e.g., which reality TV star will win the show), or significant events and social occasions (e.g., winners of the Oscars, special guests at a royal wedding, etc.).

2 Proposition bets are increasingly common and popular.7 Forrest8 credits the increase in proposition betting as one of the main reasons for revived popularity in sports betting over the last decade. These bets have become so popular that the British Columbia Corporation (BCLC) offers regular novelty bets on anything from the United States election to royal weddings (see information about these type of ‘single’ bets at https://www.playnow.com/sports/about-single-event-betting/). You can find an up-to-date list of these bets at https://www.playnow.com/sports/novelty-betting/. The Ontario Lottery and Gaming Corporation (OLG) is also considering allowing similar novelty bets.9

Proposition bets can serve to ‘even the playing field’. Traditional sports betting requires specialized knowledge (of the game, players, historical performance, etc.), which causes information imbalances between those who offer bets (i.e., bookies, ) and those who make them. Proposition bets work to eliminate this information imbalance by offering bets on events where relevant/key information is not available or collected. Therefore, neither party has the upper hand (e.g., there are no algorithms available to predict whether a cheerleader will fall down during the half-time show). As a result, proposition bets tend to have greater payoff rates compared to other bet types.10 The higher return rates reflect the fact that operators are willing to lose money on these bets since they are intended to generate interest and discussion, and are non-serious bets provided for their interest and novelty value.10

No specialized knowledge is needed to make a proposition bet; betters negotiate the of an event occurring (or not occurring) with the bet maker. Thus, proposition bets have the ability to appeal to a wider audience than traditional sports betting. Proposition bets also appeal to traditional sports betters, as it provides a way for them to continue betting when their team is performing poorly (and, as such, they would not bet on the team to win). Proposition bets gained popularity during a string of blowout events during which bookmakers were looking for ways to keep people engaged and betting when the ultimate winner was all but predetermined.7 When creating a proposition bet, bookmakers aspire to create bets that appeal to the general public, are easy to follow, and keep people interested in the game.7

Given the mass appeal of these novelty bets, it’s worth investigating the effects they may have on gamblers. Unfortunately, very little research exists on novelty bets. The limited research so far suggests that:

• People may place bigger bets on non-sports-related proposition events compared to sports-related proposition bets10 which, in turn, could lead to bigger losses for gamblers.

• The ease of placing a bet accompanied with a limited time offer may encourage and entice gamblers (especially adolescents and problem gamblers) to make a novelty bet.11

• Proposition betting that occurs during live-action (i.e., the propositions are made on a next event occurring during a game, or live event) may be particularly problematic.12

3 • Proposition betting may be particularly susceptible to match-fixing (also called spot- fixing), where a person takes steps to ensure a certain result for a proposition bet.13

The mass appeal of proposition bets – coupled with the fact that they may be enticing to problem gamblers and adolescents – suggests they may be a particularly dangerous form of betting. Future research needs to examine (a) the appeal of proposition bets, (b) the demographics of proposition betters, (c) gambling behaviour of proposition betters, and (d) responsible gambling strategies targeted towards proposition betters.

For more information, contact the author ([email protected]) or [email protected]

REFERENCES

1. Canadian Gaming Association acknowledges major milestone to allow single-event sports wagering in Canada. Canadian Gaming Association [Internet], 2012 Mar 2 [cited 2018 Jul 5]. Available from: http://www.canadiangaming.ca/news-a-articles/104-canadian-gaming- association-acknowledges-major-milestone-to-allow-single-sevent-sports-wagering-in- canada.html

2. Jeanneret T. Niagara Fall mayor wants single sport betting in . 610CKTB Newstalk [Internet]. 2018 May 17 [cited 2018 Jul 5]. Available from: http://www.iheartradio.ca/610cktb/news/niagara-falls-mayor-wants-single-sports-betting- in-casinos-1.3825349

3. Football bets to total $95 billion this season [Internet]. American Gaming Association, 2015 Sep 9 [cited 2018 Jul 5]. Available from: https://www.americangaming.org/newsroom/press-releasess/football-bets-total-95-billion- season

4. Super bowl and sports betting: A multi-million dollar opportunity - But not in Canada [Internet]. Canadian Gaming Association, 2014 Jan 30 [cited 2018 Jul 5]. Available from: http://www.canadiangaming.ca/news-a-articles/131-super-bowl-and-sports-betting-a-multi- million-dollar-opportunity-but-not-in-canada.html

5. Sports betting: Commercial and integrity issues. Brussels, BE: European Gaming & Betting Association [Internet]; 2014 [cited 2018 Jul 5]. Available from: http://www.egba.eu/media/Sports-Betting-Report-FINAL.pdf

4 6. Hartmann M, Keen B, Dawczyk A, Blaszczynski A. Single-event sports betting in Canada: Potential impacts. Sydney, AU: The University of Sydney [Internet]; [cited 2018 Jul 5] 2016. Available from: http://www.greo.ca/Modules/EvidenceCentre/files/Hartmann%20et%20al%20(2016)_Singl e-event%20sports%20betting%20in%20Canada_Potential%20impacts.pdf

7. Woike D. Prop wagers for March Madness? You can bet on it. Los Angeles Times [Internet]. Mar 12, 2017 [cited 2018 Jul 5]. Available from: http://beta.latimes.com/sports/more/la-sp-ncaa-prop-bets-20170312-story.html

8. Forrest D. Betting and the integrity of sport. Sports Betting: Law and Policy. ASSER International Sports Law Series. Hague, AN: T. M. C. Asser Press; 2011. p. 14-26.

9. Ontario's gambling agency rolls the dice on novelty, online sports betting. CBC News [Internet]. Nov 27, 2017 [cited 2018 Jul 5]. Available from: http://www.cbc.ca/news/canada/windsor/ontario-s-gambling-agency-rolls-the-dice-on- novelty-online-sports-betting-1.4421030

10. Gainsbury SM, Russell A. Betting patterns for sports and races: A longitudinal analysis of online wagering in Australia. J Gambl Stud. 2015;31(1):17-32.

11. Hing N, Vitartas P, Lamont M. Promotion of gambling and live betting odds during televised sport: Influences on gambling participation and problem gambling. Queensland Department of Justice and Attorney-General; 2014 Feb 13.

12. LaPlante DA, Schumann A, LaBrie RA, Shaffer HJ. Population trends in internet sports gambling. Comput Human Behav. 2008;24(5):2399-414.

13. Van Rompuy B. The odds of match fixing - Facts & figures on the integrity risk of certain sports bets. SSRN Electronic Journal [Internet]. 2015 [cited 2018 Jul 5]. Available from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2555037

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