Over/Under: The Prop Betting Risk to the Integrity of U.S. Sports

The major professional sports leagues in the United States have weathered emerging challenges over many generations.  Major League Baseball (MLB) is 156 years old, the National Football League (NFL) is 105 years old, the National Hockey League is 107 years old, and the National Basketball Association is 79 years old. During their existence, each league had to address issues of gambling and some have endured betting scandals that affected the integrity of their respective sport. The “Black Sox” scandal in baseball^[1], and the more recent scandal involving former NBA referee, Tim Donaghy^[2] are two examples.

While these leagues have surpassed the average American lifespan, proposition betting, or ‘prop betting’ — a targeted bet concerning the occurrence or non-occurrence of a specific event during a sporting event — is fairly new in the United States, at least legally. Unlike traditional wagers focused on the final score or outcome, prop bets allow fans to place wagers on specific events within a game, such as which player will score first, how many points an individual player will make, how many penalties one team will accumulate in a game, or how many hitters a pitcher can strike out.  Prop bets allow people to bet on almost all aspects of a game, offering fans a layer of excitement that keeps them engaged throughout the match, regardless of the competitiveness of the overall game.

The landmark 2018 Supreme Court decision in Murphy v. NCAA^[3] paved the way for legalizing sports betting across the country, which has become wildly popular in many of the states that have legalized the practice. In 2024, the American Gaming Association reported $13.71 billion in revenue from sports betting alone.^[4] 

The swift expansion of sports betting has in some ways outpaced the ability of major sports leagues to anticipate and address the resulting integrity risks, such as players modifying their performance. Specific state and federal legislation must also play catch-up. That gap has prompted prosecutors to step in, often with new applications of traditional enforcement approaches for schemes that increasingly blur the lines between sports, information sharing, and match manipulation. 

This article explores how the shift of U.S. sports gambling from outcome-driven wagers to smaller, individual occurrence bets has led to recent indictments impacting both the NBA and MLB and examines the potential impact of prop betting on legislation, leagues, and commercial stakeholders.

Article Outline

• Evolution of Sports Gambling in the U.S.
  • The Murphy Decision
  • Variation in State-by-State Approach
  • The Rise of Prop Betting
• Integrity Threats Posed by Prop Betting
  • NBA Prop-Betting Scheme
  • MLB Prop-Betting Scheme
  • Prosecutorial Challenges
• Commercial and Political Responses
  • League Internal Measures
  • Congressional Scrutiny
  • Legislative Initiatives and Regulatory Oversight
• Broader Consequences