Colbert Arrest Highlights Hypocrisy of Prohibition

The arrest last week of 25 people—including Cantor Gaming’s sports book manager Mike Colbert—in a national sports betting bust triggered a firestorm of commentary, most of it focused on the calamitous effect Colbert’s arrest would have on a range of issues, from Cantor’s future in Nevada to the pending efforts to legalize sports betting in New Jersey (and, ultimately, other states). Certainly, the arrest of a major figure in a major Nevada sports betting company on a gaming-related charge is a black eye for the industry, but I don’t believe it’s the game-changer that others seem to think it is. Here’s why.

First, Colbert is innocent until proven guilty. That’s something that some of those writing about the arrest seem to forget. Being asked to comment on the impact of the case if Colbert is found guilty before he’s even been arraigned, let alone before the details of the case are public knowledge, is frustrating. The charges against him, which include money laundering, conspiracy and enterprise corruption, aren’t trivial, and I don’t want to make light of them. But without even knowing the details of his case, I can speculate about a range of outcomes that would make the final verdict an inconclusive one for Nevada sports betting: Colbert’s attorneys could succeed in having the charges dismissed on a technicality; he could plead to a lesser charge; the prosecution could prove in court that he had an instrumental role in an illegal sports betting operation, and the jury could refuse to convict. At this stage of the game, it’s more than premature to try to predict the final score; it’s just about impossible.

On the other hand, this case could have major ramifications for Nevada and the future of national legal sports betting, depending on a number of “ifs:” if Colbert was working on behalf of others at Cantor; if Cantor was institutionally involved; if Nevada sports bettors were somehow hurt by the operation.  But I don’t see a straight line between the information released in the Queens DA’s indictment and any of those outcomes, so I’m not one of those who sees the sky falling in just yet.

Second, let’s look at what the indictment charges: running a sophisticated illegal sports betting operation. The press release announcing the arrests makes this sound like a very, very sinister thing. Most of us got at least a little squicked out by talk of “agents,” and “money collectors,” which sounds like something out of The Sopranos. Indeed, Queens District Attorney Richard Brown emphasized that this wasn’t a “victimless” crime. Money made from illegal sports betting, he said, “are often—and easily—diverted to more insidious criminal enterprises.” Also, he reminded us that illegal bookies “often use threats, intimidation, and even physical force” to collect debts.

Yeah, that sounds scary. But rhetorically, it’s a blank check: no evidence has been presented that anyone involved with this, least of all Colbert, did so much as look sideways at a bettor who was late in squaring up. It’s not even guilt by association: it’s guilt by potential association. It may be that allegations of something more brutal will come out in the trial, but the fact that the DA chose not to mention anything nefarious captured in the 18-month investigation suggests to me that, perhaps, there isn’t much there. After all, district attorneys often include the most damning details of an indictment when they announce it.

Third, I think it’s important to point out that there are no allegations (again, yet), that this illegal betting ring did anything but take bets from bettors, pay them when they won, and collect their money when they lost. There are no charges that bettors were cheated out of money that they’d rightfully won, or that the bookmakers exerted any corrupting influence on the sporting events themselves. If the Queens DA’s announcement lays out the entire case against the accused, and the details of
the case don’t turn up anything relating to cheating bettors or influencing games, this seems to be a simple case of illegal bookmakers getting arrested for doing in New York, New Jersey, Pennsylvania and California what they would have paid taxes for had they done it as managers of licensed Nevada sports books. Obviously, illegal sports betting has a great potential to do real harm—as DA Brown pointed out, it can be a gateway to all sorts of nefarious behavior. But at some point we have to ask ourselves: Why is sports betting illegal in the first place?

Personally, I don’t have a horse in this race. I could go the rest of my life without betting on sports and not miss out, but it doesn’t bother me that other people enjoy doing so. And I wonder why lawmakers insist it’s OK to bet straight-up on football games in Nevada, but only on parlays in Delaware. What’s the moral distinction there? Or that it’s permissible to bet on horses at OTB locations in New York, and play video lottery terminals there, but not bet $20 on the Giants to beat the
spread. Again, is there a compelling legal or ethical reason for this, or is it just because it benefits the status quo? After all, it’s a lot easier for the state to make a steady profit from lotteries than sports betting.

That’s why I think that the ultimate outcome of this case might be a closer look at why sports betting remains illegal despite the proliferation of betting on everything from greyhound racing to lottery scratchers over the past half-century. I’m going to close with a supposition of my own: if we accept that legal sports betting can be run without endangering the integrity of the games (and can indeed stoke interest in them), without harm to bettors, and in a way that generates needed income for states, maybe it’s time to reconsider prohibition.