The Beauty of Bets: Wagers as Compensation for Professional Athletes

Abstract:     
Professional and amateur leagues prohibit athletic participants from wagering on the outcome of the games in which they play. Most also prohibit wagers on any aspect of the sport; some even prohibit wagers on any sporting contest. At the same time, these leagues typically allow teams to compensate players based on individual performance outcomes and team victories and championships. Certain non-league tournament sports, particularly professional golf, even allow players to bet on pre-tournament practice contests.

This paper outlines the advantages of allowing athletes to bet on their games. Betting aligns player incentives with team incentives, encourages team-oriented play, helps sustain fan interest, lessens the nominal costs of owning teams or ticket purchases, and reduces the likelihood that players will conspire to throw games or beat the point spread. In light of this advantages of betting, the widespread prohibition on participant gambling seems problematic.

Working Paper Series