Baseball’s sign-stealing scandal threatens to get in the way of the new and still strange-bedfellow embrace Major League Baseball has made with sports betting.
A class-action lawsuit filed last week by a Massachusetts resident in US District Court against Major League Baseball, the Red Sox, and the Astros seeks to recover damages sustained by DraftKings fantasy sports participants who did not realize they were wagering on Astros and Red Sox games in which players may have been cheating.
Coming at a moment when MLB has voiced enthusiastic support of legal sports betting, the lawsuit is likely to compound the substantial damage already inflicted to the integrity of the sport by the scandal, which was exposed by The Athletic last November.
Kris Olson, a 49-year-old Massachusetts resident who grew up on the North Shore and is a reporter for Massachusetts Lawyers Weekly, is the sole named plaintiff seeking restitution for himself and on behalf of other DraftKings participants for unnamed financial damages sustained in entry fees and lost prize money from games wagered since the beginning of the 2017 season.
The “Astros’ Trash Can Scheme and Replay room Scheme and the Red Sox’ Replay Room Scheme compromised the integrity of DraftKings’ Major League Baseball’s daily fantasy sports wagering contests in 2017, 2018 and 2019,” the lawsuit maintains. “Untold numbers of hits, walks, runs, and wins were dishonestly obtained and awarded to the Astros and Red Sox that would not have taken place but for the Astros’ and the Red Sox players’ impermissibly-gained advanced knowledge of pitches.”
The suit maintains that MLB failed, intentionally, to enforce its rules and disclose the wrongdoing, in part because it has a business relationship with DraftKings.
Olson would not comment on the lawsuit but the lead lawyer, David Golub, spelled out its rationale.
“What the electronic sign stealing did was essentially corrupt all of the player-performance statistics,” said Golub. “You had MLB, the Astros, and the Red Sox, at the same time they were saying to the fans ‘bet your money on fantasy baseball,’ they were either deliberately corrupting the statistics or not taking steps to prevent the corruption of the statistics.”
MLB completed its investigation into the Astros this month and announced sanctions against the team for systematic sign-stealing using electronic devices during the 2017 season.
MLB has yet to announce the results of its investigation into the Red Sox, who according to The Athletic, used a similar system during the 2018 season.
“The original Athletic article turned out to be completely accurate,” said Golub. “The second article, which started talking about the Red Sox, is written by two very reliable, well-known reporters who had sources inside the Red Sox. Unlike [ex-Astro] Mike Fiers, they didn’t name the sources.
“And if it turns out that the Red Sox didn’t do it, then we’ll reevaluate the claim against the Red Sox. But it’s Alex Cora going from the Astros to the Red Sox and substantial claims about the use of the replay room that year.”
Golub said that MLB bears the most responsibility for maintaining the game’s integrity.
Efforts to reach MLB officials for comment on the lawsuit were unsuccessful.
The Red Sox declined comment, citing a policy of not commenting on pending litigation.
A DraftKings spokesperson said only, “We’re aware of the suit and reviewing the situation.”
Ever since the Supreme Court allowed states to legalize sports betting in May of 2018, MLB has been going ahead with partnerships and associations with gaming industry leaders such as DraftKings and MGM Resorts in an effort to gain more revenue and push away illegal betting.
The sign-stealing scandal demonstrated that MLB could not keep its own employees from cheating. As a result, the league now faces the steep challenge of assuring the betting public that its games are on the up-and-up.
“One of the ironies here is that you were always worried that some bookie or some underworld figure was going to get somebody to fix a game and they’d make a killing that way,” said Rich McGowan, a professor and gambling expert at Boston College’s Carroll School of Management. “It’s ironic that what you’re really worried about is athletes trying to cheat to win, and that does have an effect on sports betting.
“It’s a little bit of the opposite — it’s the athletes who are cheating, but if MLB and all the other leagues don’t police the integrity of the game, then you’re going to have all kinds of problems with sports betting.”
Before the lawsuit was filed, Chris Grove, a gambling industry analyst at Eilers & Krejcik, was asked if the sign-stealing scandal would make a casual or professional sports bettor think twice about wagering on baseball games.
“Absolutely, especially if we’ve yet to hear the whole story,” said Grove.
In lobbying for legal sports betting, MLB and other professional sports leagues have asked state legislatures — without any success so far — to tack on “integrity fees” from revenue to pay the leagues in order to combat bad actors.
The scandal roiling throughout MLB does the league no favors when it comes to its advocacy to promote integrity.
“Legal sports betting doesn’t create any additional threat to integrity, so it doesn’t require any additional resources on the part of the leagues,” said Grove. “Illegal sports betting is the source of the threat, and has been ubiquitous in the US for over a century. Anything the leagues need to do to guard against threats posed by betting on games should have been done a long, long time ago.”