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Online Only -- 01.22.01
A Gambling Gambit
Given the healthy distance that the NFL and NCAA try to maintain from the world of sports wagering, perhaps they should be concerned that CBS -- which will broadcast this year's Super Bowl and men's college basketball championships -- recently established partial ownership of the leading sports oddsmaker in Las Vegas.
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Sportsline and partner CBS are again linked to sports gambling. |
Winter is high season for sports betting. Americans wager upwards of $80 billion a year -- legally and illegally -- on sporting events, according to a government study, and two of the year's biggest betting draws occur within weeks of each other: the Super Bowl, in late January, and the National Collegiate Athletic Association men's basketball tournament, in March. Both the NFL and the NCAA are acutely aware of the potential threat gambling poses -- point-shaving scandals can damage a league's credibility for years -- and they avoid any association with sports betting. The leagues ask their broadcast and other media partners to avoid sports-gambling ties, and have in the past successfully pressured them to drop betting-related advertising. But it's difficult for the leagues to police sports betting in an age of corporate conglomeration and the Internet: Brill's Content has learned that CBS, exclusive broadcaster this year of both the Super Bowl and the NCAA basketball tournament, has recently established partial ownership of the leading sports oddsmaker in Las Vegas.
CBS's stake in a major Las Vegas sports-betting institution is obscured by a complicated business structure: CBS owns a 19.8 percent stake in SportsLine.com, the second most popular sports-news site on the Internet, according to Media Metrix ratings. The partnership began in 1997. According to the terms, SportsLine brands the site as CBS SportsLine, which is advertised on CBS and makes use of CBS Sports content. CBS, in turn, receives an annual payment of SportsLine stock and a share of the site's advertising revenues. Starting next year, that annual stock payment will be worth $20 million.
Last April, in a transaction that has gone unreported in the press and mostly unnoticed by the sports leagues, SportsLine subsidiary Vegas Insider purchased a company called Las Vegas Sports Consultants for about $7 million. LVSC, founded by renowned Vegas oddsmaker Michael "Roxy" Roxborough, sets the odds and point spreads used by three-quarters of Las Vegas casinos for betting on all professional and college sports. Neither CBS nor SportsLine ever announced the purchase.
SportsLine and CBS have reason to keep quiet about their recent connection to oddsmaking: They have a troubled history with sports betting. In 1999, an ESPN report revealed that SportsLine was leasing an Internet address to an offshore gambling website called Sportsbook.com. The NCAA complained, and SportsLine canceled the arrangement. An embarrassed CBS, which has a $6.2 billion, multiyear contract to televise NCAA games, issued a statement that anchor Greg Gumbel read to a national audience during the college basketball championships: "CBS was unaware of SportsLine's connection to Sportsbook, and the network was very concerned and took immediate action."
By purchasing LVSC, SportsLine and partner CBS are again linked to sports gambling, since the oddsmaking company's revenues come from the casinos that pay for its proprietary gambling information. LVSC gives its customers up-to-the-minute odds, player- injury updates, weather reports, and scores via Internet, satellite, cable, or radio. (The bulk of illegal sports betting, too, depends on LVSC odds, which are published in newspapers across the country.)
Asked about the CBS-LVSC connection, the NCAA's Bill Saum -- who is in charge of the league's gambling policies -- said he was unaware of CBS's partial ownership of the oddsmaking company: "It's new information to me." NCAA spokesperson Jane Jankowski, also unaware of the connection, expressed concern: "We wish CBS SportsLine wouldn't do that, and it is something we will bring up with them." NFL spokesman Greg Aiello says: "It would be fair to say it's a concern and something that we're watching."
CBS spokeswoman LeslieAnne Wade says the network by contract "does not share in any revenues with Vegas Insider," the SportsLine subsidiary that bought LVSC. Strictly speaking, this is true: CBS receives a portion of SportsLine's advertising revenues but no direct revenue from the company's gambling-related subsidiaries. But according to SportsLine's 2000 annual report, CBS is due to receive SportsLine stock valued at $20 million every year between 2002 and 2006, when their contract is set to expire. (The amount of stock CBS receives varies depending on the price of SportsLine stock at the time of each annual payment.) The value of that SportsLine stock is affected by the performance of the entire company, including its gambling information service LVSC.
SportsLine CEO Michael Levy says his company is in the "information business," not the "gambling business," and that in any case, there are no Internet links between CBS SportsLine and his company's odds-related subsidiaries. As to the millions of dollars in SportsLine stock CBS receives every year, he adds, "That's kind of an indirect thing."
SportsLine spokesman Larry Wahl says he has not heard any objections from any of the sports leagues or from CBS. Sean McManus, head of CBS Sports, and Russell Pillar, head of Viacom Interactive, which oversees CBS's online business, did not return calls for comment. Both are members of SportsLine's board of directors. "The separation of the businesses is probably satisfactory [to CBS]," says Wahl.
No one at LVSC would comment on the oddsmaking company's affiliation with CBS, but in 1998 Russ Culver, chief oddsmaker for Vegas Insider, the SportsLine subsidiary, addressed the TV network's uncomfortable relationship with gambling: "I'm affiliated with CBS SportsLine, although they don't advertise that," he told a writer for the Minneapolis Star Tribune. "The networks realize how important wagering is to the popularity of the NFL, but they want to act like they aren't promoting that angle." 
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