Cigars, Colleges, Booze and Blitzes: Investigating the Sports Betting Boom

From a Times Insider column by Eric Lipton headlined “Cigars, Colleges, Booze and Blitzes: Investigating the Sports Betting Boom”:

The Kansas State Capitol is the state’s greatest architectural treasure, a towering temple of democracy. Taller than the United States Capitol, the 119-year-old building is filled with reminders of Kansas’ outsized role in United States history. A 2,000-pound statue of Dwight D. Eisenhower, the five-star general turned president and a Kansan, stands proudly in the rotunda.

When I visited the Capitol one April evening with Amir Hamja, a photographer, lawmakers were rushing through the limestone halls to leave before the business day ended. Where were they headed, we wondered?

We were in Topeka, Kan., as part of our monthslong investigative project about the growth of legal sports betting in the United States. Since the Supreme Court opened the door to legalize sports gambling in 2018, the industry has exploded. In the first half of this year, Americans placed nearly $50 billion worth of legal bets on sports, up from just $5 billion in the first half of 2020. We wanted to know: Why did the expansion happen so quickly? Who brought it about? What were the risks?

Four parts of this series, A Risky Wager, were published last week and provided the answers to some of these questions. Editors and nearly a dozen reporters from four parts of The Times — the Washington bureau, Sports, Investigations and Business — came together to work on the series.

Ken Vogel and I teamed up on this article, which examines the state-by-state lobbying blitz to legalize sports betting. In Missouri this year, 74 lobbyists were registered to work on the state’s sports-betting bill, which was being debated at the same time as the wrangling continued in Kansas.

Bringing this story to life meant moving into state capitols and standing for hours alongside lobbyists as they pressed lawmakers to tweak sports-betting bills.

Amir and I were in the rotunda when the lawmakers began to rush for the exits. They were headed, we learned, to downtown Topeka, where two sports-betting lobbyists were co-sponsoring an event they called Cigars, Cars & Bars. It was just two days before the Legislature was poised to vote on the state’s sports-betting bill.

We showed up at the event, finding tables loaded with drinks, cigars and trays of prime rib, corned beef and Atlantic salmon — all set up alongside a miniature museum of Porsches, Mercedes and other luxury and antique cars. The lobbyists and the lawmakers, it was obvious, were not just partners in passing laws. They were, in many cases, friends. And it showed — at the party and inside the Capitol.

The reporting in Kansas required detective work. One lawmaker, Speaker Ron Ryckman Jr., mentioned to his colleagues that a group of Kansas real-estate developers had asked him to add a provision setting aside 80 percent of future sports-betting tax revenues for a possible stadium. But he did not name the developers.

So we started to dig through his campaign contributions and found six donations, all on the same day for the maximum amount allowed under Kansas law, from companies that a prominent Kansas real estate developer owned. This same real estate developer, Robb Heineman, later confirmed to The Times that he had pushed for the stadium provision. Mystery solved.

Our investigation of the lobbying efforts in Kansas and other states was just one of the articles that made up the series.

Rebecca Ruiz conducted a survey of states with legal sports betting. Can customers use credit cards to bet? The answer was yes in a majority of places. Did regulators review and approve advertisements? Most did not. Had gambling companies gotten into legal trouble when they broke the rules? Not always, it turned out. State regulatory watchdogs were inconsistent in enforcing their own standards, and some had little appetite for punishing companies that broke the law. Rebecca, Ken and Joe Drape explored these questions in another article for the series.

Seeking to show the potential human consequences, Rebecca and Ken also talked to people in different parts of the country who had become addicted to sports betting after it became legal.

Our colleague Walt Bogdanich worked with a group of Columbia University journalism students to dig into deals that universities had signed with gambling companies to promote online sports betting on their campuses, including Michigan State University, the University of Colorado Boulder and Louisiana State University. When the universities refused to provide granular details on these lucrative partnerships, the reporting team used laws allowing public access to records to request copies of university documents, learning for the first time how deeply the gambling companies had burrowed into university life.

For another article, Emily Steel focused on one casino company, Penn Entertainment, and its partnership with David Portnoy, the founder of the media company Barstool Sports. Emily learned that even as Mr. Portnoy promoted gambling to his millions of followers, he rarely, if ever, mentioned that he had previously gone bankrupt after racking up debts and $30,000 in gambling losses.

Emily, too, sent a series of requests for public records. Among the thousands of pages of documents she received were details confirming how Penn executives had discussed their deal to take over Barstool with regulators. She also learned that in 12 of the 13 states where Barstool or Penn had been licensed, Mr. Portnoy — who has a history of misogynist and racist behavior — wasn’t required to undergo a formal licensing review, a process regulators use to ensure that gambling businesses operate with good character, honesty and integrity. He now reigns as one of the industry’s loudest cheerleaders.

Cigars, Cars & Bars wasn’t the only event Amir and I attended in Kansas that was backed in part by sports-betting lobbyists. We went to several, including one that featured a dish I had never previously encountered: Rocky Mountain oysters, which are made of deep-fried bull testicles. No, we did not taste them. But we did come away from these events with a better understanding of how the gambling industry took off in the United States.

Two days after Cigars, Cars & Bars, Kansas lawmakers passed the sports-betting bill. And in other states, the pitch is far from over.

Eric Lipton is a Washington-based investigative reporter for the Times. A three-time winner of the Pulitzer Prize, he previously worked at The Washington Post and The Hartford Courant.

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