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NBA Betting Scandal – The Tim Donaghy Story

The National Basketball Association (NBA) is not only the best Basketball League in the world but also the most-watched and most popular betting proposition for lovers of the game. However, in 2005, a referee in the NBA needed money, not only to satisfy his needs but also those of his mafia-linked associates.

 It was then, in smoke-filled rooms and in between doing lines of cocaine, that he and his protagonists hatched plans to ensure that they would bet on teams in which he was the referee, and he would ensure that those teams would “Cover the Spread” in those games. 

Who was involved in the NBA Betting Scandal? In 2007 a betting controversy exploded in the National Basketball Association (NBA) amid allegations that NBA referee, Tim Donaghy, had wagered on professional basketball games using his knowledge of connections between officials, coaches, players, and owners. It was uncovered during FBI operation, ‘Flagrant Foul’, due to connections with the New York mob.

In July 2007, allegations of a Federal Bureau of Inquiry (FBI) investigation were made public, alleging that throughout the 2005–06 and 2006–07 NBA seasons, referee Tim Donaghy gambled on games in which he officiated. Donaghy pleaded guilty to two federal crimes relating to the inquiry on August 15, 2007, and was sentenced a year later to 15 months in prison and three years of supervised release.

The Preliminary Report

In 2007, The New York Post initially reported that the FBI was looking into reports that an NBA referee had wagered on games. When it was established that Donaghy was the referee under investigation, the story was quickly taken up by other major news outlets. According to the reports, Donaghy began betting on sports in 2005, and when combined with his ties to organized crime, and he manipulated games to ensure that the teams that were bet on “Covered the bookmakers’ Spread”.

What Exactly Does “Cover the Spread” Mean? When you hear the phrase “cover,” it refers to a short version meaning “cover the spread.” Covering the spread might imply winning by a given margin or losing by less than a certain amount, depending on whether you bet the favorite or underdog.

The “Spread” is the number of points by which a team is anticipated to win or lose. It is symbolized by a positive and negative number allocated to each side, generally in half-point increments. In the example below, a team with a score of -10.5 is projected to win by 10.5 points, while a team with a score of +10.5 is anticipated to lose by 10.5 points or more.

Raptors v Pistons – Spreads

Toronto Raptors (Spread -10.5)

Detroit Pistons (Spread +10.5)

The NBA commissioner, David Stern, stated the day after the initial reports that no amount of effort, time, or personnel was being spared to assist in this investigation and to bring to justice prevent this from happening again. On July 24, he attended a news conference to answer questions regarding the probe. Although he referred to the Donaghy case as “an isolated event,” he also said that it was the most severe scenario that has ever been encountered.

it was revealed that Donaghy’s high school friend and classmate had gambled on NBA games based on Donaghy’s advice. Donaghy then disclosed that he was paid $2,000 for each right selection based on the recommendations he provided.

Pleads guilty to betting on games he oversaw

Following the first claims, Donaghy remained at home until relocating to a safe place to evade media attention. On August 15, 2007, he surrendered and pleaded guilty to two criminal conspiracy counts. He also admitted that he used coded language to alert others about players’ medical conditions and player/referee relationships, and he particularly admitted to sharing information about games during the 2006–07 season. He was paid a total of $30,000 to provide inside information to the bookmakers. Donaghy also claimed to have a significant gambling problem. He was freed after posting a $250,000 bail.

Tim Donaghy Sentencing

Donaghy was sentenced to 15 months in jail and three years of supervised release on July 29, 2008. Despite his lawyer’s request for probation, Donaghy recognized that he had “disgraced myself, my family, and the profession.”

Tim Donaghy Sentencing – Media Reaction

Several writers predicted that the news would harm the NBA’s popularity immediately after it was announced. R. J. Bell, the owner of the sports betting information website, recorded every game Donaghy worked on from 2003 to 2007. He observed that throughout the two NBA seasons studied, the teams involved scored more points than the Las Vegas bookmakers predicted 57% of the time. This occurred just 44% of the time in the prior two seasons. According to Bell, the chances of such a disparity are extremely small and would not have happened without an “outside influence”. 

He also discovered ten consecutive games in 2007 in which Donaghy pushed the game to the point that the point spread shifted 1.5 points or more before the start of the game which is an indicator that considerable money had been placed on the game. Every time, the big money triumphed. However, Bell indicated that no one who wasn’t in on the scheme could have suspected anything was wrong with Donaghy’s conduct during a game; he estimated that it would have taken another year at the very least for anyone to connect the dots.

Despite Stern’s assurance that Donaghy was a “rogue official,” handicapper Brandon Lang told ESPN that it is quite simple for a fraudulent sports official to manipulate a game. According to Lang, if an official has money on the game, he may directly affect the result 75% of the time. 

Lang, for example, said that a dishonest NBA referee may rig the final score by calling enough fouls to put both teams in the bonus. Lang believes that when a game is rigged, the referees should be the major suspects since the players make too much money to lose their careers. 

Tim Donaghy Sentencing – Changes to the Referee Conduct 

As a consequence of the betting incident, Stern amended NBA referee conduct standards during the 2007 Board of Governors meeting. Despite the referees’ labour agreement, which prohibited them from partaking in practically all types of gambling. 

The NBA had learned harsh lessons from this scandal and has put measures in place as well as to ensure that nothing like this happens again. Since then, the NBA has not encountered another betting such as the one that Tim Donaghy orchestrated in those seedy backroom bars in 2005.