I’m not exactly philosophically aligned with Dr. Harry Levant — one of the driving forces behind the federal SAFE Bet Act — when it comes to micromanaging potential problem gamblers. But Levant and I are on the same page with regard to a different compound word beginning with “micro”: microbetting.
Levant has, on numerous occasions, publicly pointed to the dangers of allowing sports bettors to keep finding new action every few seconds. “We’re not just betting on who wins the big game,” he said in a recent Ethos Treatment article. “Now, every pitch, every point — every micro-event of every game — is a betting opportunity.”
Certainly, the potential for problem gambling exists with pre-game betting, too. But I agree with Levant that the ability to wager throughout a game — generally known as “live betting” or, the inspiration for the name of this website, “in-game betting” — increases the risk. And I concur with him that microbetting — the most hyperactive form of in-game betting — can, in the wrong user’s hands, take it to the next level.
Well now, aside from any concerns Levant or anyone else may have regarding gambling addiction, there’s a new worry to consider with microbetting.
As exemplified by the Luis Ortiz investigation that broke last Thursday, microbetting presents possible threats to the integrity of the competition that didn’t exist in previous, less technology-equipped eras.
Balls and strikes
Ortiz, a starting pitcher for the Cleveland Guardians, was placed on “non-disciplinary paid leave” last week as Major League Baseball began to investigate him. According to ESPN.com’s reporting, betting integrity firm IC360 raised red flags with regard to two specific pitches Ortiz threw last month. (InGame reached out to IC360 Monday morning for further information but did not receive a response.)
On June 15, against the Seattle Mariners, Ortiz’s first pitch of the second inning was a slider, low and outside. Two starts later, on June 27 against the St. Louis Cardinals, Ortiz’s first pitch of the third inning was another slider, this time so low and so outside that it bounced in the dirt and skipped past the catcher:
The wagers in question were reportedly on each of those two particular pitches to be either a ball or a hit-by-pitch, with bets flagged at regulated sportsbooks in three states: Ohio, New York, and New Jersey.
And that’s about all we know at this time. We were hoping to get information from IC360 about the size of the bets or which operator(s) took the bets, but given that the investigation is ongoing, it was always going to be a longshot to acquire that information from the organization.
Ortiz is, of course, innocent until proven guilty. The first pitch was inaccurate, but not unusually so. The second was far worse, but is by no means the wildest wild pitch ever thrown. The timing of those lousy pitches to allegedly align with unusual gambling activity is … well, yeah, “innocent until proven guilty,” but it looks damning.
And, if Ortiz was indeed intentionally throwing an individual errant pitch to help someone win a wager, it emphasizes what an integrity risk microbetting can be.
Throwing a single intentional ball is both an act that a lone rogue actor can perform (unless the batter screws it up by taking an unimaginably bad swing) and one that can be executed without significantly impacting your team’s chances of winning. (Not to mention, some sportsbooks offer markets not only on the outcome of the pitch but also on the speed or type of pitch.)
If bettors could only wager on the outcome of a full game, an athlete would have to commit a high number of poor plays to increase the chances of a winning wager — and even then a lone pitcher couldn’t assure anything. If a starting pitcher intentionally tanks — say, by giving up five runs in the first inning — there’s a chance he gets pulled, after which he can no longer impact the game and his team may come back to win.
In this regard, it would seem microbetting makes manipulation much, much easier.
‘Harder to bury the cheat’
That isn’t necessarily the case, though, according to Tomash Devenishek, founder and CEO of microbetting technology company Kero. Or at the very least, even if attempting manipulation is easier, getting away with it is not, Devenishek explained to InGame, citing three reasons:
- 1. Cleaner signal, less noise: “Micro markets resolve quickly and often, making it easier to detect anomalies,” Devenishek said. “It’s harder to ‘bury’ the cheat.”
- 2. A shorter window for coordination: “Player props or traditional markets often sit open for days. Micro markets open and close in seconds, so coordinating a fix between athlete behavior, market availability, and bet placement becomes logistically harder.”
- 3. Too much quant muscle on the other side: “Companies like Kero operate more like high-frequency trading desks than ‘trader-reliant’ sportsbooks, i.e., our tools and infrastructure is built around real-time algorithms and anomaly detection.”
Devenishek continued: “With the level of quantitative scrutiny we apply to every outcome and every bet, it’s simply not a great idea to try and cheat. Because there’s cleaner signal and less noise, the data speaks loudly — and we’re built to listen.
“In short, micro markets aren’t immune, but they’re often more resilient than longer-duration bets when it comes to detection and auditing.”
All of those points make sense, although I’m inclined to poke holes in the “shorter window” argument as it pertains to the Ortiz case. Because the pitches in question were, both times, the first pitch of an inning, that left a reasonable time frame for a coordinated effort to be executed. If the plan is agreed upon in advance — “Hey, bub, make sure the first pitch of the second inning is way out of the strike zone” — that means the entire two-minute TV commercial break (plus maybe a few seconds before and after) can be used for bettors to get their “ball or hit by pitch” wagers in.
Pros and cons
Along the lines of what Devenishek said, the first point many in the industry make when a scandal such as this alleged one with Ortiz come to light is that regulation is to thank for the athlete getting caught. Here’s an example of The Ringer’s Raheem Palmer making that case a few days before the Ortiz investigation became public, in reaction to NBA player Malik Beasley being investigated in conjunction with atypical wagering activity:
While there’s much truth to Palmer’s point, that regulation catches these instances that would likely never be detected if people were only using unregulated offshore sites, ESPN’s David Payne Purdum raised an important counterpoint — and a prescient one, given that the Ortiz investigation hadn’t come to light yet:
There’s definitely some “damned if you do, damned if you don’t” to this. Yes, regulated microbetting markets open up new avenues by which to compromise competitions. But if U.S. regulators were to ban microbetting, there would still be the same threat of manipulation via black-market sites.
In other words, if Ortiz did what he’s suspected of doing, (a) access to regulated microbetting arguably made it more likely to happen, but (b) it might have happened anyway at an offshore sportsbook, and (c) at least regulation led to its detection.
There are no easy answers here. There simply is the reality the Ortiz investigation presents that microbetting offers additional ways for gambling on games to become problematic.
Big scandal, small stakes?
One important note here is that limits on microbets are usually quite modest. Kero is partnered globally with numerous operators, and though the limits vary and are “managed at the individual player level most of the time by each respective brand,” Devenishek said the limit is usually around $200 for an individual wager.
That’s highly impactful from an integrity perspective. If indeed Ortiz coordinated with bettors to throw a bad pitch, at a $200-per-bet cap, he would have needed five people all placing the same bet just to earn $1,000 (minus vig) for the crew — which is not great incentive to engage in such a risky scheme.
If it’s a larger crew — say, 50 people placing the same bet to produce a little over $9,000 at -110 odds — is it any wonder a company like IC360 can spot it?
And if a particular bettor is able to get special treatment and have their microbetting limits lifted, well, a bet of, say, $5,000 on a “next pitch” market typically capped at $200 is going to make eyeballs bug out all by itself.
Devenishek noted the average microbet size across Kero’s partners in $12-$15. Most customers, it would seem, are recreational about their microbetting.
So, will the Ortiz case prove to be a massive outlier? It has highlighted the ways in which microbetting markets can be manipulated, but the high-profile investigation also may scare most other microbetting-related schemes straight.
This is one instance that shows the dangers of microbetting but, at the same time, may conveniently serve to limit those very dangers going forward.
