Monday, August 20, 2007

When worlds collide – David Stern, Tim Donaghy and Viva Las Vegas

Tuesday, July 24 represented a defining moment for National Basketball Association commissioner David Stern. Days after the New York Post broke the news that NBA official Tim Donaghy was directly tied to betting on NBA games and providing information to people interested in betting on NBA games. When Stern met with the media on July 24 he painstakingly clear, Donaghy was “a rogue criminal who acted alone” and the NBA had an no nonsense policy when it came to officials and gambling – betting of any kind to be exact. Monday a USA Today report suggested more NBA officials may have broken NBA rules and regulations regarding officials gambling and where NBA officials aren’t supposed to be.

David Stern spelled out in no uncertain terms, betting isn’t tolerated by the NBA, the NBA had plenty of safeguards in place and any gambling or betting are fireable offences by the NBA.

“We do subject our referees to extensive security checks, to the limit provided by the law. That is to say, with their authorization each year for the past two years, we have conducted personal background checks that cover credit, bank account, litigation, civil and criminal, assets including real property, debt, you name it; if it's legal to have it, we do it. The agency that we use for that is the Arkin Group, and under the guidance of the former head of worldwide operations for the CIA.

Taken directly from the transcript the NBA provided the media on July these are a series of questions and answers David Stern was asked relating to the NBA’s rules and regulations regarding gambling and NBA officials.

Q: Two quick things. One, is it illegal to bet on it's not illegal for your employees, they are not allowed to bet on NBA games or they are not allowed to gamble the slot machines, cards, betting on NFL games?

Stern: The prohibition is on all forms of gambling.

Q: Slot machines included?
Stern: Slot machines included. If you want to go to the racetrack in the summertime, you get a pass, that's it.

Q: You mentioned that referees are allowed to bet at the racetrack in the off season. Isn't that the same kind of place where you can get into the same kind of gambling problem or debt as other forms? Why is that an exception?
Stern: Because it was bargained for by the union against a since we had the most far reaching prohibition, I think of any sport, which prohibited them being in casinos, that we said, okay, if you're a summer day at the racetrack is okay, out of season.

A report Friday on 1050 ESPN Radio in New York said Donaghy will give prosecutors as many as 20 names of other NBA officials and will detail their involvement in some form of gambling activity. The specifics of the gambling allegations are reportedly believed to include betting in casinos.

"As far as we know, the misconduct was isolated to one individual, and we'll stand by that until proven otherwise," National Basketball Referees Association director Lamell McMorris told's Chris Sheridan. "We'll review whatever information Tim Donaghy alleges, but as far as we're concerned, the only person whose conduct has been proven wrong is Tim Donaghy. We're dealing with truth, not hearsay, and the truth is that the only person who has pleaded guilty to any kind of wrongdoing is Tim Donaghy."
Stern’s comments aside, according to a USA Today report: none of the activities of the other referees appeared to be criminal.

But their activities may be in violation of NBA regulations, which severely restrict wagering by referees and other personnel. None of the activities by the other referees involved wagering on basketball, the official said.

Former referee Mike Mathis says it wouldn't surprise him if referees were involved in football pools and the like.

However, Mathis told the USA Today he doesn't believe other referees bet on games as Donaghy did. Mathis, an NBA official for 26 years and a member of the National Basketball Referees Association executive board, retired five years ago.

"Like anybody else, refs play in fantasy football pools and things like that," Mathis said. "I'd be surprised if others are involved in what (Donaghy) did."

"I'd hate to be one of (those) guys," Mathis told the USA Today. "The league would say these guys did X, Y, Z. … Right away, the public is going to say, 'Ah ha, that's what Tim did.' It gives credence to all those who think games were fixed and conspiracy theorists."

If that were to be proven true according to the policies and procedures David Stern outlined to a national audience on July 24 the NBA would be in a position to fire the 20 officials.

Coming close to the start of NBA training camps (two months from now) Stern and the NBA are faced with a classic Catch 22 situation – how can they not fire the 20 officials, how can they start an NBA season in a few months with the loss of so many NBA officials. And those questions only deal with the direct impact of the officials if indeed Donaghy’s reported allegations are proven to be true. If the allegations are correct what does it say about the ship David Stern is captain of? What does it say about the NBA’s monitoring polices? What does it say about the people the NBA hired and put in place to ensure what is being alleged never took place?

“Somebody suggested that he (Donaghy) had gambled at the Borgata Hotel in Atlantic City, at either the gaming tables or card games, I can't remember which one. There's no sports betting in Atlantic City.

“He had denied that he did that. We checked not only the Borgata, but every casino in Atlantic City and in Las Vegas to determine whether he had any presence in any of those places, and all of our investigation came up negative.”

And how has the NBA reacted to the ESPN New York radio report?

“We haven't received any additional information and have no comment," NBA spokesman Tim Frank said Saturday.

In Las Vegas getting ready for the start of basketball’s Tournament of the America’s Wednesday, several members of Team USA talked about gambling (in Las Vegas) and being a professional basketball player in a Los Angeles Times report.

"A little blackjack, that's about it," Chauncey Billups said.

"We know our limits. We know right from wrong, what we can do and we can't do," Carmelo Anthony said after a scrimmage in a sweaty high school gym a few miles from the Strip.

While Las Vegas (and all) casinos are out of bounds for NBA officials the same rules aren’t in place for the players. The NBA’s collective bargaining agreement permits players to gamble in casino’s but NBA players are not allowed near Las Vegas legal sports books and are not allowed to bet on sports events.

"They know and they don't come in here," said John Avello, who heads the sports book operation at the Wynn hotel-casino, where many members of the USA Basketball team are staying. "For the most part they know that to be in a sports book, to even think about wagering on a game, is off limits."

And Kobe Bryant made it clear to the Los Angeles Times – Tim Donaghy is not at the forefront of the “Dream Team’s” preparation for the Tournament of the America’s.

"Honestly, I don't think anybody's thinking about it," Bryant said. "Us players, we haven't discussed it. It's not something that's on the radar for us. We know that the commissioner and the league and whoever else is handling the situation, they're going to take care of it, so we don't have much to worry about."

The location of the Tournament of the America’s is going to be problematic for the NBA. Kobe Bryant’s comments aside, the Tim Donaghy story was going to be front and center wherever the ten day event was being held. The event being contested in the known center of the gambling universe promises to create a media circus over the next two weeks. David Stern can try and spin this story however he wants, but at the end of the day he’ll be forced to deal with the nagging Donaghy related issues everyday.

And what of Stern? If the ESPN New York story is true, how could so many NBA officials have violated the NBA’s referees policy and have risked their careers for an opportunity to visit a casino? As tough as it would be for the NBA to fire nearly half their officiating staff, if the allegations ESPN New York are suggesting are true, David Stern has no choice but to rebuild the NBA’s officiating staff from the ground up.

“Anything that can legally be done has been done,” the NBA commissioner said on Dan Patrick’s ESPN radio show last week.

“The best-case scenario is that this is a wake-up call to us, in that you can’t get complacent about your process,” said Stern. “We’re going to do this ongoing review, and many pro sports leagues are saying that this is a wake-up call for them, too.”

There have been suggestions Donaghy began betting on NBA games as far back as 2003. Stern made it clear at the July 24 press conference the NBA had investigated Donaghy has far back as 2005.

“With respect to Mr. Donaghy, in 19 in January of 2005, it came to the NBA's attention that he was involved in disputes with his neighbor which resulted in the filing of litigation in or about West Chester, Pennsylvania, where he resided.

“We hired an investigator to look into that through our security office, and looked at the allegations in the complaint. It had to do strictly with a dispute, and we had occasion to call Mr. Donaghy in where he informed us in January of 2005 that we he informed us that the allegations against him were untrue, and that he was the person that was being harassed by his neighbor, not as alleged by the neighbor, that he was harassing the neighbor.

“At that time, and as part of that investigation, there was an allegation made by two of our investigators on the ground, which by that time we had retained the Arkin Group to continue the investigation. Somebody suggested that he had gambled at the Borgata Hotel in Atlantic City, at either the gaming tables or card games, I can't remember which one. There's no sports betting in Atlantic City.

“We had denied that he did that. We checked not only the Borgata, but every casino in Atlantic City and in Las Vegas to determine whether he had any presence in any of those places, and all of our investigation came up negative.”

If the NBA provides David Stern and the NBA with definitive proof Donaghy had bet in any casino (forget about the Armageddon suggestion it may extend to 20 other officials) David Stern has to fire his entire security staff and investigation unit. If the charges are proven to be true the complete incompetence of the people and companies Stern had entrusted with the responsibility of preventing the kind of disaster from taking place have to be held accountable.

As for the NBA and the long-ranging impact on the sport – consider this? Five and a half years ago on the eve of the 2002 Salt Lake Olympic Games if anyone had suggested the World Figure Skating Championships wouldn’t have an over-the-air or cable television partner would be called a fool. Five and a half years later you might find figure skating events somewhere on the Internet, but you’re not going to find figure skating, let alone the world’s premier skating event on American or Canadian television. And that is a direct result of the fallout from the Jamie Sale and David Pelletier 2002 Olympic judging scandal.

What happened to figure skating and why the sport is living in the delete bin of the sports industry is simple. Following the Sale/Pelletier scandal figure skating’s leaders acted indecisively. The sports leaders tried to ban French judge Marie-Reine Le Gougne and French Skating Federation president Didier Gailhaguet. They were both initially banned from the sport but today are back in the good graces of the World Skating Federation and figure skating is at the edge the abyss. Everyone associated with Figure Skating seemingly believed the Jamie Sale and David Pelletier 2002 Olympic judging scandal would pass. In the coming days, weeks and months David Stern had better pay attention to the mistakes made by others faced with the same challenges and learn from their mistakes.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: The Los Angeles Times, USA Today and

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