NBA ref racism brought to light*

*This article has been appended with a correction. Please see below.

Following one of the worst betting scandals in recent memory, one economics expert is calling a foul on current sports betting regulations.

Justin Wolfers, whose work is based in applied economics, similar to the type of research made popular by the best-selling book Freakonomics, made a name for himself last spring when he released a study indicating a racial bias among NBA referees.

And in the wake of the Tim Donaghy betting scandal, a previous study of Wolfers may offer a suggestion for how to stop such violations.

Donaghy, an NBA referee, pled guilty Aug. 15 to felony gambling conspiracy and sports betting charges after it was discovered that he had bet on games he officiated.

NBA Commissioner David Stern called Donaghy a "rogue, isolated criminal," but Wolfers contends that amateur and professional sports still have larger gambling concerns.

A study he published in 2006, for example, argues that point shaving occurs in about 1 percent of NCAA Division I basketball games.

In an op-ed in The New York Times this summer, Wolfers argued that legalizing gambling nationwide on which team wins or loses a game, while banning bets on point spreads, could prevent corruption.

That way, he said, there would be no motivation for point shaving, when a player or official throws a game by influencing not the team that wins, but a less consequential aspect like the margin of victory.

Experts in the field agree with Wolfers' assertions, saying that point shaving is more likely to be at the center of a sports betting scandal than a player or official throwing the game in favor of a particular team.

"It is the case that you can get people to participate in schemes because what the participants are interested in" is the winner, not the margin of victory, said David Berri, a professor of applied economics at California State University-Bakersfield.

By asking players and referees to influence the winning margin, Berri said, "you're asking people to manipulate something they really don't care about, and they're happy to take your money."

So, Wolfers proposes, a legal gambling sector would attract bettors to a type of gambling that is not conducive to cheating.

"If we had a regulated gambling sector in the U.S. that did not allow point-spread betting, the hope is that that would be a more attractive sector than betting in the illegal sector," he said.

Wolfers added that people prefer to buy products such as cigarettes in regulated markets, and he doesn't see why gambling should be different.

Congress has recently taken steps to regulate certain types of gambling - in April, U.S. Rep. Barney Frank (D-Mass.) introduced legislation to form an Internet gambling licensing program - but challenges still exist in enforcing gambling-regulation legislation.

If such laws existed, it would be necessary to select or create an agency to oversee the licensing and regulation, said Geoffrey Rapp, a visiting professor at the University of Utah S.J. Quinney College of Law who specializes in sports law.

Also, athletes, who can face penalties for simply associating with known gamblers, would likely come into contact with bettors more often if wagering were legal, Rapp said.

NBA officials did not respond to phone and e-mail requests for comment for this article.

Correction: Due to an editing error, the headline and part of the article incorrectly stated that Wolfers' 2006 study on college point-shaving had implications for his research in racial biases of referees. In fact, the study only held implications relating to Wolfers' contention that gambling should be legalized.

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