Shawn Lemon's indefinite CFL ban reveals hidden cost of pro leagues going all in on legalized betting
Byproduct of embracing legal sports betting puts athletes who can least afford it at risk
Wednesday morning the Canadian Football League announced that an independent arbitrator had upheld an indefinite suspension the league had handed to Shawn Lemon, the Montreal Alouettes defensive end sanctioned last off-season for betting on CFL games.
An investigation found Lemon had placed several CFL wagers in 2021, including one on his own team, the Calgary Stampeders. Lemon appealed the original ruling, and was permitted to suit up for Montreal while his case was pending. The league hasn't given any hints about when it might reinstate Lemon, a veteran who is the definition of a pro football journeyman. He has played for every CFL team except Hamilton, has done stints with three Arena League teams, and attended training camp with the Steelers and 49ers of the NFL.
But the reliable pass rusher turned 36 this past Sunday. At his age, an indefinite suspension could equal a lifetime ban. We can read Lemon's pre-season appeal as one more longshot gamble, and the brief reprieve as the closest he'll come to a win.
Lemon, in contrast, managed to play four games before July 4, when his suspension first took effect. His appeal was heard in early August and the results made public Wednesday. The arbitrator's ruling, then, takes us right back to where we were in April, when the CFL first sanctioned Lemon. It's the same place we figured we'd end up when pro leagues across the continent went all in on legalized single-game betting.
Gambling outfits reportedly spend more than $1 billion US annually sponsoring major North American sports leagues, so the numbers make it clear: embracing legal sports betting represents a massive opportunity for sports leagues eager for new revenue streams. But who bears the opportunity cost in this setup?
Often the people who can least afford it.
Lemon, for instance, joins Porter as a recent example of an athlete crossing sports gambling's bright red line, then watching his career evaporate.
Porter's two-way contract with the Raptors paid him just under $560,000 US. It's a huge sum of money for normal folks but, as he later revealed during a police investigation, not enough to cover the gambling losses he had incurred. He traded inside information to law-straddling gamblers hoping to claw his way out of debt.
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Beyond the details the CFL has released, we don't know the nature or extent of Lemon's gambling habit. But we know he plays in the CFL, where the average salary, according to the league, hovers just above $100,000. In a country where the median worker earns $68,000, it's good money, but it's a pittance in the broader world of pro sports.
The highest-paid NFL player at Lemon's position — 49ers defensive end Nick Bosa — earns an average of $34 million a year. In the context of those numbers, both Porter and Lemon fall into the category of "Those Who Can Least Afford It."
Last month a trio of professors from UCLA and USC published a 30-page study titled "The Financial Consequences of Legalized Sports Gambling." They found that credit scores tend to decline when people have access to any type of legal sports betting, and that scores drop even more steeply when linked with online sports gambling.
Factor in bankruptcy, and the outlook appears even less encouraging.
"Three to four years after the legalization of online sports gambling, we observe that the likelihood of bankruptcy filing increases by as much as 25-30 [per cent] when compared to pre-treatment levels," they write.
Does correlation equal causation here?
Not necessarily. Maybe pandemic job losses, or the rising cost of living, also explain debt loads too heavy for many households to manage.
But should research like this prompt more research on the hidden costs of widespread betting on sports.
Absolutely.
Money maker
According to iGaming Ontario, by April 2023, sports gambling accounted for $1.48 billion in revenue in the first full year of legalized single-game betting in the province. Initial reports tended to emphasize positive effects on the economy — the 12,000 jobs supported by sports betting, or the nine-figure tax revenue those wagers generated for various levels of government.
We also know, however, that gambling operators make money because bettors tend to lose theirs. All the money regular people bet on sports, both online and in person, comes from somewhere.
But where?
Another study published this summer offers some clues.
In this 82-page report, titled "Gambling Away Stability: Sports Betting's Impact on Vulnerable Households," researchers from Northwestern University, Brigham Young University and the University of Kansas calculated that every dollar Americans spent on sports betting reduced traditional investments by just over $2. Their research also indicated that increased sports betting was often accompanied by more frequent visits to restaurants and sports bars, and that Americans tended to fund all of it by foregoing savings, or taking on credit card debt.
Here to stay
The study acknowledges a reality that even we non-gamblers have to accept — that widespread, legalized, single-game sports betting is never going away. Leagues, fans, broadcasters and other stakeholders are too used to it, and too dependent on the revenue. But they also challenge rule makers to establish a framework that limits the damage unchecked betting can do to a family's finances.
"Policymakers should consider how the allure of betting might divert funds from savings and investment accounts, which can affect household financial stability and long-term wealth accumulation," they write. "Understanding these dynamics is important for crafting policies that mitigate potential negative impacts while allowing for the economic benefits and entertainment value of legalized sports betting."
For right now, the playing field remains titled against consumers.
Consider that DraftKings caps the amount players can wager — after they've shown the ability to beat the system legally. Or that the same company was set to start deducting fees from winners' payouts, another foolproof method of making sure smart gamblers don't get too far ahead. They only abandoned that plan once competitors made clear they wouldn't implement similar clawbacks.
Even stranger than the strategy was the timing. DraftKings had just announced that it had finally registered a profitable quarter. The revelation should have another logical question we don't ask frequently enough.
If even The House loses this often when we bet on sports, can anyone really win?
