NBA: Disgraced referee Tim Donaghy says he used inside information to bet

[dave nz]

http://www.deseretnews.com/article/7...on-to-bet.html

[bdgear]

it was a good show on 60 minutes but i don't get how the inside info gave him that big of an edge?

I think he did something else to win at a 70-80% clip

[mvalentin]

espn did a report on his claims an as bettor you wouldn't have won much


Timmy claimed that betting Javie games against Iverson was gold but here's the actual result

All together, in the period in question, Iverson's teams beat the spread six times, and failed to beat it seven times when Javie was refereeing. Once, there was a "push" (in 2005, when the Spurs were nine point favorites, and beat the Sixers 100-91).

I don't really buy his hitting 80%, mabye 60% (which is still good)

[dave nz]

Good info mvalentin

[The Judge]

Tim Donaghy's claims on trial

Tim Donaghy's book "Personal Foul" is a page-turner.

At the heart of the book is a gripping and sad first-hand account of a gambling addiction tearing apart a family, a career and a reputation. To the detriment of his wife, children, job, the legacy of his father and all sense, Tim Donaghy tells of growing increasingly obsessed with the highs of winning. Table games at casinos, poker games with friends, golf games, horse races, football, basketball -- he says he bet on all of it to such an extreme that the mob, the FBI, the NBA and federal prosecutors got involved. Donaghy now joins Shoeless Joe Jackson, Ben Johnson, Pete Rose and the like in the pantheon of sports infamy.

"Personal Foul" is hardly all gambling addiction, though. Anecdotes include Charles Barkley dumping a container full of Gatorade on Donaghy in the referee's locker room; Donaghy sneaking away from the media surrounding his house in a daring nighttime golf cart raid, and the story of the prisoner who almost literally "broke his kneecaps," perhaps on behalf of the mob.

The book's primary mission, however, is to promote the theory that the NBA's independent investigation by attorney Lawrence Pedowitz, the FBI and the U.S. Attorney's office have been unable to disprove Donaghy's claim that he didn't fix games, because he didn't have to.

According to Donaghy, so many referees and league officials have axes to grind with various players, coaches or owners that insider knowledge can lead to an unheard of rate of sports gambling success.

Donaghy writes that he started betting on the NBA with his friend in November 2003. They kept their bets small -- typically $2,000 per game, but won big cash: "I'm stuffing it everywhere," he says in an interview. "Suitcoat pocket, card games, golf games, luxury items for the wife and kids." Donaghy estimates he made roughly $100,000 betting on the NBA.

Seventy to eighty percent of his picks -- a rate unheard of in professional gambling -- paid off. His secret? Knowing things like which referees hated which players, coaches, or owners. (Later, according to Donaghy, federal documents, and several other accounts, Donaghy instead provided his picks to James Battista, whose involvement with the Gambino crime family led to the wiretap that ensnared Donaghy.) The U.S. Attorneys wrote in a letter to the presiding judge that Donaghy won between $10,000 and $30,000 a year betting on the NBA.

Before the mob was involved, when Donaghy was betting, he says, $2,000 or thereabouts on NBA games, the wins came easy, and so did the money. "It's euphoria. I'm making picks. I'm the go-to guy. And I'm continually winning at an unbelievable rate."

Donaghy says his picks were once correct an amazing 15 out of 16 times. That streak, he says, "scared the living daylights out of us, and almost made us think we should stop, because we were scared that we were going to be detected."

Donaghy writes:
So that’s how I did it. I listened to the directives from the NBA office, I considered the vendettas and grudges referees had against certain players or coaches, and I focused in on the special relationships that routinely influenced the action on the court. Throw in some quirks and predictable tendencies of veteran referees and the recipe was complete. All I had to do was call it in and let the law of averages take over. During the regular season, I was right on the money seven out of 10 times. There was even a streak when I simply couldn’t miss, picking 15 winners out of 16 games. No one on the planet could be that lucky. Of course, luck had little to do with it.
Basically, Donaghy is saying that whether or not a certain team beats the spread in a certain game depends on a lot more than the performance of the players on the court. He is an NBA insider, insisting that NBA games do not unfold on a level playing field. That stokes the fires of fans who say NBA refereeing is not on the up and up.

Although the NBA itself has consistently painted Donaghy as lacking all credibility, people with intimate knowledge of the game found his book to be loaded with claims that sounded believable.

"This," says one current NBA executive, after reading the book, "is not going to be good. This goes way beyond one guy with a grudge. Some of the things in this book, I can remember them! And then I look back at a lot of other things I have seen, and I have to wonder. I'm scared this book will change forever how I see the game."

The scuttlebutt on press row since the book came out has also included plenty of open-mindedness to Donaghy's version of events. NBA writers, editors, bloggers and the like have been repeating, for instance, that Steve Javie had it in for Allen Iverson, or that Dick Bavetta likes to keep games close.

The assertion that NBA referees are not honest brokers has profound resonance. Has David Stern ever had a more difficult task than restoring the league's credibility after the Donaghy news first broke? These new allegations are in many ways worse. Donaghy's book names names, with specific, far-reaching claims that go a long way to painting the sport as illegitimate.

In short, this book tells the story of every NBA fan's worst nightmare.

But are the claims in Donaghy's book true?
"Personal Foul" has dozens of interesting claims. A good portion of these claims are nearly impossible to verify. But there are some exceptions.

For instance, Donaghy declares Charles Barkley, as a player, stalked into the referees' locker room looking for Donaghy after an on-court dispute between the two in a Clippers vs. Rockets game.

Barkley, says Donaghy, then dumped a massive bucket of Gatorade and ice over the referee.

In a text message to ESPN's Mark Schwarz, Barkley insists he has no recollection of any such thing, yet Donaghy was as indignant as ever.

"The two refs in the locker room know it happened. I know it happened. For Charles Barkley to lie like that is troublesome to me. Maybe we both need to sit down and take a lie detector test, and maybe the loser needs to give $500,000 to charity. And I'd like to see what his response would be to that."

In another part of the book, Donaghy claims that as a young referee he called a travel on Michael Jordan. In the ensuing conversation, Donaghy writes, then-Bulls coach Phil Jackson pointed at Jordan and said "they don't want that called on him."

Shown that passage by ESPN's J.A. Adande, Jackson responded: "I never said that."

Donaghy, however, insists that he did, and added: "It's probably on video somewhere." Asked why Phil Jackson -- whom Donaghy quotes in his book as a league personality willing to talk frankly about issues with refereeing -- would deny saying such a thing, Donaghy suggests that the conversation took place a long time ago, and Jackson may have forgotten.

Another anecdote is about three referees each calling palming on Allen Iverson in the first quarter of a particular game. In fact, if you look at the play-by-play of that game, Iverson had just two such calls. Donaghy says that he thought he remembered three calls, but was unable to confirm all three because the NBA wouldn't let him keep the tape of the game.

But some of the book's central claims -- those about how Donaghy was so successful gambling on the NBA -- are, with a lot of work, researchable. For instance:

Dick Bavetta and big spreads
"From my earliest involvement with [referee Dick] Bavetta, I learned that he likes to keep games close."

Donaghy asserts there was easy money to be made counting on Bavetta to use his whistle to help a team that is trailing.

For a gambler, this strategy would be dicey in games expected to be close. The time to bust this one out is by betting on underdogs when there's a big point-spread. Donaghy says he felt confident that big underdogs would beat the spread if Bavetta was one of the three referees.

It's not hard to find examples when Donaghy was wrong. Bavetta has refereed plenty of blowouts. In January 2004, for instance, the Kings were seven-point favorites over the Suns, but won by 20. The next month, the Rockets were nine-point favorites over the Hawks, and won by 21. In January 2005, the Suns were favored by eight and won by 18. That same year, the Bulls won a Bavetta game by 40 when they were favored by nine, and the Pistons laid a 25-point beating on the Bobcats when they were favored to win by seven. A few months later, the Pistons, favored by seven, beat the Pacers by 25.

Of course, a few losses does not a bad betting strategy make. When you look at all Bavetta games from the period in question, is Donaghy right? Did Dick Bavetta keep games close during the period when Donaghy was betting? Kevin Arnovitz digs in deep with economist Joe Price, whose massive NBA database has no support for Donaghy's claim.

Steve Javie vs. Allen Iverson
Donaghy claims referee Steve Javie does not like NBA star Allen Iverson, and that betting against Iverson's teams in Javie-refereed games was good strategy.

"If Javie was on the court when Iverson was playing," writes Donaghy, "I would usually bet on the other team to win or at least cover the spread. No matter how many times Iverson hit the floor, he rarely saw the foul line."

One can dig into each and every game -- Javie refereed Iverson just 14 times while Donaghy was betting. And you know what? Iverson's teams did just about average, compared to the betting line. On November 26, 2003, when the Pistons were in Philadelphia, the Sixers were favored by one point, but won by four. So, Donaghy's rule would have lost you money that night. Javie was on the court when Iverson's Sixers played in Seattle on December 28, 2004. The Sonics were eight point favorites, but won by just seven. If he had followed his own advice, Donaghy would have lost money that night. Javie refereed when Iverson's Sixers killed the Nets, 116-96, on April 12, 2006.

All together, in the period in question, Iverson's teams beat the spread six times, and failed to beat it seven times when Javie was refereeing. Once, there was a "push" (in 2005, when the Spurs were nine point favorites, and beat the Sixers 100-91).

Win or lose, gamblers typically pay a 10 percent vig. Basically, to win $100, you have to bet $110. If someone had bet $110 on Iverson's opponents to beat the spread in each of the 14 Javie games, they would have won $700, lost $660, (and had no money change hands on the "push" game). Do the math there, and you'll see that this betting strategy would have left you with a measly $40 profit, on $1540 gambled.

You'd have to bet a ton of money to get rich that way. Of course, it's possible that Donaghy only bet some of these games, and happened on a winning streak. But the rule he describes in his book is no way to beat your bookie. And it's not true that following this rule would make you a long-term winner.

Most importantly for those who like to believe that the NBA is a pretty fair game, there's no evidence to support the notion that Allen Iverson had it particularly bad in Javie games. The specifics of which referee made which call are not available -- only the NBA has that -- but the idea that Iverson would shoot fewer free throws in games Javie referees is simply not true. Iverson averaged 8.5 free throws per 36 minutes played in those 14 Javie games, compared to 7.9 per 36 minutes played over his entire career. You can assess this for yourself by going through boxscores for the 14 games Javie reffed while Donaghy says he was betting (11/26/2003 Pistons at Sixers , 2/3/2004 Raptors at Sixers , 12/28/2004 Sixers at SuperSonics , 1/12/2005 Sixers at Bulls , 2/4/2005 Hawks at Sixers, 3/2/2005 Nets at Sixers, 4/1/2005 Mavericks at Sixers, 12/3/2005 Sixers at Spurs, 12/14/2005 Hawks at Sixers, 1/16/2006 Sixers at Wizards, 3/31/2006 Sixers at Knicks, 4/12/2006 Sixers at Nets, 3/30/2007 Nuggets at Suns, 4/16/2007 Timberwolves at Nuggets.)

Wayne Winston is a professor at Indiana University's Kelley School of Business, the author of the book "Mathletics" which explains intricate methods of using math to assess sports, including referee bias. In the nine years he worked for the Dallas Mavericks, Winston built a sophisticated database of NBA game information. Winston used his own methods to check into Donaghy's claim about Javie and Iverson. He looked into how Iverson's Sixers teams performed compared to expectations when Javie refereed, and similarly found nothing to confirm Donaghy's assertion. "I computed forecasts based on Sagarin ratings for each game Javie officiated against the 76ers from 2002-2006," he reports, "and found zero evidence that Javie unfavorably impacted 76ers performance in those games."

Joe Crawford and Allen Iverson
"Referee Joe Crawford had a grandson who idolized Iverson," writes Donaghy. "I once saw Crawford bring the boy out of the stands and onto the floor during warm-ups to meet the superstar. Iverson and Crawford’s grandson were standing there, shaking hands, smiling, talking about all kinds of things. If Joe Crawford was on the court, I was pretty sure Iverson’s team would win or at least cover the spread."

In the relevant period Iverson's teams -- the Sixers from 2003 into 2006, then the Nuggets -- were refereed by Crawford 14 times. They only beat the spread five times, and failed nine times.

The games in question are 11/5/2003 Hornets at Sixers, 2/5/2004 Lakers at Sixers, 1/22/2005 Sixers at Magic, 2/11/2005 Sixers at Raptors, 3/1/2005 Sixers at Bucks, 11/11/2005 Lakers at Sixers, 11/26/2005 Sixers at Knicks, 12/12/2005 Timberwolves at Sixers, 2/8/2006 Sixers at Bobcats, 3/9/2006 Nuggets at Sixers, 4/8/2006 Sixers at Bulls, 11/17/2006 Sixers at Suns, 2/20/2007 Nuggets at Spurs, and 4/9/2007 Lakers at Nuggets.

Betting against Iverson's team in Crawford games would have been lucrative. But Donaghy recommended betting for Iverson's team to beat the spread in these games. Let's pretend Donaghy bet $110 on Iverson's team to beat the spread in every Crawford game. Donaghy would have paid $990 for the nine losers, and won $500 on the winners, meaning he would have lost $490.
Of course, you'd be far better off just picking winners at random.

For what it's worth, there's little evidence Iverson was getting any favors in these games, as his free throw rate in Crawford games was 7.9 per 36 minutes -- the same as his career average.

Joe Forte and Mike Fratello
Donaghy writes that Fratello and Forte are close friends, and that Forte dines free at Fratello's restaurant in Atlanta, where he once even brought Donaghy as a guest.

Donaghy never says that he actually made money betting on this relationship, but Donaghy does say he once bet on a Fratello-coached Memphis team (he later switched the bet, based on a tip about injuries to the Wizards).

But what about a referee and a coach being friends? Isn't that the kind of thing that turns your stomach as a fan? Did Fratello's Grizzlies tend to do well when Forte was on the floor, as Donaghy implies?

Hardly.

Forte refereed 13 games while Fratello was coaching the Grizzlies (all fall during the period when Donaghy was betting). They beat the spread in just six of those 13 games, falling short seven times. According to BYU economist Joe Price's database, when you factor in the final scoring margin in those games -- a more refined measure of a team's performance -- Fratello's Grizzlies did not happen to do well in those 13 games.

Donaghy's retort
Confronted with all of that data at a Tampa hotel on Monday morning, Donaghy had no explanation, other than to say that his betting techniques were more subtle than simply betting on these rules, and that he did not bet on every game that met the description.

"These are some of the criteria that I used," Donaghy says. "I'm not saying I bet every game. ... You can spin the stats any way you want ... The FBI investigated thoroughly. ... To sit here and say there was a science to how I did this, with the stats you're throwing at me. ... Based on the information you're using, with your equation, it's not even in the same ballpark. There were other factors that came into play. Inside information about injuries. Home game or away game. Home crowd. Many more factors to take into consideration."

"I'm claiming that I picked 15 out of 16, and I'm also claiming that all the facts in this book are true, and it's what I used to pick games."

Again and again during the interview, Donaghy relied on the FBI to buttress his credibility.

"The FBI and the NBA did a thorough investigation," he says, "and they both concluded that I did not fix games in the NBA."

The truth is far less emphatic. U.S. Attorney Benton J. Campbell wrote, in a letter to the presiding judge, that "there is no evidence that Donaghy ever intentionally made a particular ruling during a game in order to increase the likelihood that his gambling pick would be correct." The letter adds that Donaghy has acknowledged that his gambling may have subconsciously influenced his work.

The NBA's investigation concluded, essentially, that Donaghy might not have rigged games. "It seems plausible to us that Donaghy may not have manipulated games," but admits that they have no thorough way to check. "Given the information currently in our possession, we and the League’s experts are unable to contradict the government’s conclusion that '[t]here is no evidence that Donaghy ever intentionally made a particular ruling during a game in order to increase the likelihood that his gambling pick would be correct.' ... Donaghy officiated close to 300 games in this period. Without knowing on which games or teams he wagered and without access to Donaghy’s explanation for his calls, we believe that it would be impossible to find that the government’s conclusion that he did not manipulate games is erroneous.

Meanwhile, Donaghy points to the foreword of his book, penned by former FBI agent Phil Scala. The foreword goes to some trouble to lend credence to Donaghy, but specifically does not say he did not fix games, saying the FBI's interest was the Gambino crime family, and they left employment issues and the like to others.

Did Tim Donaghy fix games? His book is emphatic that he did not, but while it has provided many claims to that effect, it has not yet delivered evidence.

[Dr. Jack]

That was a great read

[shantystar]

yap

[The Judge]

Tim Donaghy's tale of Dick Bavetta

Tim Donaghy's "Blowing the Whistle" implicates several NBA game officials for having extra-curricular agendas while they're refereeing. Most of those ethical breaches can be fairly classified as favoritism to one team over the other based on a personal relationship or vendetta.

With veteran official Dick Bavetta, the charge is much different.

Donaghy portrays Bavetta as a genial NBA veteran and faithful company man who wants to facilitate a quality entertainment product every night. Since fans generally find a close game more compelling, Bavetta made a deliberate effort to keep the contest competitive, according to Donaghy.

Early in the book, Donaghy tells the story of being at his brother’s birthday party while there’s a Bavetta-officiated game on television:

“Watch,” I told my brother. “Anytime Bavetta referees, you’ll rarely see a blowout. When a team gets up by 20, he starts blowing the whistle like crazy.” And sure enough, that’s what happened -- one team got way ahead before Bavetta whistled the other team back into contention.

According to Donaghy, Bavetta’s tendency for keeping games close made him a favorite of the League. It also gave Donaghy an opportunity to capitalize:

From my earliest involvement with Bavetta, I learned that he likes to keep games close, and that when a team gets down by double-digit points, he helps the players save face. He accomplishes this act of mercy by quietly, and frequently, blowing the whistle on the team that’s having the better night. Team fouls suddenly become one-sided between the contestants, and the score begins to tighten up. That’s the way Dick Bavetta referees a game -- and everyone in the league knew it.

Aware of this propensity, Donaghy says he would often take the underdog when Bavetta was assigned to a game, and cash in as a result.

Since Donaghy maintains he made 70 percent or better on his money while leveraging these kinds of biases, we turned to economist Joe Price and his colleague Henry Tappen, who have performed extensive research on referee bias in the NBA. Price used his data sets to examine Donaghy’s claim that Bavetta systematically kept games close.

The results: Far from making 70 percent, that strategy would have lost you 12 percent of your money. In other words, choosing at random would have given you a better chance at success.

Anyone who consistently bet the “big underdog” (a team receiving seven points or more in the closing betting line) in Bavetta refereed games between the beginning of the 2003-04 season (when Donaghy says he began betting on NBA games) to the conclusion of the 2006-07 games (soon after which Donaghy confessed his actions to the feds) would have lost his shirt.

When confronted with this statistic by Henry Abbott, Donaghy balked. "I looked for spreads in games -- Bavetta games -- that were double-digit spreads," Donaghy said. "I'm telling you that, quite often, Dick Bavetta in the fourth quarter of games when the [lead] was 20 point or more, changed his style of officiating to where those games became closer. He would instruct other referees to change their style, too. He'd say, 'Let's not embarrass anyone. Get the marginal calls at one end, but not down at the other end of the floor.'"

Bavetta officiated 42 games between the beginning of the 2003-04 season and the end of the 2006-07 season where the closing betting line was 10 points or greater. The big underdogs in those contests went 17-25 against the spread -- a winning percentage of 40.1 percent. In other words, teams that were expected to be beaten badly were far more likely to be embarrassed when Bavetta was on the floor.

Joe Price, professor of economics at Brigham Young University, sifted through all the data. Price has studied gambling for a long time, and he regards a team receiving seven points or greater a big underdog. This generous interpretation of "big underdog" not only makes Donaghy's claim look better, but it also provides a bigger, more dependable data set.

To a get full understanding of Price’s findings and their implications, we asked Price to go over the data with us and explain how he reached his conclusions. You can view all the data on Price's website.

First off, how did you come to have all this data?
The data was originally collected as part of research that Justin Wolfers and I did on racial bias in the NBA. We collected the box-score and play-by-play data from basketball-reference.com and ESPN.com. The betting data came from covers.com.

So let’s look at this in the most practical context: Would betting on the underdog in games where the spread was seven or more points and Bavetta was the official have been a profitable strategy?
If you had bet on the underdog all of the games in which Bavetta was an official and in which one of the teams was favored to win by seven or more points, your bet would have paid off only 46.2 percent of the games. This would have caused you to, on average, lose about 11.8 percent of the money that you bet, on average.

As you and your research assistant, Henry Tappen, delved into the research, when did the red flags begin to appear?
First of all, some of the basic things that you’d expect to observe if Bavetta liked to keep games close or favor the underdog simply don’t play out in the data. For example, the final score margin in Bavetta games is slightly larger, on average, than non-Bavetta games (10.8 versus 10.4 points) and big underdogs (favored to lose by seven points or greater) are less likely to win when Bavetta is one of the officials (17.3 percent vs. 19.7 percent).

One facet of the game where referees have tremendous discretion is foul calls. Was Bavetta more likely to whistle favorites for more fouls, as Donaghy claims?
There is evidence in the data that referees have a tendency to show a little favoritism to big underdogs -- but Bavetta less than your average referee. These differences, however, are not statistically significant.

How conclusive is the evidence?
One of the challenges of assessing individual referee behavior in the NBA is that the publicly available data (such as the box-score or play-by-play data) does not indicate which referee made which call. The work that Justin Wolfers and I did on referee bias was based on the racial mix of the referee crew, so that wasn’t a problem. All the same, examining the behavior of one referee is challenging.

However, the real issue with the Donaghy allegation is whether you could use the information about whether Bavetta was officiating to predict the outcome of the game. Our analysis of the data provides no evidence that this is true. One thing to note is that there is a lot of variation in the final point margin at the end of games. There are certainly games officiated by Bavetta where the final score was close and games officiated by Bavetta in which the underdog beats the spread. But these things are, on average, more likely to occur in the games in which he is not one of the officials.

We're talking about 325 games officiated by Dick Bavetta. Despite the findings, is it possible that Donaghy could've identified specific trends within those games that would have allowed him to come out ahead?
It is possible, but unlikely. In order for us to test for effects on a subset of games, Donaghy would have to be more specific about which Bavetta games we should bet on. We did a simple experiment in which we tested what would have happened if you had bet on the underdog in the 104 games that one team was favored to win by more than seven points and Bavetta was the referee. Again, we found that, using that strategy, your bet would have paid off only 46.2 percent of the time, and you would have lost 11.8 percent of the money on average. This is compared to winning your bet 52.3 percent if you had bet on the underdog in games in which Bavetta was not the official.

As a behavioral economist and a fan of the NBA, how do you make sense of all this?
There is a long history of people making faulty inference based on small samples. One example is the “hot hand” phenomenon. When we see a player make three shots in a row, we often think to ourselves that he is “on fire.” For a player that makes half his shots, however, we would expect that, by random chance, about 12.5 percent of any random set of three consecutive shots would have all three shots made.

One the other hand, some patterns in referee behavior (such as racial bias) can only be detected by analyzing large sets of observations. With a limited set of observations, people often mistakenly see patterns and fail to detect true patterns.

[Bisket]

donaghy never said he blindly bet on one bias.......

[Bronson7]

Great read.

[TheHippieRipper]

awesome post thanks