This is how sports games became essential to league results.

American sports suffered another black eye after the arrest this week of an NBA coach and a current NBA player for their alleged ties to illegal sports betting and rigged poker games.

This is the latest example of gambling and players breaking the rules. But for those who think this means leagues and teams will pull back from their ties to sports gaming apps, here are four words for you: Don’t bet on it.

Direct sponsorship deals between various legal sports betting sites and the biggest U.S. sports leagues are worth billions of dollars spread over several years and probably more than $1 billion a year, said Victor Matheson, an economics professor at the College of the Holy Cross and an expert in sports and gambling.

Such sponsorship deals are “clearly very important” to the finances of sports leagues and teams, Matheson said. No matter how rich the leagues become, gambling sponsorships are “not something anyone wants to turn down.”

Once states began legalizing sports gambling following a 2018 Supreme Court decisionsponsorship deals soon followed. Today, all major American sports leagues and most individual teams have such sponsorship agreements. Many teams, including the NFL’s Arizona Cardinals, MLB’s Arizona Diamondbacks and the NBA’s Washington Wizards, have signed deals to install physical betting shops in their stadiums and arenas, Matheson noted.

Legal betting on sports reached $160 billion last year in the United States, far more than the $100 billion spent on lottery tickets, according to Matheson. Gross gaming revenue, meaning the amount wagered less than the amount paid on winning bets, reached $13.7 billion, up 23% from 2023, according to the American Gaming Association, an industry trade group. Most of these sums are wagered online and not in physical casinos.

Sports gambling has become a huge industry in less than a decade, and it continues to grow. It’s no surprise that much of this money ends up in the coffers of sports teams.

“The raw (sports betting) numbers — I don’t think — are still mind-blowing,” said Michael Lewis, author of “Moneyball” and “The Blind Side,” and whose podcast “Against the Rules” just devoted a season to sports betting. “But the fact that it was new revenue – and new revenue is hard to come by – got everyone excited.”

But This direct support provided through sponsorships is only a fraction of the billions teams and leagues receive because fans bet on games. Sportsbooks spend hundreds of millions on advertising each year, primarily during games, as well as in pre-game and post-game shows, according to MediaRadar, which tracks and estimates advertising spending. This increases the revenue of networks or streaming services – and therefore the rights fees they are willing to pay.

Betting generates more overall revenue for sports, boosting broadcast and streaming rights deals into the tens of billions. And it’s even more important in this era of declining viewership, where all forms of entertainment are fighting for the audience’s attention.

“It’s a way to keep fans engaged in meaningless matches,” Lewis said. “In an age where people’s attention spans seem to be shrinking by the moment…this feels like the future of how a fan engages with sports.”

Unlike professional leagues and teams, the NCAA does not have a sponsorship agreement with sports betting. In a case of bad timing, just before Thursday’s news of the NBA scandal, the NCAA announced it would allow college athletes and staff to bet on professional sports from November 1st.

But even as the NCAA continues to keep its distance from sports gambling and bans players from betting on college sports, the NCAA benefits from the enormous fan interest and viewership of its “March Madness” basketball tournaments. Even casual fans have money that depends on game outcomes, bringing in an estimated $3.1 billion in bets in 2024, according to the American Gaming Association.

“How do you convince the networks to pay a billion dollars a year for college basketball? It’s because a ton of people tune in,” Matheson said. “And why are so many people watching college basketball during March Madness? It’s because, obviously, everyone’s building a bracket, right? So it’s a perfect example of indirect benefits.”

Legalized sports gambling was primarily limited to Las Vegas casinos until a Supreme Court ruling in 2018 opened the door to it nationwide. But there have always been games of chance sports, Matheson said.

“We have clear evidence of gambling during the ancient Olympic Games that began in 776 BC,” he said. “So sports betting is as old as organized sports themselves. »

But it’s a form of gambling that hasn’t been available in the past, with fans being able to bet on small events during a game through what’s known as prop bets, not just the end result.

“It’s very different from the seventh century BC,” Lewis said. “It’s having a casino in your pocket.”

Thursday’s criminal charges suggest that leagues were unprepared for the risks of bad actions by some players, said Jonathan D. Cohen, author of “Losing Big: America’s Reckless Bet on Sports Gambling.”

“The leagues kind of went into this without really knowing what they were getting into, just knowing that they could make a lot of money from it,” Cohen told CNN’s Omar Jimenez on Friday.

“It just speaks to the kind of recklessness with which we dove in,” Cohen said. “I think we should have legal sports betting. Maybe we should even have legal online sports betting. But that wouldn’t have been necessary if we had just taken a more cautious approach.”

Thursday’s arrests and charges involving the NBA follow the suspensions of two Cleveland Guardians pitchers this summer for a MLB investigation into sports bettingand suspensions in 2023 of six NFL players for bet on championship matches.

All of these incidents present risks for leagues that have become enamored with them and rely on the revenue they earn from betting apps.

“I think (the leagues) are going to poison their sports if they’re not careful,” Lewis said. “We’re not at the point where people are truly questioning the integrity of the sport. But we’re not that far away.”

CNN’s Auzinea Bacon contributed to this report