The Line on NBA Betting

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In a scenario reminiscent of Tony Soprano siphoning money from the sports store owned by his gambling-addicted and debt-ridden high school friend Davey Scatino, the New York Daily News has reported that low-level Mafia criminals Tim Donaghy knew from high school used his gambling debt to force him to share information and possibly fix NBA games.

Donaghy, 40, has been an NBA referee for 13 years. He earned $260,000 last season. His attorney, John Lauro, did not return a call for comment on this article.

An FBI investigation of Donaghy spans the 2005-06 and 2006-07 seasons. During that period, Donaghy officiated 139 regular-season games, eight playoff games, and four preseason games. The NBA has not yet reviewed games called by Donaghy to determine if there is evidence that he, in fact, influenced the outcome of any of those games.

NBA Commissioner Stern conceded that judgment would be difficult, but would be pursued later this year. "If you bet on a game, you lose the benefit of the doubt," he said. "So I'm not going to say it didn't happen, because that would impair the credibility I think the NBA deserves for its efforts."

NBA sponsors haven't expressed an inclination to pull back because of the alleged gambling. Nike (NKE), Anheuser-Busch (BUD), Sirius Satellite Radio (SIRI), and IBM (IBM) have been big league advertisers.

Bell says that based on his review of the past four seasons, Donaghy became much more active in making calls over the last two seasons and led the league in fouls called last year. But one thing jumped out from Bell's review. In 15 games Donaghy called last season, there was a disproportionate amount of money bet on one team, moving the betting lines by at least a point and a half in the other direction before tip-off. In general, a differential of $50,000 in bets will cause the lines to move a half-point away from the money. In all 15 games identified by Bell, the money-backed team produced payouts. Bell says, "The odds of that happening are over 32,000 to 1."

Cowan is an intern at BusinessWeek.