Saturday, March 23, 2024

Hedging Our Bets on Shohei Ohtani

Los Angeles Dodgers pitcher/outfielder Shohei Ohtani was a sure bet. After winning two AL MVPs with the Los Angeles Angels over the past three seasons, Ohtani signed a 10-year, $700 million contract with the crosstown Dodgers

But all of that changed this past Tuesday when Ohtani's interpreter Ippei Mizuhara disclosed that the superstar had provided him $4.5 million to pay off his gambling debts. The problem is that gambling is still illegal in California and the money went to a bookie Matthew Bowyer who is currently under investigation. Within 24 hours, Mizuhara changed his story and said Ohtani had no involvement nor knowledge of his gambling problem while Ohtani's camp accused Mizuhara of a "massive theft." The Dodgers then fired Mizuhara.

However, Ross Barkan of the New York Intelligencer is quite skeptical:

MLB is desperately praying for this story to go away, but it will only evolve from here. That’s largely because Ohtani’s theft claim, on its face, makes little sense. How did Ohtani not know his interpreter was wiring $1 million from his own bank account? How did Ohtani’s bank not alert him? Banking institutions have aggressive compliance procedures in place to ensure very large sums of cash are not wired without the consent of the account holders. It is difficult to imagine Ohtani himself didn’t sign off on the transfer in some form.

More likely is Mizuhara’s original explanation: He ran up huge debts, and his friend, who is very rich, came to bail him out. But that story, which Ohtani’s team probably thought protected him until they realized the implications of the FBI’s involvement, is itself damning. It means Ohtani knowingly sent at least $1 million directly from his bank account to an illegal bookie in the FBI’s crosshairs. (italics mine)

MLB has said Ohtani is not under investigation, but that line won’t be sustainable for much longer. Mizuhara will probably face a prison sentence and prosecutors will be leaning on him for information. What will he tell them? Baseball players aren’t forbidden from betting on sports, but doing so with an illegal or offshore bookie is against the rules. Betting on baseball is, of course, a serious offense. It’s what got Pete Rose banned for life and the Black Sox cast out of the sport in the primes of their careers. 

Indeed, MLB formally opened an investigation on the matter yesterday with Opening Day of the 2024 season less than a week away.  

All of which leads to three questions.

1. Did Ohtani cover Mizuhara's gambling debts or did Mizuhara steal funds from Ohtani's account?

2. If it is the former, then what if Ohtani actually covered his own gambling losses and Mizuhara is merely falling on his samurai sword?

3. Whether it was Ohtani or Mizuhara who made the bets were any of the bets made on baseball?

Unless it can be established that Ohtani was a victim of fraud, my guess is Ohtani is potentially looking at a one-year suspension and a fine in the tens of millions (possibly $70 million which would represent one-tenth of his contract with the Dodgers) although I'm sure the Major League Baseball Players Association (MLBPA) would file a grievance concerning such an amount.

If the funds were used to cover bets on baseball with Ohtani's knowledge, then all bets are off. MLB's business ties with DraftKings, notwithstanding, gambling by players, managers and other MLB personnel on baseball is still taboo. The Black Sox scandal was over 100 years ago, and "Shoeless" Joe Jackson still hasn't been forgiven. Pete Rose will go to his grave before the Baseball Writers Association of America (BBWAA) cast a vote for him for the Baseball Hall of Fame.

At this point, Shohei Ohtani will be making his Dodgers debut in a matter of days. Unfortunately, it will be his off-field activities which will be the dominant story of the 2024 MLB season.

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