A newer talking point from the PGA Tour and Major League Baseball describes purveyors of unofficial sports betting data as “pirates,” or groups who are “stealing” from the leagues.
This narrative, while cute, does not appear to follow the current state of the law.
So, who said what now?
In Washington state, while testifying before the state’s gambling commission, Marquest Meeks, the senior counsel for MLB, said those who are obtaining sports betting data by scraping websites “using hacking tools” are pirates.
More recently, the PGA Tour’s Andy Levinson said at the Sports Betting USA Conference recently that sportsbooks offering bets on events but not using the Tour’s official league data are using stolen data.
Let’s be clear with the facts as we understand them: US case law doesn’t support these characterizations.
Who supplies the unofficial data?
Part of the problem with the leagues arguing unofficial data is stolen or pirated is the tie-ups between the parties. Many sports betting data providers have wedded leagues in their distribution of official league data and also supply unofficial data for events occurring in other leagues where they have not exchanged vows.
David Lampitt of data provider Sportradar, said early this summer that the company provides both official and unofficial data. Lampitt stressed that while there might be some delays associated with unofficial data, his company applies the same quality checks on it as on official data.
Because of the exclusivity of partnerships, the need to provide official and unofficial data is a commercial reality for data providers seeking to offer competitive coverage.
So why is unofficial data being called stolen?
While the term “stolen” has been thrown around, what is implied is that at least certain members of the leagues believe that unofficial data providers are committing larceny. As an example, here is how New York State defines larceny:
A person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof.
This definition makes the contention that independently collected unofficial data is stolen untenable. Indeed, there is no deprivation of property. There is also no taking, as the information in this example is literally created independently.
Arrrr, what about pirates?
The suggestion that those using unofficial data are pirates has been the second part of this mischaracterization. Indeed, the mention of pirates evokes images of takings of doubloons and jewels at swordpoint, or Jonny Lee Miller and Angelina Jolie hunched over a computer.
The idea that a provider of unofficial sports betting data is a pirate was similarly suggested in a 2016 case involving World Chess US Inc. and Chess24.
World Chess argued that by describing chess moves, information independently obtained by Chess24, rendered the company akin to pirates. That’s because World Chess imposed terms on online subscribers and live attendees to the chess championship.
The Southern District of New York found that Chess24 were not pirates. In fact, its independent collection and distribution of data did not offend a variety of laws, including hot news misappropriation claims and copyright claims.
What about those hacking tools?
It is suggested that some unofficial data providers may scrape data from web sources to compile data and sell it to sports gambling operators. According to Scraping Hub, web scraping is:
Also known as web data extraction, is the process of retrieving or “scraping” data from a website. Unlike the mundane, mind-numbing process of manually extracting data, web scraping uses intelligent automation to retrieve hundreds, millions, or even billions of data points from the internet’s seemingly endless frontier.
In fact, the act of copying and pasting of that paragraph is scraping on a very small scale. Web scraping can allow for the extraction of large amounts of data relatively quickly.
But is it legal?
Eric Goldman of Forbes, wrote in 2015 that web scraping is ubiquitous on the internet. Google, in fact, relies on scraping to provide search results to virtually everyone in the world.
In 2014, QVC, the shopping channel, sued a company called Resultly. It argued Resultly was violating the Computer Fraud and Abuse Act (CFAA). The Eastern District of Pennsylvania Court found that while Resultly caused damage by overloading the QVC website, it was not intentional and therefore did not trigger the CFAA.
Without deciding the precise point on the continuum necessary to establish intent, the Court finds that the “objective indicators” plaintiff points to do not show that it was Resultly’s conscious objective to cause “impairment to the integrity or availability of” information on QVC’s server—even “some modicum” of harm.
More recent case law
In September 2019, the Ninth Circuit Court of Appeals ruled on a case titled HiQ Labs v. LinkedIn.
The case centered on HiQ Labs, a company that amongst other things scraped public LinkedIn profiles and combined the information from LinkedIn with additional details, then sold the new information to customers.
Orin Kerr, an expert of the CFAA, noted that the HiQ case is important because the Ninth Circuit viewed the CFAA as “a hacking statute,” meaning that accessing publicly available information does not violate the statute.
According to Kerr’s analysis:
Putting the cases together, the Ninth Circuit law right now seems to go like this. You can scrape a public website, and you can violate terms of service, without violating the CFAA.
Provided your access has not been terminated, scraping publicly available information does not appear to be within the scope of the CFAA, at least within the jurisdiction of the Ninth Circuit.
What does this mean for sports betting data?
The key takeaway is that while the terms “stealing” and “pirate” are catchy terms, there isn’t any indication that the people gathering this information are not engaging in theft, nor do the presented facts reveal the unofficial data providers are “pirates.”
In fact, supplying unofficial data appears to be another side of the data-brokering business.
There has been a great deal of hyperbole thrown around in the new world that is legalized US sports betting, but associating an activity viewed as undesirable with criminal acts appears to be unnecessary and unhelpful to advancing any measurable goals associated with integrity.