Friday, November 15, 2013

Sport must tackle betting-related corruption

Sport must do more to tackle betting-related corruption, heard delegates at yesterday’s Sport & Betting 2013, a conference jointly organised by World Sports Law Report, World Online Gambling Law Report, Cecile Park Conferences and DLA Piper. However, it cannot act in isolation and needs better help from gambling operators and regulatory tools in order to do this.

Delegates heard that sport needs help because the unregulated market dwarfs the regulated market, making it impossible for it to police. The unregulated market also accepts bets that regulated bookmakers would not take – either due to the size of the stake, or because the bet itself appears corrupt. However global regulation is improbable and, even if possible, is unlikely to solve the problem. “The standardisation of the legal framework across the world is a pipe dream, at best”, said Mike O’Kane, Business Director for Ladbrokes. “Sport needs to deal with this issue without seeking regulatory change”.

Ladbrokes, one of Great Britain’s largest regulated operators, pointed out that it is one tenth the size of the Hong Kong Jockey Club (HKJC), and that the HKJC is one tenth the size of the illegal Chinese gambling market. Delegates heard how between US$250 million and $1 billion is staked on the outcome of every Indian Premier League cricket match, and US$2 billion on India v. Pakistan cricket internationals through the illegal market.

Yet despite evidence that sport has a problem, it has often failed to act. “Sport should be the aggressor”, said Barry Hearn, Chairman of World Snooker. “There must be a zero-tolerance approach, backed by education and punishment. My approach now is purely to frighten people to death!” Andreas Krannich, of SportRadar, pointed out that once a player is involved in match-fixing, the fixers “will never, ever let go”.

Delegates heard how the Scottish Football Association (SFA) had failed to act following the discovery that several players held accounts with Ladbrokes, in contravention of SFA rules preventing players from betting on football. O’Kane pointed out that there had been little action since the publication of FIFPro’s Little Black Book in February 2012, which found that one third of Greek players had been approached by match-fixers and half of Russian players were aware of match-fixing in their league. “We need clarity from sport on its own governance”, he said. “The betting industry can’t continue to be blamed”.

Paul Scotney, Director at Sport Integrity Services and formerly of the British Horseracing Authority, said that often, the regulations are not adequate to prosecute match-fixers, meaning that the incentive to tackle match-fixing is not as great as it could be. “In this country, there have been no new prosecutions since the 1960s for cheating at sports betting”, he said. “The 2010 Cricketers were prosecuted for offences other than cheating at sports betting. The reality is that it comes back to sport to deal with the problem.” He also pointed out that certain operators are unhelpful in sharing information with sport.

It was pointed out that operators have no issue sharing information with regulators, however sharing information with sport can sometimes be an issue, as operators don’t know what sport is going to do with that information. Operators raised concerns about whether that information will be leaked to the media, and whether personal or sensitive data will be adequately protected.

The cost of investigating match-fixing was also raised. Delegates heard that at the first committee debate of the Gambling (Licensing and Advertising) Bill 2013-14 on Tuesday, it was pointed out that sport receives government funding of between £6 million to £7 million to combat anti-doping, yet doesn’t receive a penny for integrity issues. One potential solution would be for operators to return a percentage of takings to sport, as in France, where a ‘sports betting right’ has been created. Eighty-three percent of competitions in France’s five main sports utilised its ‘sports betting right’ in 2010. The right returns 1.1% of stakes to the sport involved. In 2010, this generated €530,000; in 2011 it returned €1.1 million; €1.5 million in 2012 and has generated €1.3 million during the first three quarters of this year. Operators – perhaps obviously – were not keen on this idea.

It was also highlighted that retrospective investigations are almost useless in stopping those behind fixing games, as they punish the athletes involved, not the perpetrators. “Retrospective investigations do not help tomorrow”, said Chris Eaton, Director of Sport Integrity at the International Centre for Sport Security. “Another approach is needed to investigate match-fixing as it happens. Perhaps the best model would be a self-regulatory cooperative approach from the totality of the sports betting industry, at a global level.”

One method of accomplishing this is by using technology developed for the betting industry. Andreas Krannich of Sportradar, a company that provides services to the gambling industry, explained how its Fraud Detection System has helped uncover instances of match-fixing in Australia and – just this week – in Austria. The system tracks real odds movements as compared to calculated odds movements at over 350 bookmakers, looking for discrepancies to identify over 300 manipulated matches every year. He pointed out that such a system, which involves information on 190,000 individuals, would not exist were it not for the involvement of the regulated operators, and explained that such a system has an advantage over early-warning systems, as it can track live betting as it happens, enabling sport to potentially void a suspicious game.

The potential for sport to do this was also picked up by Eaton and Hearn. “You have to starve them of money”, said Eaton. “To do this, you have to work cooperatively with the betting industry”. Hearn said that World Snooker had “taken a match out of play” on a couple of occasions. “Once you start doing this effectively, then there is no point fixing”.

Both sport and betting operators were clear that a ‘Code for Sports Betting’, similar to the World Anti-Doping Code’, is not a solution to this problem. “The WADA model is one that has been discredited in sport”, said Eaton. “It is too oppressive. Sport has begun questioning that approach and Thomas Bach and the IOC have indicated that they would like WADA to take a more service-based approach.”


• International policing is ill equipped to deal with match-fixing, as are local police, as they are jurisdiction based, unlike the fixers.

• There was a consensus that the global recession is likely to mean that the Chinese, Indian and US markets will open to sports betting as governments seek taxation revenues, but it will not happen overnight.

• The IOC is launching the pilot phase of its Olympic Movement Betting Integrity Reporting Mechanism at the Sochi 2014 Winter Olympics. It will continue to be used at the Rio Olympics, and monitoring of its success will take place in 2016/17.

• The European Sports Security Agency estimates the global sports betting of US$18.1 billion per year. China has global gaming revenue of US$10 billion, while the US has global gaming revenue of US$20 billion, 1% of which is regulated. Asia has global gaming revenue of $50 billion per year.

• Samantha Gorse, a researcher at the Centre for the International Business of Sport, pointed out that doping presents a match-fixing risk to operators, especially if people have inside knowledge of that doping.

• There are approximately 432 million sports betting odds movements per day.

• Sports betting is now the number one betting product in Spain, following its regulation.

• German sports betting operators are looking at challenging a 5% of turnover sports betting tax.

• Italy is set to license betting exchanges and betting on virtual events before the end of this year.

• The GB Gambling Commission has yet to address the issue of regulating use of inside information, despite the closure of a consultation into the issue. The Commission said that the appetite for a public debate on the issue was “not strong”; and that blanket rules were perhaps not possible without “killing the spirit” of some sports, such as horseracing.

• The GB Gambling Commission has yet to decide what should be done about sport-related spread betting. Spread betting is regulated by the Financial Conduct Authority, however there is a question about whether sports should be carved out, and the transfer of expertise in regulating sports spread betting to the Commission may mean that it is not worth the effort. This lacuna could present an integrity risk (e.g. it was discovered that spread bets had been taken about the number of cricketers coming out of the pavilion with sunglasses on their heads for some time).

Andy Brown


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