The recent rise and prevalence of corruption in sport has drawn the attention of the international community. As Transparency International highlights in their 2016 report, professional sports not only engage billions of people worldwide, but also involve significant amounts of money. Such corruption thus creates tremendous societal and economic burdens. Match fixing is one form of corruption that has impacted a wide range of sports, including tennis, cricket, soccer, boxing, basketball, and baseball all within the last year. This problem not only permeates low-level games, but also impacts high-profile events such as World Cup qualifiers, European Championship qualifiers, and even Champions League Games.
On the surface, it may seem as though match fixing is a victimless crime, or at least one that’s not sufficiently serious to attract the attention of anticorruption advocates. Yet because match fixing scandals have implications that stretch far beyond the playing field, the anticorruption community should care about this problem for at least two reasons. First, as previously discussed on this blog, corruption scandals in sports are highly visible, and corruption in sports can attract public attention in ways that other corrupt activities cannot. Second, match fixing facilitates organized crime and other corrupt activities. Organized criminals engage in match fixing because it is a low-risk enterprise with the potential for large rewards from unregulated betting markets.
A recent report by the United Nation Office on Drugs and Crime investigated match fixing and tried to understand some of its underlying causes. The report cites a number of factors that have allowed this threat to grow, including “personal greed, weak governance structures of sport as a sector, easily accessible global betting markets that are open to exploitation, low prioritization of match fixing as a threat by law enforcement agencies and the use of sport by organized criminals to advance their own interests.” In attempting to address these causes, 28 countries have proposed, adopted, or enacted specific legislation criminalizing match fixing. Yet even in those jurisdictions where such sanctions exist, regulations have been ineffective. Unfortunately, the complicated transnational nature of sports betting makes it difficult for regulations to prevent match fixing in an effective way. Proving that match fixing occurred requires collection and analysis of a substantial amount of betting evidence, which is particularly difficult to obtain in unregulated betting markets. Furthermore, despite the presence of regulations, significant financial incentives continue to pressure athletes to participate in match fixing.
Therefore, given the inherent difficulties with controlling such behavior, there are two things that can be done to more effectively deter match fixing.
- First, legalize sports betting and make gambling information widely available. According to estimates provided by the International Center for Sport Security (ICSS), the global sports betting market is worth $1.5-2 trillion, but only 15 percent of this market is legal and visible to regulators. The remaining 85 percent of the market comes out of underregulated areas that spawn the majority of match fixing and betting fraud. In countries where betting is legal and the markets are regulated, including Australia, Ireland, and the United Kingdom, prosecuting match fixing has been successful, in large part due to easier access to betting evidence. With available betting evidence, investigators are able to track price movements of bets, observe disproportionately high amounts of money placed on a certain game, and even track unusually high payments by frequent gamblers. The data provides prospective and retrospective benefits by allowing authorities to flag potential corrupt actors through monitoring and providing evidence to prosecute actors based on previous bets. These tracking techniques and information are simply not feasible in countries where betting markets are illegal and unregulated.
- Second, activists should focus resources on market forces. Where systems have failed, market pressures provide strong deterrent effects for players and leagues to not engage in match fixing. These forces, specifically fans and corporate entities, can force leagues to institute better internal controls more quickly by hitting the leagues where it hurts the most: their bottom lines. The Taiwanese boycott of baseball is perhaps the most well-known instance of fans shutting down a corrupt sports league. In 2008, the Taiwan Criminal Investigation Bureau investigated 102 illegal betting cases involving 222 people. Following the publicity of the betting scandals, attendance in Taiwan fell by over 80%. The number of teams in the professional league fell to only four, as the other teams were forced to shut down because the ticket sales were their main source of revenue. Corporate sponsors and other commercial partners can similarly use their power and influence over leagues to bring about change faster. When corporate sponsors are affiliated with a league that experiences corrupt match fixing, such activities can have serious impacts on the goodwill of that company. ING, for example, terminated its sponsorship of the Renault Formula One team after a race-fixing incident was exposed at a 2009 grand prix. A similar boycott occurred following allegations that international friendly matches held in the South Africa were fixed prior to the FIFA World Cup in 2010. The South Africa national team’s sponsor Puma ended its financial relationship with the country’s football association. Revenues for the association dropped from $80 million in 2010 to $20 million in 2013 following the scandal. Of course, not all boycotts will be this effective. In popular leagues such as those in the United States, it is unlikely that a boycott by fans will be large enough to shut down teams. However, these market forces can at least encourage leagues to implement stronger institutional controls more quickly than otherwise by affecting the leagues’ bottom line.
While corruption in sports has become increasingly important to the anticorruption community, incidents of match fixing continue to rise. Until changes are made that reflect a sufficient understanding of the motivations for participants, match fixing scandals and the questions regarding the integrity of sport will continue to persist.
Very interesting! I agree, as you point out, that the high visibility of sports corruption makes it a key – perhaps even low-hanging – target to make inroads, even if inroads towards public perception of the extent of corruption. I’m definitely in favor of finding ways to better expose where and how match fixing is happening.
Even so, the idea of legalizing sports betting based on the rationale of enabling better evidence gathering (if I understand the point correctly) seems a blunt instrument. I don’t think I have a defined opinion one way or the other on whether sports betting should or shouldn’t be legalized and regulated, but I also think there are many strong opinions on the subject. The prospect of better evidentiary support for instances where match fixing happens sounds like a good reason in favor, but I doubt that alone would support a push for legalization.
In addition, I wonder if legalization would just push match-fixing bets underground. Obviously it would be much less profitable to do match-fixing related bets on a black market where a large regulated market exists, but if the risk of detection is high, it could still make sense.
Thanks for your comment! I agree that better evidentiary support alone will not result in the legalization of sports gambling. However, in the United States, for example, there has been a recent push for legalization for reasons other than preventing match fixing. Hopefully the potential benefits articulated in this post will be an additional factor that legislators consider when thinking about this issue.
With respect to the “black market” idea, I acknowledge that it’s possible for gambling to happen outside the regulated markets. However, bets require two parties: someone to make the bet and someone to accept the bet. My assumption is that individuals not participating in match-fixing schemes will want to avoid those markets, fully aware that people who want to make bets on the black market (as compared to regulated betting markets) may be more prone to match fix.
Reblogged this on Matthews' Blog.
What measures have worked to cut down on match fixing in the past? Wasn’t it quite common in professional baseball- why and how did that change?
Why do you think that boycotts of teams wouldn’t catch on in the US as they did in Taiwan? Is the idea that there will always be people who want Patriots tickets, even if it turns out they cheat?
First, I think a number of factors played a part in cutting down on match fixing in the United States, one of the only countries where match fixing (at least on the surface) appears to be a non-issue. You are right in saying that it used to be common in baseball- famous cases include the Black Sox scandal, and the indefinite suspension of Pete Rose (though he argues he never bet against his own team). I think the combination of increasing salaries and strong deterrence remove changed the players’ cost/benefit analysis to fix matches. The possibility of a permanent ban, in the only league (MLB) that had high salaries in the world, was too great to participate in such schemes. In other leagues across the world, I don’t believe that players are paid high enough salaries for the same effect to take place.
In terms of boycotts catching on in the US, I have difficulty seeing a scandal scaring enough fans away to shut down teams, as was the case in Taiwan (like the Patriots reference that you make). However, perhaps enough fans would boycott such that ticket prices would drop, and owners’ bottom lines would be affected. I see that force, change to internal controls through the owners actions, as a little different than what happened in Taiwan, where fans’ actions directly shut all but four teams in the league.
Hi Jimmy, you might find our recent paper on potential match-fixing in the German Football Bundesliga of relevance: https://ideas.repec.org/p/ppc/wpaper/0008.html
Many thanks for sharing your paper. It is absolutely on-point to the discussion, and congrats on an excellent paper.
an interesting and timely piece, I am currently teaching an undergraduate class in Australia on Corruption in Sport and the topic for last week was gambling and match-fixing, and how the two inter-relate. The conclusion aligned closely (but not perfectly) to yours.
Legal gambling does assist with revenue raising, enforcement and consumer protection, but the Australian market is closely regulated leaving certain options firmly prohibited – particularly internet gambling. Spot-betting (or micro-betting) on events within matches are prohibited because they create a higher vulnerability for match-fixing – a single no-ball in cricket, causing a penalty in football etc. While such betting is prohibited, the sports remain vulnerable because of off-shore internet betting houses.
Decriminalisation of spot-betting was recently considered, but rejected by the Australian government (see https://www.dss.gov.au/communities-and-vulnerable-people/programmes-services/gambling/government-response-to-the-2015-review-of-the-impact-of-illegal-offshore-wagering and https://www.dss.gov.au/communities-and-vulnerable-people/programmes-services/gambling/review-of-illegal-offshore-wagering), as the vulnerabilities out-weighted the ability of (legal) gambling houses to detect such offences. In short, decriminalisation of sport gambling should be a staged and considered process, not a free-for-all.
On your second point – where activists should target, I fully agree (and will be discussing the Taiwan case in later classes).
Thank you for you comment- I wish I had the opportunity to take your class.
One thing that you mention that I had not fully considered is the relationship between spot fixing and match fixing. I agree that spot-fixing is even more vulnerable than match-fixing, and poses separate but similar problems. On the one hand, by prohibiting spot-fixing, a black market would likely still exist (including the off-shore betting houses that you mention). On the other other hand, if spot-fixing is also legalized, I’d be curious if regulators would be able to sufficiently track such activity given the infinite number of possible spot-fixes. Perhaps spot fixing is an area that legalization would have little impact on prevention.
You’ve posed two interesting solutions on the post-match fixing side, but there must be solutions to prevent match fixing before it happens (besides just deterrence from increased enforcement.) I’ve read accounts from tennis players that make it seem that they had very little idea what they were getting into, and found themselves on a slippery slope – would athlete education make any difference? Should match-fixing information be included with anti-PED information that athletes receive? I know other tennis players have gotten involved because you can make a lot of money by fixing even extremely low-level challengers matches, where players at that level struggle to pay for equipment, coaching, travel, and physios. Maybe a redistribution of how prize money is awarded could reduce the incentives for players to co-operate with match fixers – although as Kaitlin pointed out above, that is a blunt instrument.