The Perils of Over-Criminalizing Sports Corruption

Although the fight against corruption has traditionally focused on corruption in government, the anticorruption community has started to pay more attention to corruption in other spheres. One particularly prominent concern is corruption in sports (see herehere, and here). The topic of sports-related corruption includes not only corruption in the major sports associations (think FIFA and the International Olympic Committee), but also the corrupt manipulation of individual sporting events in order to win bets (whether legal or illegal). Such corrupt manipulation includes match-fixing (where corrupt actors fraudulently influence the outcome of a game); spot-fixing (where wrongdoers seek to influence events within the game that do not necessarily have a significant effect on the final outcome, such as the number of minutes an athlete plays or timing the first throw-in or corner in a soccer game); and point-shaving (where perpetrators seek to hold down the margin of victory in order to avoid covering a published point spread).

Different jurisdictions approach this sort of sports corruption differently. Many countries in Europe have enacted blanket laws criminalizing match-fixing in order to uphold the integrity of sports. The United States, by contrast, takes a narrower approach: The relevant criminal laws targeting sports corruption in the U.S.—both the Federal Sports Bribery Act (the “Act”) and comparable laws at the state level—focus solely on bribery. Furthermore, the Act has historically been used to prosecute individuals involved in paying bribes or inducing others to collect bribes, but not the people (usually athletes, coaches, or officials) who receive the bribes. Although a great deal of corruption in sports involves the payment of bribes, and would therefore be covered by these laws, some types of sports corruption are unilateral: An athlete or sports official may place bets on sporting events and subsequently undertake behavior to win those bets. For this reason, some scholars have argued that the U.S. should close this loophole by criminalizing such unilateral conduct as well.

I disagree. To be sure, unilateral sports corruption is unethical, and criminalizing it would help to prevent athletes, referees, and coaches from engaging in corrupt acts that jeopardize the integrity of sports. But the benefits of criminalizing this form of misconduct are minimal and are greatly outweighed by the corresponding costs.

  • First, while unilateral sports corruption is a problem, it is a relatively low magnitude offense. Sports leagues and sports betting are forms of entertainment, and while corruptly influencing sporting events is not harmless, the social harm is far less serious than the social harm associated with other forms of corruption, for example in health care, education, or securities markets. My point is not that unethical unilateral conduct should be excused or ignored, but rather that the heavy artillery of the criminal law—and the substantial investment of public resources in policing this sort of misconduct—are incommensurate with the relatively low social harm at issue. Using taxpayer dollars to monitor, investigate, prosecute, and incarcerate individuals accused of corrupt unilateral sports betting-related conduct would require many taxpayers to fund the regulation of an industry that has little or no relevance to their livelihood.
  • Second, using the blunt force of the criminal law to tackle a relatively minor problem can result in non-trivial harms. For instance, criminalizing unilateral sports corruption may (at least in the United States) have a disproportionately negative effect on African American athletes, who make up the majority in most professional and collegiate sports. It is already the case that African Americans are disproportionately likely to be wrongly accused and convicted of criminal wrongdoing, so it is not difficult to imagine a scenario where criminalizing unilateral sports corruption would lead to African American athletes not only being disproportionately scrutinized, but often falsely accused and convicted of engaging in corrupt unilateral conduct. 
  • Third, criminalization is unnecessary to address the problem of unilateral sports corruption by individual athletes, coaches, and referees, because the sports leagues can adequately handle this problem themselves. The leagues can monitor and investigate potential misconduct, and can impose penalties on wrongdoers, including suspension or expulsion from the league. These are not criminal penalties, but they could result in substantial financial and reputational losses to those punished, and as a result such league-imposed sanctions have a powerful deterrent effect. 

Now, my argument may seem to imply that current criminal laws against sports corruption involving bribery also go too far. But that is not the case. For one thing, the social harm associated with bribery-related sports corruption may be substantially larger, because of the involvement of organized crime groups in large scale sports betting-related corruption. For another, concerns about racial disparities in the burden of criminal laws apply with substantially less force in the context of those who pay or facilitate bribes. And of course, the sports leagues themselves lack the ability to punish the outside parties who pay bribes to athletes, coaches, or officials. For these reasons, the current U.S. approach strikes the right balance. Criminalization of those who pay or arrange bribes to influence sporting events is appropriate, but unilateral corruption by athletes, coaches, or officials should be addressed through means other than the criminal law.

18 thoughts on “The Perils of Over-Criminalizing Sports Corruption

  1. Hi Ubong! Thanks for this post. We often think that harsher penalties are the best solution to stop corruption but you point out very compelling reasons why that view isn’t always correct. I’m curious about how we should think about this problem of over-criminalizing in the context of the exponential increase in online sports betting (which can be in the millions and billions of dollars in the United States). Do you think that sports leagues can adequately monitor conduct even in the online context? If not, is this harm is still relatively small in comparison to the enforcement cost that we should just stay the course?

    • Yes. I believe that sports teams can adequately address this issue. I would recommend that they allocate a substantial percentage of their annual budget to a committee tasked with undertaking such actions. As far as the online component, sports leagues will have to work with betting operators to gather and investigate data indicating unusual activities.

  2. Your argument around the balance of criminal v. private sanctions in U.S. law is really thoughtful. I wonder whether the criminal law should extend to coaches or others in a position of authority who corrupt college athletes. It would seem like college athletes need/deserve more protection than professional colleagues, particularly against those who have power over them.

    • Your intuition is correct Sam. The Federal Sports Bribery Act is applicable to everyone including coaches and athletes themselves. Thus, if an athlete bribes a teammate, they are subject to criminal sanctions. My argument centered on unilateral conduct taken by a player or coach.

  3. Though I’m sure it would be incredibly difficult to get the data on this front, I’m wondering if something that could bolster your argument is comparing the magnitude of unilateral sports corruption with those done by criminal organizations or sports federations. There’s something to be said about the many other reasons in addition to fearing criminal penalties that would surely suppress athletes accepting bribes (suspension from the sport, reputational penalties) that aren’t mirrored by other actors in betting corruption.

    • When you say mirrored by other actors, are you implying that the Federal Sports Bribery Act would not sufficiently apply to them?

      • Less referring to the legal penalties imposed by the Act and more about the societal pressures that uniquely punish athletes rather than their managers or other actors. For example, an organized crime boss paying a bribe wouldn’t be subject to the same practical consequences as an athlete or a coach would in the event that the illicit activity comes to light. Where an athlete might be kicked out of the game entirely (and therefore maybe out of her livelihood), said boss would only face the penalties outlined by the Act. I’m only wondering if this difference in practical treatment might result in different behavior– would athletes engage in match fixing less?

  4. When you say mirrored by other actors, are you implying that the Federal Sports Bribery Act would not sufficiently apply to them?

  5. Thank you for this post, Ubong! I totally agree with the argument that sometimes criminal law is not the right and most efficient regulation to use. I believe this is the perfect example of that. I agree with you that the use of taxpayer’s money should be saved more serious matters than this one. My question would be whether you would agree with a proposal establishing that there is a specific regulation that asks the leagues to allocate certain percertange of their revenues *to give one example) to the supervision you propose on your third point. Or maybe you think it is better to give leagues total freedom regarding this matter as this is a matter that has little implication in the public arena?

    • Yes! I think that mandating the league to create and fund an anticorruption body is a great idea and I would welcome it. That way unilateral corruption can be dealt with in-house but if the league discovers corruption serious enough to warrant government intervention then they would be required to contact the government. This would ensure that the corruption body is funded by the league themselves using the monies from individuals who watch, play or participate in sports in some way.

  6. Interesting post, Ubong! Two points –

    First, is the diffuse nature and social harm of the crime a meaningful enough principle to distinguish sports betting from securities markets? Yes, sports may be considered entertainment, but in much the same way that some people bet big in securities, others bet big on sports games. If someone stands to lose their money to bribery, surely the avenue doesn’t matter? This also strikes me as a slippery slope – couldn’t we use the same argument to say the weight of criminal prosecution shouldn’t be thrown behind financial crimes below a certain amount or in one-off arenas because those too may have lower social harm?

    Second, how much faith should we place in sports leagues to guard against corruption? From soccer to cricket, the leagues themselves have been a far cry from clean watchdogs. I am skeptical the incentives are right for them to be the sole authority we trust.

    • I wholly agree with Disha, even though I concur with your major point, Ubong, that criminalization seems to be a poor tool to address sports corruption. Not only do people bet big on sports games, but sports plays a central role in American culture and economics. Beyond the realm of betting, teams rake in funds from merchandising, ticket sales, etc., and athletics is closely tied to major American institutions, including most colleges and Universities. The ramifications of match-fixing have ripple effects for all of these entities. To that end, I think that corruption in sports should be treated seriously. To that end, it might be more efficient to have independent bodies tasked with investigating corruption and match-fixing within the relevant leagues and competitive bodies. Because leagues presumably have vested interest in maintaining perceptions of fairness and equity in their competitions, they may have incentives to ignore or obfuscate corruption (or at least, lower level corruption) when it occurs.

      • I hear your point Mayze and understand why you may welcome the use of the criminal legal system to penalize unilateral corruption in sports but similar to the point I made to Disha merchandising, ticket sales, etc. are not really tied to the livelihood of Americans. To give you an example, my parents and many of my friends and close relatives do not watch sports, buy sporting merchandises or contribute in any way to that system. Alternatively, they have 401k’s, healthcare plans, and employers that are heavily dependent on investments from securities. So, in simple terms, the magnitude of sports to the livelihood of Americans does not come close to the financial market. As far as the economics component is concerned, the total market capitalization of the U.S. stock market is approximately $50 trillion. Whereas the total market size of sports in North America as a whole is $71 billion. They are disproportionately unequal.

        To your point about establishing an independent body, I find it difficult to support it especially if individuals similar to my parents, friends and relatives are inadvertently on the hook for funding such body through the payment of taxes.

    • This is a good point Disha but I think that the magnitude of financial crimes is FAR worse than betting on sports games. Frankly, trading securities is not akin to gambling. Gambling on sports is purely for entertainment whereas the success of the US economy in many ways is dependent on the continued growth of private companies. This means that the entire nation’s livelihood is heavily dependent on ensuring that private companies have access to capital to continue creating solutions to drive innovation and solve many intractable problems we face as a society. Hence why many individuals and institutions invest (not gamble) in securities.

  7. You mention that athletes or sports officials may place bets on their own sporting events, but surely there are league penalties for doing so, correct? I can’t imagine any league allowing its athletes or referees to bet on the outcome of games in which they participate (even if the bet isn’t technically illegal). Assuming such a rule exists, I wonder how far it extends. Can family members of participants place bets? I would think any such rule could be easily sidestepped, however, by involving betters not easily connected to the athletes/officials.

    • Thanks for the comment Jenny. Yes, some leagues have rules against such actions and can clearly determine when a player places bets on league games. As far as how far it extends is a tricky one. To ban a player’s family member from betting may be unfair and yes the fact that betters not easily connected to the personnel can be used makes it difficult to determine when an athlete commits unilateral corruption.

  8. Pingback: Episode 246, week ending April 2, 2021 – the GWICies edition | The Compliance Podcast Network

  9. Pingback: This Week in FCPA-Episode 246, week ending April 2, 2021 – the GWICies edition - Compliance ReportCompliance Report

Leave a Reply to Sam Magaram Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.