Tag Archives: gambling

Risky Wagers: How Lack of Oversight Increases the Odds of Corruption in Sports Gambling

Posted on by
Reply

Thanks to the internet, sports gambling—once limited to smoky back rooms and local bookies—has rapidly expanded, and this expansion has fueled growing concerns over the integrity of professional sports. Sports gambling has long been intertwined with sports-related corruption, but the sheer number of gambling transactions made possible by the advent of online betting (through both legal and illegal websites) substantially increases the likelihood that bribery or match-fixing will be used to ensure a “winning bet.”

National regulatory approaches have not kept up with the heighted risks. The United States, for example, continues to rely on outdated regulatory regimes and ill-defined responsibilities shared between state regulators, federal regulators, and professional sports leagues. As more and more states move to legalize sports gambling, the US is in urgent need of a centralized authority that possesses the necessary incentives and requisite capabilities to properly regulate this burgeoning industry.

To see why reform is needed, consider each of the three main actors (or sets of actors) that have some responsibility to deal with the integrity threats posed by online sports gambling in the U.S.: state governments, the federal government, and the professional leagues: Continue reading →

Many U.S. States Are About To Legalize Sports Betting. How Can They Do So in a Way that Minimizes Risks of Sports Corruption?

Posted on by
1

Last May, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), finding the federal prohibition on sports betting unconstitutional. Accordingly, all states (not just Nevada) may now legalize sports betting. Excited about the potential revenue bump, a few states, including New Jersey and Delaware, have already passed legislation to open their doors to sports betting. Other states including Pennsylvania, New York, Mississippi, and West Virginia have sports betting bills pending in their legislature, and at least fifteen other states have introduced bills in some form. Unlike PASPA, a federal statute that provided a uniform application for nearly all states across the country, each state’s gambling laws will be unique to their state. And those lawmakers who are considering enacting gambling legislation are also trying to determine how to best regulate the industry—a complicated issue that requires balancing a number of difficult considerations, including: how the state should tax sports betting; whether the state should allow for in person bets only or also online betting; whether the state should permit access to bets with a higher risk of corruption, such as one-off prop bets; and whether the state should the state provide fees to leagues to assist them in corruption prevention. (See here for a discussion of these issues in New York).

While there is a debate in the anticorruption community about whether legalization of sports betting is good or bad for corruption, for those states that do decide to legalize betting, it’s important to do it in such a way that the black market for sports betting shrinks. States considering legalization must ensure that legal betting is a sufficiently attractive option as compared to sports betting in the black market. Otherwise, sports bettors will remain in the black market, which not only would pose numerous challenges for regulating corruption but also would lead to low revenues for states. Thus, at least for those states that choose to legalize sports betting in some form, the twin objectives of maximizing state tax revenue and preventing corruption (especially match fixing and spot fixing), often thought to be in tension with one another, are both advanced by maximizing the market share for legalized betting in their state, as opposed to limiting opportunities for betting.

To maximize market share and decrease corruption risk, states should include the following provisions in sports gambling legislation:

Continue reading →

Legalized Sports Betting in the United States: Analyzing the Impact of Legalization on Corruption Risk

Posted on by
4

The rise of corruption in sport has captured the attention of many anticorruption groups, including Transparency International and the United Nations Office on Drugs and Crime. Sports corruption takes many forms, but one of the most prevalent is match fixing, which occurs when players or officials alter the outcome of a sporting event in a way that benefits those who bet money on those “fixed” games.

In the United States, concerns about match fixing, among other things, led Congress to enact the Professional and Amateur Sports Protection Act (PASPA) in 1992. The Act prohibits most states from legalizing sports gambling, with only Nevada allowed to offer betting on single games. Yet PASPA failed to curb gambling on sports, mainly because bettors turned to the black market; each year, Americans gamble an estimated $150 billion-$400 billion in illegal sports betting.

PASPA appears to be in legal jeopardy: Last December, the U.S. Supreme Court heard oral arguments in the case of Christie v. National Collegiate Athletic Association (NCAA), and while a decision in the case is not expected until later this year, legal experts believe that the Supreme Court will invalidate PASPA. This would provide all 50 states with the opportunity to legalize and regulate sports betting in their state. With that in mind, it is important to consider the effects that legalized sports gambling may have on bribery in professional sports.

Continue reading →

How to Combat Match Fixing, the International Corruption Problem in Sports

Posted on by
10

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.

Continue reading →