The Monitoring Systems of Sports Betting and Warning Mechanisms Between Public and Private Actors
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he monitoring Tsystems of sports betting and warning mechanisms between public and private actors BETMONITALERT HOME/2014/PPXX/AG/SPBX May 2017 IIRIS_2017_ID6-nbpCC2015.inddRIS_2017_ID6-nbpCC2015.indd 1 002/06/20172/06/2017 009:149:14 2 Published in May 2017 Copyright: copyright belongs to CK Consulting, STICHTING VU-VUmc (in English : VU-VUmc Foundation) and to the European Commission. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the permission of the publisher. The information contained in this publication is believed to be correct at the time of going to press. While care has been taken to ensure that the information is accurate, the publishers can accept no responsibility for any errors or omissions or for changes to the details given. Readers are cautioned that forward-looking statements including forecasts are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantifi ed and, consequently, the actual performance of companies mentioned in this report and the industry as a whole may differ materially from those expressed or implied by such forward- looking statements. Authors: CK Consulting and STICHTING VU-VUmc (in English : VU-VUmc Foundation) Publisher: CK Consulting IIRIS_2017_ID6-nbpCC2015.inddRIS_2017_ID6-nbpCC2015.indd 2 002/06/20172/06/2017 009:149:14 3 AUTHORS DIRECTOR OF THE BETMONITALERT PROGRAMME Christian KALB (Managing Director, CK Consulting, France). CO-DIRECTOR OF THE BETMONITALERT PROGRAMME Marjan OLFERS (Professor of sports and law at the VU University of Amsterdam (VU), PhD). EDITORIAL BOARD Pierre CORNU (Judge at the Court of Appeals, former Chief Counsel, Integrity and Regulatory Affairs, UEFA, former General Prosecutor, Switzerland). Pierre-Charles PRADIER (Associate Professor (MCF-HDR) of Economics, Paris 1 Panthéon- Sorbonne University, PhD, France). Norbert RUBICSEK J.D. (Managing Partner of RC3 & Partners Consulting, Former intelligence offi cer, Europol, Hungary). Mallorie TRANNOIS (PhD in private law, expert in gaming law, France). Tjeerd VEENSTRA (Former director of the Dutch lottery De Lotto, Chair Integrity Unit Dutch FA KNVB, The Netherlands). Pim VERSCHUUREN (Research Fellow, Precrimbet coordinator, IRIS, France). Laurent VIDAL (Professor (MDC-HDR), Paris 1 Panthéon-Sorbonne University, PhD, France). OTHER MAIN CONTRIBUTORS TO THE REPORT Benjamin BRAQUET (Expert in web marketing, Managing Director, Braquet Consulting, France). David FORREST (Professor of Economics, University of Liverpool Management School). Maryline OTTMANN (Research fellow, Master of International Institutional Communication, Institute of Political Science Diploma, France). Jean-Loup RICHET (Research Fellow, ESSEC Business School, Cybersecurity Offi cer Orange, Cybercrime Expert Europol, France). IIRIS_2017_ID6-nbpCC2015.inddRIS_2017_ID6-nbpCC2015.indd 3 002/06/20172/06/2017 009:149:14 4 EXECUTIVE SUMMARY The Betmonitalert Programme focuses on two main issues: • “Betting monitoring system” (any technical system which monitors a sports betting market in order to detect some irregular or suspicious sports betting activity possibly linked to the manipu- lation of a sports competition); • “Alert systems” (systems aimed at collecting, centralising and analysing information related to a possible manipulation of a sports competition in order to trigger a signal to different stakeholders). Main conclusions regarding monitoring systems: 1. There is no ideal betting monitoring system. 2. There are a few effi cient monitoring systems developed by various stakeholders such as Sportra- dar / FIFA / UEFA and GLMS (non limitative list). 3. These systems monitor a signifi cant number of competitions in the main sports offered for bet- ting (both pre-match and in-play), noteably football, tennis and basketball. 4. Some of these monitoring systems have developed sophisticated algorithms able to detect irregular betting activity with a low margin of error (cf. § 1.2.1.3 and § 2.3.1). 5. These algorithms can use direct (access to individual betting accounts) or indirect (access to amounts staked or odds changes) methods. 6. The rate of “false negatives” (betting patterns fl agged as “non suspicious” where in fact the sports competition has been manipulated) is signifi cant (cf. § 1.2.1.4 and § 2.5). For various rea- sons, monitoring systems cannot detect all the manipulations, in particular because there are some loopholes in the fi rst fi ltering (from irregular to possibly suspicious). This is the main weakness of the current monitoring systems. 7. The second fi ltering (from possibly suspicious to suspicious) of the most sophisticated monito- ring systems looks very effi cient. Therefore, the rate of “false positives” (betting patterns fl agged as “suspicious” where in fact there has been no manipulation) is very low (cf. § 1.2.1.4 and § 2.5). The probability that the given sports competition has been fi xed is then very high. That’s why effi cient monitoring reports can, in some cases, be used in disciplinary procedures to punish a sports organisation involved in the manipulation of a sports competition. 8. Monitoring reports can be of much help in criminal procedures, to start or to progress an investigation (cf. § 1.2.3.1). Nevertheless, considering the standard of proof used for criminal cases (beyond reasonable doubt), Law enforcement agencies need further evidence to prosecute suspects. 9. The monitoring of the betting market has become a business requiring important fi nancial (and sometimes human) resources. Some of the organisations involved in the fi ght against the manipulation of sports competitions spend an important part of their budget with no guarantee of detecting all suspicious activities, sometimes giving a lower level of priority to preventionand other investigative tools. A certain lack of coordination has been identifi ed among all the different initiatives in this regard (cf. recommendation n°13). IIRIS_2017_ID6-nbpCC2015.inddRIS_2017_ID6-nbpCC2015.indd 4 002/06/20172/06/2017 009:149:14 10. Monitoring illegal sports betting markets remains a main challenge. There are loopholes which 5 can be used to evade the non-intrusive tools of web analytics used to monitor illegal online bet- ting markets (cf. § 2.7.4). It is diffi cult to observe amounts staked with these betting operators and monitoring systems have to focus on odds changes. Nevertheless, the surveys conducted in the framework of Betmonitalert demonstrate that many renowned bookmakers still target citizens in countries where they have no authorisation. These operators are massively used by communities on the Dark Net, which use the full potential of technologies, including anonymity, means of pay- ments which are diffi cult to trace and insider information on supposed fi xed matches (cf. § 2.7.5). Main conclusions regarding alert systems: 1. There are different types of alert systems (cf. § 1.1.4 and § 1.2.2.1), depending on the number of staheholders involved (one or multiple) and the nature of the stakeholders (Law enforcement agencies1, betting regulatory authorities bettings associations or operators, sports organisations, etc.). 2. Most of the existing alert systems, and in particular the “national platforms” defi ned in the Council of Europe Convention on the Manipulation of Sports Competitions, have been created quite recently (cf. § 1.2.2.1). 3. In Europe, a group of national platforms regularly meets to share good practice and improve organisational, technical and legal issues. It is called the “Copenhagen Group” and includes ele- ven members at this stage, under the supervision of the Council of Europe. Some of its members have already set up their platform (for example Denmark, Finland, France, Italy, The Netherlands, Norway, UK), other are about to do it (Belgium, Germany, Spain, Sweden). 4. The exchange of information on alerts is crucial to facilitate prevention and early intervention, and especially to enable the prosecution of match-fi xing and/or disciplinary actions (cf. § 1.2.2.5). In the EU, regulation (EU) 2016/679 (General Data Protection Regulation, named GDPR) will be directly applicable in all Member States from May 2018, without the need for implementing in national legislation. 5. Since information collected by alert systems might be used in criminal or disciplinary procedures, its quality plays a key role (cf. § 1.2.2.2). The quality of information exchanged through Memo- randa of Understanding is very variable according to the stakeholders involved and their level of transparency. 6. The obligation of betting operators to report any suspicious betting activity in the framework of a clear standard is a key issue for national platforms and betting regulators in this regard (cf. § 1.2.2.3, 1.2.2.4 and 1.2.2.5). 7. It is diffi cult to assess the level of effi ciency of existing alert systems, simply because most of them don’t have a lot of experience and haven’t dealt with a lot of cases (cf. § 1.2.2.4). 8. At the moment, there are two different approaches regarding alert systems triggered by natio- nal platforms (cf. § 1.2.2.4). One approach is based on different escalation steps and a written procedure. This is the approach in France. Another approach uses a case-by-case methodology with some predefi ned criteria. The Sports Betting Intelligence Unit in Britain is a good example of this approach. 1 Law enforcement agencies: LEA IIRIS_2017_ID6-nbpCC2015.inddRIS_2017_ID6-nbpCC2015.indd 5 002/06/20172/06/2017 009:149:14 9. There is a huge gap between the number of alerts triggered by alert systems and the number of 6 convictions, both at criminal and disciplinary level (cf. § 1.2.4 and 1.2.5). 10. This situation is linked to the level of priority given by public authorities, and sometimes by sports organisations, to the fi ght against the manipulation of sports competitions. In many cases, there is a lack of human and/or fi nancial resources. Recommendations of highest priority according to Betmonitalert experts.