Sports betting and corruption: How to preserve the integrity of sport STUDY Sports betting and corruption How to preserve the integrity of sport IRIS Pascal BONIFACE Sarah LACARRIERE Pim VERSCHUUREN Alexandre TUAILLON University of Salford (Manchester) Pr. David FORREST Cabinet PRAXES-Avocats Me Jean-Michel ICARD Jean-Pierre MEYER This publication was translated with the support of CCLS (Université de Pékin) Dr. Xuehong WANG 1 Sports betting and corruption: How to preserve the integrity of sport CONTENTS INTRODUCTION .............................................................................................................................. ..... 4 Three major examples of corruption in sport ...................................................................................... 9 linked to sports betting ........................................................................................................................ 9 I. The vulnerability of sport in the face of sports betting .................................................................. 14 A. Analysis of the players and methods of corruption in sport ...................................................... 14 1. Fraud in sport at grassroots level: the first level of corruption .............................................. 15 How is it possible to rig a football game? ................................................................................. 15 The adaptation of corruption in sport to different disciplines ................................................... 17 Sportspeople and corruption ...................................................................................................... 19 2. The role of the club and the federation: institutional fraud in sport ................................... 21 The classic model: rigging a match so that ones team wins, Buying a match ...................... 21 A new type of match-fixing arising directly from sports betting: ............................................. 23 Selling a match, or Who loses, wins .................................................................................. 23 3. Exogenous sporting fraud: criminal gangs outside sport ........................................................... 26 Money-laundering, a priority for large criminal organisations ................................................. 27 The wolf in sheeps clothing, or criminals taking control of clubs ........................................ 28 Corruption in sport ex nihilo: How to rig a match from the outside ......................................... 31 For the most powerful criminal organisations, .......................................................................... 34 the easiest way is to organise matches themselves! .................................................................. 34 B. The specific role of sports betting in corruption ....................................................................... 35 1. The recent globalisation of the sports betting market ................................................................ 36 A market of dizzying dimensions .............................................................................................. 37 The improvement in odds and gamblers profit ........................................................................ 37 New, increasingly attractive, types of bet ................................................................................. 38 2. Are these changes undermining the integrity of sport? ....................................................... 39 Betting on match details: a specific risk? .................................................................................. 39 Risks connected with live and exchange betting ....................................................................... 39 The Internet and the issue of gambler anonymity ..................................................................... 40 A sector with the allure of a totally deregulated financial market, where risks are inherent in the prospect of excessive profits ..................................................................................................... 41 2 Sports betting and corruption: How to preserve the integrity of sport 3. The danger arising from so-called “illegal” and Asian betting ........................................... 42 Is the Asian betting market responsible for corruption in sport in Europe? .............................. 42 4. Betting operators and fraudulent betting .............................................................................. 46 Professional gamblers ................................................................................................................ 47 Hedging risks, or covering the risk of fraudulent betting by a section of the market................ 47 II. The fight against corruption in sport linked to betting .................................................................. 50 A. Those involved in prevention and the interaction between them .............................................. 50 1. The sports movement ............................................................................................................ 50 2. Sports betting operators ......................................................................................................... 52 3. Public authorities ................................................................................................................... 53 B. Targeted action against those involved in corruption: from those at grassroots level to organised crime ................................................................................................................................. 54 1. Integration into the sports movement: information and deterrence ....................................... 55 Factoring risk into regulations ................................................................................................... 56 Factoring in risk by raising awareness among stakeholders ...................................................... 58 Factoring in risk by setting up dedicated structures .................................................................. 60 2. Strengthening investigation and sanction methods ............................................................... 61 In the face of transnational criminal organisations: ................................................................... 61 the need for intelligence and international police coordination................................................. 61 Punishing fraud in sport ............................................................................................................ 64 C. An action targeting the context of corruption: the global sports betting market .......................... 67 1. Regulating the offering: managing and monitoring bets ........................................................... 68 A concerted operation with the sports movement ..................................................................... 68 The issue of modes of betting that generate risks ...................................................................... 70 2. Controlling fraud ....................................................................................................................... 71 Monitoring systems ................................................................................................................... 71 The regulators role as an interface ........................................................................................... 78 The opportunity for a European approach to combat the illegal market ................................... 79 RECOMMENDATIONS .................................................................................................................... 82 3 Sports betting and corruption: How to preserve the integrity of sport INTRODUCTION “There will definitely be more rigged matches in future if the world of sport closes its eyes to them, and if we do not have good contact with betting companies and governments. Eventually the credibility of results will be called into question. Sport is based on a hierarchy that derives its social and moral values from the concept of merit. The winner should be the one who has poured the most lawful resources into their preparation or who has worked the hardest. If in future the concept of a champion as a model of excellence becomes tarnished by the manipulation of matches or the corruption of players, then the entire credibility of sport will vanish. (...) There are already countries where football competitions are no longer credible and where the public has very clearly lost interest in that sport.” Jacques Rogge, President of the International Olympic Committee (IOC) 1 March 2011 2011 was a year of unprecedented mobilisation in the world of sport to defend the integrity of sport in the face of the growing threat presented by criminal organisations that manipulate matches to enrich themselves and launder dirty money through online sports betting systems. The International Olympic Committee (IOC) established itself as the spearhead of the movement at its extraordinary summit on combating corruption in sport, which was held on 1 March 2011. Two months later, FIFA promised to allocate 20 million to help combat rigged matches, particularly by creating a cooperative structure with Interpol in Singapore. UEFA and the leading sports federations also opted for proactive measures to distance sport from the risk of corruption.