Corruption in sports betting (with emphasis on Australia)

The former President of the International Olympic Committee, Jacques Rogge, stated that corruption in sport motivated by the sports betting market “…is undoubtedly the biggest threat to sport after doping” (IOC, 2010, p.1). Sport is a growth industry, generating billions of dollars in revenue and providing thousands of jobs for Australians. However, with these large profits comes the opportunity for crime and corruption. Maennig (2002, p. 62) proffers that corruption in sport involves intentional or negligent perpetration of an illicit or unethical activity, whereby a course of action is chosen by an individual that promises the greatest benefit. In extension to this definition, Maennig (2005) explained that two different types of corruption in sport exist: drug-related, which aims to win a contest or “super-perform”; and betting-motivated, which aims to “mal-perform” or play to lose. With a clear division between drug- and betting-related corruption, Boniface et al. (2012, p. 6) provide a more specific definition of betting-motivated corruption, stating that it involves the “manipulation or attempted manipulation of a result or aspect of a game with the aim of enrichment on the sports betting market.” Much of the current literature on betting-motivated corruption in sport suggests that internationally and in Australia the predominant forms of corruption are match-fixing, spot-fixing, and the exploitation of insider information (ACC, 2013; Boniface et al., 2012).

Match-fixing involves a team or individual player playing to lose a match in order to obtain financial gain through the betting market (Gorse & Chadwick, 2011). For example, the most prevalent match-fixing scandal in Australia involved the Victoria Premier League football team, Southern Star FC, where the abnormally poor performances by a number of the team’s imported international players resulted in the loss of five matches in 2013 (Bricknell, 2015). These losses were linked to irregularities in the betting market, which resulted in a Hungarian and Malaysian-based Transnational Organized Crime (TOC) group profiting up to AU$2 million (Herald Sun, 2013). Match-fixing, as claimed by Hosmer-Henner (2010), threatens the integrity of sport as spectators may believe that all matches are staged and therefore lose interest, which ultimately leads to a decline in revenue. Currently there is limited literature on the nature and extent of match-fixing in Australia; however, there have been a small number of reported cases, signifying its existence. Internationally the rise of match-fixing has gained considerable attention from both authorities and researchers. For instance Wolfers (2005), in a study into how widespread match-fixing is, found that over 16 seasons of US college basketball games, 1% of games were subject to betting-motivated corruption. Similar findings were also reported by Forrest (2012), who claims that approximately 1% of all European football matches per season are affected by corruption.

Another form of corruption in sport is ‘spot-fixing’, which has emerged from the growth of sports betting in which technology has created an increase in the number of activities/events that a punter can now bet on within a match; it is no longer just a matter of betting on the winner. Spot-fixing occurs when a wager is placed on a specific activity/event during a match, and corrupt individuals stage this event during the game to win the bet. For example, a corrupt player could stage a no-ball in cricket during an over for the purpose of a bet (Anderson, 2011). Compared to match-fixing, this form of corruption is argued to be an increased threat to sports integrity. Rompuy (2015, p. 17) supports this by stating that spot-fixing is easier than fixing a match, it can be carried out by a single individual, and causes less “moral hesitancy” for the persons involved. Further to this, Rompuy also found that, in reality, spot-fixing in Europe associated with TOC groups was a decreasing risk as the market for exotic and micro-bets has low liquidity, where a large bet placed on a market with low liquidity attracts suspicion among betting regulators. However, the consequence of this is that individual players, referees and others involved in sport are at an increased risk of conducting their own spot-fixing activities. While Rompuy has examined this issue in Europe there is limited commentary regarding the nature and extent of spot-fixing in Australia.

The exploitation of insider information is also a key threat to the integrity of sport. Palmer (2014) states that individuals may have insider information on a particular subject, for example a person knowing a star player is injured and placing a large bet on the team to lose before the injury is made public. Misra, Anderson, and Saunders (2013) reported a case of using insider information for betting purposes committed by an AFL player who used club information regarding a player moving to a different position for a match, therefore increasing the likelihood of the player scoring the first goal. From the present literature on the use of insider information the majority of studies in Australia and worldwide have been on sports that are commonly bet on, such as AFL, rugby league, and cricket, rather than sports such as swimming and athletics. Furthermore, there is limited examination of the difference in exploitation of insider information between limited and highly-funded betting markets such as swimming and rugby league.

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