Sports betting and corruption: How to preserve the - SportAccord

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Sports betting and corruption: How to preserve the integrity of sport But it appears from the review carried out by the authors of this study that scandals of this type have multiplied in recent years, while the sports betting phenomenon has simultaneously become more widespread, particularly thanks to online betting sites. We should therefore consider the specific features of sports betting and recent developments therein: what has been the impact of virtual sports betting (on the Internet)? Are there inherent risks in this new way of betting? Before the advent of the Internet, sports betting was organised according to methods determined by each state. Thus in the United Kingdom, licences have been awarded to bookmakers to offer fixed odds bets to domestic customers in shops or by telephone since the late 1960 s. In France, “Francaise des Jeux” had the monopoly on football pools, and then on the first fixed odds betting authorised in 2003. 1. The recent globalisation of the sports betting market By the end of the 1990s a large number of online betting sites had been set up independently of any state control. Profiting from the growth of the Internet, these sites began to extend their offering to Internet users across the world, without prior authorisation. According to a study carried out by Cert- Lexsi, an IT-watch institute, in 2006 71 , 80-90% of the 10,000 gambling sites present on the Internet have no valid licence. The formation in just a few years of this uncontrolled virtual market has put pressure on the various laws that govern betting activities at a national level. In 2005, the United Kingdom was one of the first countries to open up the market . France waited until May 2010 to propose regulating the market, and has now authorised 17 operators to market sports betting on the Internet, the management of physical sports betting remaining the monopoly of the Francaise des Jeux. Italy and Belgium also chose to regulate the market, and Spain and Denmark are on the point of taking the same route. At European level, sports betting is not covered by any specific text emanating from the European Commission. Legal precedents therefore derive from ECJ jurisprudence that, through a succession of decrees since the beginning of the 2000s, has established a series of European principles for the regulation of betting. Games of chance and gambling are considered to be services (and therefore subject to the freedom of establishment and freedom to provide services in the European Economic area), but states have the right to restrict them for overriding reasons relating to the public interest, primarily protecting consumers (guarding against addiction) and protecting public order (guarding against crime and fraud). In these cases, restriction by a state must be proportionate, consistent and systematic (non-discriminatory). Lastly, there is no mutual recognition between Member States in the matter of gambling. The fact that one operator has authorisation from one Member State does not prevent another state from prohibiting that operator or making its gambling offering subject to prior authorisation by that state. Today the geographic mapping of EU laws is most unusual. Despite some national restrictions, as in France and Italy where the sites of non-licensed operators are (theoretically) blocked by the regulators, 71 Cert-Lexsi, Gambling Cybercrime Study, July 2006 36
Sports betting and corruption: How to preserve the integrity of sport thousands of sports betting sites escape regulation and remain accessible to almost every Internet user throughout the world. A market of dizzying dimensions There are very few statistics that give an idea of the size of the worldwide sports betting market. It emerges however that a large part of this activity is illegal or takes place in countries where it is not (or very imperfectly) recorded. There are nevertheless a few sources that help us to appreciate the size of the betting market. H2 Gambling Capital 72 estimates that the total amount of bets placed on the Internet worldwide was close to 16.4 billion in 2004 and 32.6 billion in 2008, and the projection for 2012 is in the region of 50.7 billion. A number of factors contribute to this tripling in eight years including the increase in the rate of return to players, i.e. the percentage gamblers recover of their initial bet (winnings/outlay) and the increase in the average income of inhabitants of certain Asian regions, historically very partial to sports betting, even though it is mostly in Europe that the sports betting market has grown. Such figures must however be put in perspective, particularly because of the existence of practices that can artificially inflate the sums recorded. For example, many professional gamblers sometimes bet on a team or athlete and cover themselves by betting on their opponent as well, depending on how the odds develop. These bets are therefore added together in the overall context, although from the viewpoint of the individual gambler, they cancel each other out. However, these estimates do show changes in trends: at the moment there is regular growth. This increase in betting has taken place in parallel with a rise in odds (i.e. the rate of return to players), which is in effect a drop in prices (a bet pays more, so is cheaper). This has helped to attract more bets and gamblers. In fact, one of the traditional features of the betting market is the high elasticity of demand. In other words demand will change substantially if prices vary. The ever-increasing appeal of the betting offering has also fuelled the growth of the market and conversely, by virtue of the levels of rate of return offered to gamblers. The improvement in odds and gamblers’ profit Several studies have highlighted the increase in the rate of return to players in the betting market. Estimates by H2 Gambling Capital have been picked up by various protagonists such as the European Commission 73 and the Remote Gambling Association (RGA). The latter, in a report in 2010, indicates that operators margins dropped from 10% (against bets) in 2004 to 9% in 2008, and projects a margin of 8% in 2012 74 . The fact that margins have decreased simultaneaously with the increase in betting indicates that operators have been forced to drop their prices (increase the rate of return to players) to retain their clients. Using a random sample of 380 matches played in England s Premier League in the 72 RGA Report, Sports Betting: Legal, Commercial and Integrity Issues, Janvier 2010, p.9 73 European Commission, Green Paper on Online Gambling in the Internal Market, March 2011 : http://ec.europa.eu/internal_market/consultations/docs/2011/online_gambling/com2011_128_en.pdf 74 RGA Report, Op. Cit., p.9 37
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