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Which Factors Favor Betting Related Cheating in Sports? Some Insights from Political Economy

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Match-Fixing in International Sports

Abstract

In recent years, cheating scandals connected with betting activity have shown to be a major concern for professional sports. From an economic point of view, such scandals threaten the integrity of sport and put the whole commercialization of this good (regarding e.g. sponsoring, broadcasting) in danger. This chapter the incentives for cheating connected to traditional and new bet types in the sports betting sector and how they might affect the behaviur of sportsmen, coaches, and officials. We develop a simple theoretical model and derive from it some political implications which we recommend, among others, for the ongoing reform of the German sports betting market. Our recommendations should contribute to an effective prevention of scandals like those unveiled in European football in the last years.

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Notes

  1. 1.

    In the German federal political system, gambling market regulation is part of the federal states’ (Länder) responsibility.

  2. 2.

    However, this ban on advertising was not always observed in practice, especially by state lotteries (Albers 2008). This considerably threatened the credibility of the state treaty.

  3. 3.

    See Rebeggiani ( 2010) for a detailed description of the evolution of turnovers and tax revenues before and after the implementation of the state treaty in 2008.

  4. 4.

    Decisions of the ECJ of the 8th September 2010 regarding the cases C-316/07, C-358/07, C-359/07, C-360/07, C-409/07, C-410/07 (Markus Stoss et al.), C-409/06 (Winner Wetten GmbH), and C-46/08 (Carmen Media Group Ltd). For an overview of the legislative procedure leading to the modified state treaty in 2012 see Rebeggiani ( 2011).

  5. 5.

    After elections and the formation of a new government in June 2012, Schleswig-Holstein joined on 8th February 2013 the regulation implemented by the other Länder. However, it is still unclear what will happen with the licenses already issued under the previous liberal regulation.

  6. 6.

    For an overview of gambling regulation reforms throughout Europe see Rebeggiani (2012).

  7. 7.

    Sponsoring in the face of match fixing scandals does not only suffer from diminishing spectators’ interest: few enterprises will be interested in engaging in a corrupt environment, thus reducing or withdrawing completely their sponsorships.

  8. 8.

    The issue of public financing of professional sports and sports mega events has been widely debated in the sports economic literature. See for an overview Coates and Humphreys (2008). Rebeggiani ( 2006 ) analyzes in detail the particular case of the FIFA World Cup 2006 in Germany: Even for this responsibly planned and well organized event, public subsidies amounting to more than half a billion Euro were necessary to co-finance the venues – plus other securities given by the government and the costs of infrastructure measures which were fully borne by public coffers.

  9. 9.

    This is e.g. the case in the very first article of the German 1. GlüÄndStV.

  10. 10.

    See IRIS et al. (2012), p. 6. According to this definition, some very prominent cheating cases are not included in the scope of this analysis. This is e.g. the case for the Calciopoli-scandal in Italian football (Boeri and Severgnini 2011), since it was not connected with betting activities.

  11. 11.

    Other economic contributions include Strumpf (2003), Wolfers (2006) as well as Winter and Kukuk (2008).

  12. 12.

    Indeed, the model by Forrest and Simmons (2003) builds on the seminal work by Ehrlich (1996), who provides a systematic analysis of criminal behavior from an economist’s point of view, based on “the assumption that offenders, as members of the human race, respond to incentives” (Ehrlich 1996, p. 43).

  13. 13.

    This assumption might be contested since agents involved in the sports market are expected to be rather risk prone. However, this would only increase the number of cheaters, not the mechanisms involved and thus the factors that favor cheating activities (Forrest et al. 2008, p. 10).

  14. 14.

    Seeking a higher living standard was the main reason Robert Hoyzer declared in his confessions for agreeing in match fixes.

  15. 15.

    AsTERiG also offers many modes of visualization, like scorecards or spider charts (see e.g. Clement et al. 2012, p. 722).

  16. 16.

    This value refers only to internet bets in the year 2012.

  17. 17.

    In continental Europe, where gambling regulation is usually stricter, these rates are even lower. In France, for example, rates of returns to wagers are by law set at 85 % of the stakes.

  18. 18.

    One example was the Davydenko case in 2007.

  19. 19.

    In principle, every sort of bet who finds a counterpart can be placed on such a platform.

  20. 20.

    While the bookmaker has to pay out the winnings to the (corrupted) punter, a betting exchange platform only charges a commission, while the loss is suffered by the bettor who holds the bet.

  21. 21.

    See Rebeggiani (2010), section “Theoretical Model” for a detailed discussion of the shortcomings of the old German regulation. Most of them apply to monopolistic regulations in other countries as well, as argued in Rebeggiani (2009).

  22. 22.

    Similar central gambling authorities exist in other European countries, like the AAMS (Amministrazione Autonoma dei Monopoli di Stato) in Italy or, for online games, the ARJEL (Autorité de Régulation des Jeux en Ligne) in France.

  23. 23.

    See the interview given by Dieter Althans to Spiegel Online (2013).

  24. 24.

    In “good old days”, gambling operators could more easily avoid risky betting types, e.g. in Great Britain by not accepting bets on single football matches (only combination bets on three matches were possible, see Forrest and Simmons 2003, p. 606). In times of internet and globalization, such strict limitations would only have small positive effects in preventing cheating behavior, because major frauds are organized through Asian operators. They would, however, negatively affect the affairs of European companies by reducing the attractiveness of their offerings.

  25. 25.

    See the Directive 2003/6/CE of the European Parliament and the Council of 28th January 2003 regarding the integrity of stock markets.

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Author information

Authors and Affiliations

  1. International Research Institute for Gambling and Gaming, Business Campus Rhein-Sieg GmbH Grantham-Allee 2-8, 53757, Sankt Augustin, Germany

    Luca Rebeggiani

  2. Bremen International Graduate School of Social Sciences, University of Bremen, Wiener Straße/Ecke Celsius Straße, 28359, Bremen, Germany

    Fatma Rebeggiani

Authors
  1. Luca Rebeggiani
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  2. Fatma Rebeggiani
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Correspondence to Luca Rebeggiani .

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Editors and Affiliations

  1. City University of New York John Jay College of Criminal Justice, New York, New York, USA

    M.R. Haberfeld

  2. Interpol Secretariat General, Lyon, France

    Dale Sheehan

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Rebeggiani, L., Rebeggiani, F. (2013). Which Factors Favor Betting Related Cheating in Sports? Some Insights from Political Economy. In: Haberfeld, M., Sheehan, D. (eds) Match-Fixing in International Sports. Springer, Cham. https://doi.org/10.1007/978-3-319-02582-7_9

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