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PALGRAVE PIVOTS IN SPORTS ECONOMICS
An Economic Roadmap
to the Dark Side of Sport
Volume III: Economic Crime in Sport
Wladimir Andreff
Palgrave Pivots in Sports Economics
Series Editors
Wladimir Andreff
Emeritus Professor
University Paris 1 Panthéon-Sorbonne
Paris, France
Andrew Zimbalist
Department of Economics
Smith College
Northampton, MA, USA
This mid-length monograph series invites contributions between
25,000–50,000 words in length, and will consider the economic analy-
sis of sports from all aspects, including but not limited to: the demand
for sports, broadcasting and media, sport and health, mega-events,
sports accounting, finance, betting and gambling, sponsorship, regional
development, governance, competitive balance, revenue sharing, player
unions, pricing and ticketing, regulation and anti-trust, and, globali-
zation. Sports Economics is a rapidly growing field and this new series
provides an exciting new publication outlet enabling authors to generate
reach and impact.
An Economic
Roadmap to the Dark
Side of Sport
Volume III: Economic Crime in Sport
Wladimir Andreff
Centre d’Economie de la Sorbonne
University Paris 1 Panthéon-Sorbonne
Paris, France
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Switzerland AG 2019
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction
on microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and
information in this book are believed to be true and accurate at the date of publication.
Neither the publisher nor the authors or the editors give a warranty, expressed or implied,
with respect to the material contained herein or for any errors or omissions that may have
been made. The publisher remains neutral with regard to jurisdictional claims in published
maps and institutional affiliations.
This Palgrave Pivot imprint is published by the registered company Springer Nature
Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Introduction
This book focuses on the economic facets of the dark side of sport and
warns against those manipulations, dysfunctions, distortions, and crimes
triggered by economic interests or even naked greed in sports. It gathers
publicised facts and cases referring to economic manipulations and build
up a typology of sport manipulations which makes sense from an eco-
nomic standpoint.
The book is divided into three volumes. Volume 1 shows that sports
ethics and integrity are at bay as soon as economic manipulations, dys-
functions, and distortions breach the sports rules, violate managerial
rules and the law, and infringe human rights in sport.
Volume 2 is about corruption in sport and focuses on those manipu-
lations and misbehaviours that nurture decisions significant influence on
sporting outcomes such as match-fixing and on sport (economic) devel-
opment such as corrupting sports governing bodies.
Volume 3 deals with the most economically significant manipula-
tions which definitely jeopardise the future of current modern globalised
sport, that is rigged online sport betting and doping. These are usually
referred to as economic crime in sport and their unveiled perpetrators are
often sentenced as criminals. This is the darkest side of sport that seri-
ously threatens sport integrity and credibility in the long run. The four
chapters attempt at going deeper into economic analysis of these two
major threatening overheads on nowadays sport. Cases of doping started
invading the newspapers’ headlines, and the courts to a lesser extent,
v
vi INTRODUCTION
vii
viii CONTENTS
Index 121
Acronyms
xi
xii ACRONYMS
xiii
List of Boxes
xv
CHAPTER 1
With economic globalisation and the Internet, online sports betting has
become predominant. The evolving betting environment has raised risks
to the integrity of sport. However, with globalisation of the economy
on the one hand and, on the other hand, the Internet-isation of betting
these kind of risks have tremendously increased because now the major
part of a global sport betting market is operating online. Now bettors
can shop around bookmakers worldwide and bet at any second of time.
It is more complex for potential fixers to evaluate the costs and bene-
fits to them of engaging in manipulations of sporting events on the field
for betting gain (Forrest et al. 2008) but it is even more complicated
to detect them in operation. Global criminal networks that take part in
online rigged betting related to match-fixing are extremely difficult to
trace, discover, crackdown, and sue in court. Particular markets and sit-
uations are especially susceptible to corruption such as increased betting
market liquidity, situations where the probability that the fix will be both
successful and undetected is very high while the probability of detection
lowers on online betting-related match-fixing global black markets.
This chapter briefly sketches how the Internet and economic glo-
balisation have increased complexity in a globalised economy and have
triggered a skyrocketing growth of online sports betting alongside with
much more opportunities for rigged and fraudulent bets.
Online sport betting is only part and parcel of the increasing complex-
ity of an entirely globalised economy (Andreff 2017). Complexity is
neither a concept nor an approach used in standard mainstream econom-
ics. However, in recent years the emergence of complexity economics
is to be noticed though this new analytical framework is still in the cra-
dle. Analysts of economic complexity attempt to bring forward a better
understanding of increasing complexity in the real world of a globalised
economy which is typically exemplified here by online betting-related
match-fixing.
1 See 2.2.1 for the distinction between legal and illegal sport betting markets.
1 GLOBAL CRIMINAL NETWORKING IN SPORT: ONLINE BETTING-RELATED … 9
legal operators, namely when they are public monopolies, tend to retain
a greater proportion of stakes, the share of the illegal sector in stakes is
much higher than in GGR, about 82%.
H2 Gambling Capital estimated the total amount of sport bet-
ting outlays on the Internet to €16.4 billion in 2004, €32.6 billion in
2008, and €52.7 billion in 2012 (Boniface et al. 2012). This increase
in sport bets consumption came alongside with an increase in the RRP
which corresponds to a decrease in the price of a bet. The operators’
average margin decreased from 10% in 2004 to 9% in 2008 and 8% in
2012. Operators were compelled to decrease prices (increase RRP) to
keep their clients in an increasingly global competitive market for sport
betting.
The Sorbonne-ICSS (2014) assessment was a €16 billion GGR on
the global market for sports betting in 2011, of which about €10.5 bil-
lion were in the legal market and about €5.5 billion in the illegal mar-
ket. Placed bets, i.e. PLOs, overall were assessed to be €322.7 billion
of which €47.7 billion (15%) were placed in the legal and €275 billion
(85%) in the illegal market. From 2000 to 2010, GGR of sporting bets
evolved in the EU 28 countries from €2.2 billion to €11.2 billion, grow-
ing at an average 15% annual rate.
Another estimation of the global sports betting market for 2012 was
provided by Verschuuren and Kalb (2013) starting from a guesstimate
of €500 billion for overall global PLOs. On the legal market, PLOs were
assessed to be €60 billion and assuming 80% RRP this would make €48
billion paid back to winning punters and €12 billion for GGR, given
that:
GGR = PLO − PG = PLO x (1 − RRP) (1.1)
where PG stands for punters’ gains. The illegal online market assessed to
be €220 billion which, with an assumed 98.6% RRP, would make €217
billion paid back to winners and a €3 billion GGR. The illegal offline
market was estimated to be €220 billion either which, with an assumed
98.6% RRP, would give again €217 billion paid back to winners and €3
billion of GGR. Overall, the global market for sports betting was esti-
mated, with an average (legal + illegal) RRP of 96.4%, to be €482 billion
(48 + 217 + 217) paid back to punters and a €18 billion GGR kept by the
operators.
10 W. ANDREFF
By far the most popular of these side bets was on the identity of the
first goal scorer but, even in the highest profile competition, the EPL,
total transactions per match amounted to less than £42,000. Substantial
wagers would scarcely be possible in such a thin market. A priori reason-
ing again suggests that the development of markets on multiple aspects
of a match may not offer significantly increased scope for profitable
manipulation of sport by criminal interests (Forrest 2017).
Nowadays, fraudulent networks of punters and criminals rig matches
through bribing players or referees whereas placing bets on the fix
through Internet. In the past dozen years, match-fixing that interacts
with rigged betting has become a global complex issue which is now
chased by international police and sentenced at national justice courts.
Networking has facilitated its emergence. Fraudulent punters need to
network internationally in order to be able to gather a large amount of
money to place on a fix. In most cases in court, connected people from
different countries have been judged and sentenced together. Online
betting and network globalisation together may be used to create major
distortions in significant sporting contests and whose economic conse-
quences are often in the millions of dollars.
Betting agents in Asia, when asked how much they could place on
a fixed Belgian second division soccer match without attracting undue
attention, provided a consensus answer of around €300,000 spread
across several operators (Boniface et al. 2012). For a fixer this could lead
to a win of up to €1 million from manipulating a match in a relatively
low-level competition; and more if a match could be fixed in a higher
status league with deeper liquidity—which is less often the case due to
radar surveillance. Chris Eaton (FIFA, former Interpol agent) assesses to
$10–20 million per match the bets placed on a single fixed match.
As regards betting-related match-fixing concentration by sports, one
has first to mention that, until 2000, soccer was gathering 95% of the
sports betting market. Consequently, a large number of soccer cases
came to light in just a few years (Boniface et al. 2012). Since 2012, the
media have been flooded with revelations about large numbers of soc-
cer players and administrators being arrested in countries such as China,
Greece, Italy, Germany, Turkey, Zimbabwe, and so on (see Volume 2).
Problems of betting-related fixes have extended beyond football to hand-
ball, volleyball, snooker, sumo wrestling, cricket, and tennis, though
those proven cases are only the tip of an iceberg. With live betting it has
been changing and expanding towards different sports. For instance in
2014, Transparency International surveyed 259 Lithuanian basketball
players and 21% reported having been personally approached to take part
in a fix.
In a smaller survey which covered a wide range of thirteen sports and
a more diverse set of countries (Austria, Cyprus, France, Greece, Ireland,
and UK), 20% of the more than 600 athletes questioned were aware of
a fix in their team in the preceding twelve months and nearly 13% were
aware that they themselves had taken part in a match which was fixed
(Forrest 2018).
Now, when it comes to the products (kind of bets) that attract bet-
ting-related match-fixing, in criminal trials, the evidence gathered was
that criminals had placed bets on final results—the winner, the margin
of victory or the total number of goals. None were recorded as having
been placed in markets on incidental features of a game. In only 6 of
1468 suspicious matches was anything detected in side betting markets
(Forrest 2017).
Finally, rigged betting related to match-fixing often came to light dur-
ing police investigations of other activities of organised crime (ex: prosti-
tution rings in the Bochum case). That sports corruption was discovered,
1 GLOBAL CRIMINAL NETWORKING IN SPORT: ONLINE BETTING-RELATED … 15
"Eipä minulla ole muuta kirjaa kuin aapinen; sen minä osaan jo
ulkoa."
Paljopa sentään oli Liinalla aikaa yksinkin olla. Siitä asti, kuin Kalle
alkoi käydä häntä huvittelemassa, hän ei enää kiusannut palvelijoita,
ei, heidän huvittelunsa ei ollenkaan enää viehättänyt, eivät he olleet
niin sukkelat hyppimään kuin Kalle. Oli hänellä nyt sentään jo
toinenkin keino saada aikaansa kulumaan ja ikäväänsä haihtumaan:
hän lueskeli, kirjan toisensa perästä, ensin pienimpiä, sitte vähitellen
yhä suurempia. Itse hän aina salin kaapista otti, mikä kirja milloinkin
sattui käteen.
II.
"Se oli Jumalan tahto. Et sinä vielä sitä käsitä. Kunhan uusi täti
tulee, niin hän kyllä selittää."
Sitte Liina luki erään pikku kirjan, jossa vallaton poika itse
hullunkurisesti kertoi, mitä kaikkia kepposia hän teki. Ne tarttuivat
Liinan mieleen kuin tappurat tervaan, eihän hänellä siinä ollut aikaa
ottaa huomioonsa kirjan oikeaa tarkoitusta, joka oli pahankurisuuden
vitsominen, ei, hän päin vastoin itsekseen jo edeltä päin riemuitsi,
miten hauska tulee kiusata uutta tätiä, jota nyt odoteltiin. Ei hän
sentään tuota riemuinnut häijyydestä, vaan yksinomaan huvin
halusta.
Näin joutui Liina uusiin oloihin ja toimiin. Koulukuriin hän oli vallan
tottumaton ja samoin myöskin oleskelemaan niin suuressa
tyttöjoukossa. Oltuaan muutamia päiviä hämillään, tahtoi hän jatkaa
kotitapojaan, komentaa kaikkia muita, ja kun muut eivät ruvenneet
tottelemaan, joutui hän riitaan kaikkien kanssa. Opettajat olivat
hänestä pääsemättömässä pulassa. He tosin huomasivat tytön
entisen kasvatuksen olleen liian löyhän, mutta eivät siltä uskaltaneet
paaduttamisen pelosta olla varsin ankarat hänelle. Monesti he
mielellään olisivat lähettäneet koko tytön takaisin kotiinsa, vaan kun
hän aina hyvästi osasi läksynsä, toivoivat he hänen aikaa myöten
tasautuvan ja viisastuvan kurituksettakin.
Nyt hän tosin jo alkoi aavistaa, että jotakin eroa ehkä lienee
"pienten" ja "suurten" lasten leikin välillä, vaan ei hän sitä vielä niin
äkisti kyennyt käsittämään. Sen tähden hän ryhtyi yhä
innokkaammin lukemaan kaikenlaisia kirjoja, joita sai rajattomasti
ottaa isänsä tiliin kaupungin kirjakaupasta. Läksyjen lukuun häneltä
ei kulunutkaan aikaa ollenkaan; osaksi hän ei viitsinyt vaivata
itseään sellaisilla joutavilla, ja osaksi hän ne osasi lukemattakin, kun
koulussa kaikki luettavat edeltä päin valmistettiin hyvästi ja hän ne jo
siitä oppi mielestänsä kylliksi. Siispä romaanien lukeminen pysyi
hänellä yksinomaisena työnä ja huvina.
Näin hän muun muassa oppi, että ihmisen muka pitää olla
suurellinen puolestaan ja loukkautua pienimmistäkin aiheista, eikä
suinkaan sovi antaa anteeksi mitään sellaista loukkausta, vaan
täytyy oman kunnian tähden vaatia siitä hyvitystä.
III.
"Olen jo vanha", selitti rovasti, "enkä viitsisi enää itse pitää huolta
maatöistä. Kirjoitin Kurkijoelle ja pyysin sieltä luotettavaa pehtoria, ja
nyt esittävät Notkolan Kallea ja sanovat häntä taitavimmaksi
kaikista."
"Olisi tuo saattanut olla vähän etempää. Kuka tietää, eikö hän
tässä rupea enemmän hoitamaan omaa kotoansa kuin pappilaa."