Friday, October 12, 2012

REVIEW: Sport & Gambling build international framework to tackle corruption

Sporting organisations are working together with international organisations to build an international framework to tackle corruption in sport, heard delegates at World Sports Law Report & DLA Piper’s Sport & Gambling 2012. However, to keep up the pressure on those intent on corrupting sport through betting, further integration is needed between the monitoring systems used by sport and gambling operators, and international regulations are needed to address disparities between national legislative regimes.

Who should pay for such innovations is also a contentious issue. Unless it receives what it considers an ‘adequate return’ from the gambling industry, some sports are unwilling to continually further invest in policing against corruption and argue that gambling operators should foot the bill. Gambling operators argue that they already continually invest larger sums in policing against corruption.

Pâquerette Girard-Zappelli, Secretary of the International Olympic Committee’s (IOC) Ethics Commission, outlined how it is working with United Nations organisations to extend the reach of the Council of Europe’s recently-written Convention on match-fixing beyond Europe. She revealed that the United Nations Office on Drugs and Crime is conducting a study on the application of its conventions to sports betting issues, and is negotiating with gambling regulators in Nevada, Victoria and Korea on an international framework for tackling match-fixing. She warned that policing against corruption is an ongoing issue. “We will not be able to just fix everything tomorrow morning”, she said.

It is hoped that such regulation will eradicate issues such as disparities between how different jurisdictions sanction and prosecute match-fixing, an issue raised by Caroline Larlus-Lefebvre, Head of the Sports Department at French online gambling regulator ARJEL. Paul Scotney, Integrity, Compliance and Licensing Director for the British Horseracing Authority, highlighted that whilst the BHA can obtain phone records to be used as evidence against match-fixers, the same is not true for all sports in all jurisdictions. “We make it a licensing condition that people must provide their phone records, if requested”, he said.

An international regulatory framework might also provide guidance into how sporting authorities can pursue parallel investigations in cases of corruption, whereby a sporting body has to conclude its own investigation in a short space of time (at the London 2012 Olympics, the IOC had 24 hours to make a case before the Court of Arbitration for Sport) without compromising a criminal investigation by the police. This issue was raised by Nick Tofiluk, Director of Regulation at Great Britain’s Gambling Commission, who also spoke about how a ‘risk-based’ approach to monitoring the potential of a sport to be corrupted had been used at the London 2012 Olympics.

Issues regarding the difficulty in gaining adequate evidence to prosecute match-fixers were continually raised. Girard-Zappelli and Tofiluk compared it to doping, where a sample is taken. “There is certainty in doping cases regarding evidence. There is no such certainty in match-fixing,” said Tofiluk.

Integrity as a Business

There are signs that policing integrity in sport is becoming big business. As well as FIFA’s Early Warning System (EWS) – which spoke at the conference – other players include International Sports Monitoring, the European Sports Security Agency, Global Sports Integrity and others. It was agreed that these need to find a way to share their information more freely, but it was pointed out that this might be difficult in a commercial marketplace.

Jacek Wojdyla, Head of International Affairs for FIFA’s EWS, highlighted that as well as monitoring FIFA events, it also has smaller agreements in place to monitor Major League Soccer in the US and Japan’s J.League. It is also offering smaller federations an ‘integrated service package’ and has a ten-year agreement with international police organisation Interpol to educate players.

The conference highlighted that while the most valuable type of bettor to operators is a so-called ‘high roller’, these will usually migrate to the black market at some stage, where they can get better odds. Larlus-Lefebvre revealed that ARJEL sends over 2,000 ‘cease and desist’ letters to operators per year. Through France’s licensing system, 1.8% of bets are returned to amateur sport, which equates to €20.9 million since the French regulated betting market opened in 2010.

Memorandums of Understanding

Andy Cunningham of Betfair outlined how its 55 memorandums of understanding (MoUs) with sporting organisations had allowed sport to quickly identify potential corruption. However, it was generally agreed that whilst MoUs are useful, sport had to move on from its reliance on them to a more integrated approach. It was pointed out that not all sports will sign them, due to issues over control of data.

Andrew Lyman, Head of Public Affairs at William Hill Plc., pointed out a potential failing of early warning systems is that the often fail to take into account betting volume. He also highlighted that some sports still don’t have adequate structures in place to police against corruption. He argued that funding and integrity should not be discussed together and although he welcomed the IOC’s moves towards combating corruption, argued that operators should have more representation. He said that one of the failings of the anti-corruption movement was that “we are not prepared to accept that each of us has expertise”.

Paul Scotney of the BHA highlighted that although illegal markets are an issue, a lot of cheating still goes on in regulated markets. Interestingly, he said that sports governing bodies have to deal with corruption issues, as the police and the Gambling Commission have other, more important, priorities. He said that was why the BHA had decided to charge nine individuals with breaching racing’s rules on 4 October. He said that the BHA had gone to the High Court to gain access to the phone records of one individual involved with the case.

Olympic Betting

The partnership between the IOC, Gambling Commission and the London Organising Committee (LOCOG) for the Olympic Games was held up as a model of best practice. Girard-Zappelli confirmed that the IOC had investigated badminton, boxing and basketball events during the London 2012 Olympics.

The turnover from betting was ten times higher than during Beijing 2008, but despite that, Olympic Games betting only made up 30% of the UK market during the Games. She highlighted that there had been ‘considerable’ micro betting during the Games. Fifty percent of bets were per-event, while 50% were ‘live’. However, overall, bets were placed ‘to win’. The most popular sports to bet on during the Olympics were football, basketball, tennis, handball, volleyball, athletics, swimming and cycling.

The Gambling Commission’s Tofiluk confirmed that 13 inquiries had been generated during London 2012 through the joint monitoring programme set up between the Gambling Commission, the IOC and LOCOG. He said that gambling operators had volunteered their involvement, often without being approached. If it had been found that an event was about to be fixed, the IOC said that the agreed procedure would have been to inform the relevant international federation as well as the IOC President and postponement of the event was a possibility. However, this may have been difficult because of TV schedules.

Overseas Markets

Tim Lowry of DLA Piper outlined the situation regarding New Jersey’s attempt to regulate sports betting. He said although it is unlikely that New Jersey will be successful this time around, the huge State budget deficits mean that a successful challenge will probably be seen in the coming years.

Albert Augustinoy of DLA Piper revealed that Spain is seeking to regulate exchange betting from early 2013. A widening of Spain’s closed list of sporting events on which betting is permitted is also being considered.

Giulio Coraggio of DLA Piper said that there has been a 90% fall in sports betting due to the launch of cash poker games. Italy’s gambling regulator, AAMS, has recently removed its list of permitted events, which is hoped will stimulate the market. The tax regime of 20% of global gaming revenue was also a problem for operators, and is due to change.

Patrick Schwarzbart of DLA Piper highlighted how the German State of Schleswig-Holstein is now joining Germany’s Interstate Treaty on Gambling, which places onerous restrictions on gambling operators. However, restrictions preventing gambling operators from appearing on perimeter advertising hoardings and on sports jerseys have been removed under the new version of the Treaty. However, gambling operators will not be allowed to advertise on television unless approved by a ‘relevant authority’. The final advertising guidelines are due by November 2012.

Player Education

The importance of educating not only athletes, but law enforcement authorities was also raised, as was the possibility of sporting federations taking more proactive action against those suspected of match-fixing. Simon Taylor, General Secretary of the Professional Players Federation (PPF) and Jane Purdon, Director of Governance at the FA Premier League highlighted the importance of educating players about the dangers of corruption.

Taylor said that education programmes need to be tailored to address the specific threat in any particular market, and that a ‘blanket approach’ is no longer adequate. He also highlighted that education needs to be ongoing, as football, cricket and rugby have a ‘churn’ of 25% new players each year. The PPF is funded by gambling operators and sport, and its funding agreement expires in the new year.

Purdon said that the Premier League had rewritten its rules on youth development this summer. A regulatory awareness programme is in place for all Premier League Academy scholars and staff, with modules relating to corruption in connection with gambling.

For more information on World Sports Law Report’s other conferences, contact

Andy Brown


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