August 16


Betting: Benefits and Risks for Sport

Since its inception, the development of organized sport, especially football, has been associated with the phenomenon of gambling. Sport has benefited to the extent that a complementary good stimulates the demand for the main good. But gambling is also a threat, and match-fixing has been around the world of sports since the 18th century.

Benefits and Risks for Sport

Since the turn of the millennium, the volume of global gambling activity, a large part of which takes place in illegal or unregulated markets, has multiplied by at least five, supported by the introduction of online technology, which has also enabled product innovation. Among the new products, in-play bets stand out for their importance (that is, those carried out while the event is in play). A substantial and growing proportion of bets now take place during the match rather than before it.

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It can be argued that these events have amplified both the potential benefits to be derived from sports betting and the costs in terms of the prevalence of fraudulent match-fixing practices. Match-fixing poses a commercial threat to the sport as it can undermine trust between consumers and sponsors.

In-play bets like those regulated by are necessarily consumed in conjunction with some form of consumption of the sporting event to which they refer, either through television monitoring or via streaming on the bookmaker’s website. This makes the degree of complementarity in consumption greater than before, which is likely to benefit the sport.

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The in-play betting mode also relies on rapid transmission of event information to bettors and bookmakers. Since sports organizations control the stadiums where events are held, they are optimally positioned to supply the data, and leagues, both major and minor, enjoy lucrative contracts as data providers. Sponsorship and advertising are other ways of attracting income from sports betting.

On the other hand, the evolution of betting has heightened integrity risks, revealing an unprecedented number of cases of rigged matches. These cases have hit cricket, soccer and tennis with a particular frequency, but many other sports have also been affected by a ‘tsunami of match-fixing. We analyze the prevalence of match-fixing within the framework of a supply-demand model of “fixes”. The offer is made up of the players and other parties involved (insiders) in the sport. The demand is made up of criminals looking to make a profit in the gambling market. The higher prevalence of fixes is linked to a shift in demand.

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Criminals can now make considerably more profit from rigging than in the past. An overabundance of liquidity residing mainly in unregulated markets allows placing huge bets and materializing huge profits. We also explain why the exploitation of in-play markets allows profits to be further increased. Court processes provide evidence of the quantities generated even by manipulating events at relatively low-mass levels.

This has caused organized gangs to enter the market, and some networks have manipulated hundreds of parties. The risk especially affects those team sports where the liquidity of the betting market is disproportionately high compared to the players’ income. Individual sports based on international circuits also carry high risk, as the betting markets are highly liquid, but most players do not even cover their expenses.

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Estimates of the degree of prevalence are difficult because not all hoaxes are discovered. According to data from the authorities in charge of monitoring the betting market, the percentage of cases of manipulated soccer matches could be 1 per cent.


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