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Betting Against Corruption


Professor Juliet Sorensen (Northwestern University Pritzker School of Law) and Northwestern Law students David Hall and Kobby Lartey recently attended the Seventh Conference of States Parties to the United Nations Convention Against Corruption in Vienna, Austria.  See here for more information on the Conference. This post is from David Hall.

If I were to tell you that a high ranking Italian government official and a Criminal Justice Officer from the UNODC were participating in a panel on international corruption, you might expect that the panel would focus on organized crime.

If I were to then tell you that the panel also included representatives from World Rugby, the International Olympic Committee, and FIFA, you would be forgiven for altering your expectations. But you would be wrong. The November 8 event on Corruption in Sport at the Conference of the States Parties to the UN Convention Against Corruption was just that- a special session on organized crime and the ways in which it has invaded the world of international competitive sports.

The discussion centered on the phenomenon of match fixing, which Andreas Krannich, Managing Director of Integrity Services at Sportradar, described as similar in form to insider trading. Any time in which one party knows the outcome of a match before it happens, that party can manipulate the current system of sports betting to turn a profit. Between the proliferation of internet gambling sites and the expansion of sports viewership across markets, this phenomenon is occurring with ever-increasing regularity. The panelists hinted at uncertainty regarding the actual scope of the issue, and the fact that the burgeoning field of e-sports has created even more avenues for match fixing on a massive scale. But they all agreed on one thing: that the possibility for organized crime to launder money and maintain a positive margin has led to a massive criminal presence in a rapidly expanding global sports gambling market.

What was less clear is what steps each organization might take to curb that growth. Throughout, each of the panelists representing a sports federation took the time to point to both their limited jurisdiction and the correspondingly limited ways in which they are combatting this growing problem. Friedrich Martens, Head of the International Olympic Committee’s Unit on Match Fixing and former FIFA official, pointed to the educational programs the IOC has created to warn athletes about sanctions which they might face if they engage in match fixing. Ben Rutherford, Senior Legal Counsel & Integrity Unit Manager for World Rugby, focused on his organization’s efforts to partner with sports more accustomed to gambling and thereby prevent malicious third party influences on their officials and players. Gautier Aubert, Head of Ethics for FIFA, told us about the reporting mechanisms in place for athletes who have been pressured to manipulate match outcomes.

In contrast to this chorus, Mr. Krannich spoke about his organization, Sportradar. Sportradar—and others like it—operate in the sports world similarly to how a Financial Intelligence Unit would in the financial sector. They specialize in compiling and reviewing data with some predictive value which, in the corruption context, help to isolate potential cases of match fixing. Because real-world match fixing has grown so sophisticated, these companies are essential in combatting the problem. So the company will offer these data to sports federations, government entities, and bookmakers alike.

But the corrupting influences within governments and sports organizations themselves were conspicuously absent from most of today’s conversation. The glaring exception was when Marco Befera, Head of Internal Auditing & Prevention of Corruption for the Italian National Olympic Committee, addressed the issue to declare that off the field corruption in sports is just as meaningful as on the field corruption. While his colleagues focused on the threat of global organized crime, Mr. Befera posited that they should be turning their gaze inward. Given that these sports federations have awarded positions and tournament placements in exchange for bribes, he argued, they were at least as complicit in creating a culture of corruption as criminals who have placed illegal bets on their matches. Even more, Mr. Befera opined, the reform efforts in place to address the issues of which FIFA and the IOC have been made aware are likely not enough to cover existing corruption, let alone prevent it from taking root even further.

Which leaves us asking: what should we be doing to prevent further corruption in sports? Again, the one constant between panelists was the belief that, without some intervention, these problems are likely to get worse. Mr. Krannich suggested that the appropriate response is to create a robust regulatory environment for online gambling, and anything approximating prohibition will only lead to black markets which exacerbate the problem. That scenario seems plausible enough, so one might overlook the conflict of interest which his bookmaker clients pose, but it still begs the question of what form that regulation should take, and who should administer it.

Should it be the sports federations, with limited jurisdiction and corrupt track records? Should it be individual governments, who—as Mr. Krannich pointed out—have occasionally been moved to inaction for political reasons despite copious evidence of wrongdoing? Or can we rely on the UN and other international bodies to be first movers on these issues? As Ronan O’Laoire, Crime Prevention and Criminal Justice Officer for the UNODC and the panel’s moderator, was quick to mention, the UN does nothing quickly. It may be unable to adapt its Convention Against Corruption speedily enough to match the ever-increasing problem of corruption in sports. Besides which, one audience member pointed out that framing this as a gambling and organized crime issue might even render the UNCAC useless. Perhaps we should instead be looking at this under the Convention on Transnational Organized Crime. But if we don’t start looking at it soon, you can bet that the problems will get worse.

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