Illegal financial flows in sport: match fixing


Date : 09/03/2016

Lecture by Prof. Dr. Ben Van Rompuy

VUB – Free University of Brussels

 

Billions of euros per year are money laundered via international illegal gambling in sports. Prof. Dr. Ben Van Rompuy, Senior Researcher and Professor Competition Policy and Media Regulation shared a lot of interesting insights about match fixing on the 9th of March at the VUB in Brussels, part of a series of sessions around large money circuits.

What is match fixing?

According to the the Council of Europe Convention regarding sports competitions (art 3), match fixing in essence is defined as follows:

“The intentional manipulation of either the development or the final score of a sport match. The objective is to generate benefit for the initiator and/or third parties, which can be financial or  related to increase chances to win the game.” 

A player can literally be physically handicapped to exclude him/her from the match. The objective can be, for instance, to qualify for the Champions League. This form of corruption, is as old as mankind. Stories can be found dating back to the ancient Greek. A relatively new phenomenon however, is the significant growth of the international gambling market, where enourmous profits can be made.

Looking at the gambling scene, we can conclude that in Europe this market is relatively well regulated. In Belgian football for instance, the Gaming Commission monitors if players bet on their own games (although it is impossible to check if they operate via third parties). They also investigate cases where referees or players show suspicious behavior. To manipulate the outcome of a match, a referee and/or a few players have to be bribed. It speaks for itself that international, famous players that earn huge salaries, will not put their career at risk easily. The national and regional divisions are a far more interesting market for criminals. Think about the ‘Golden Whistle scandal’ in Portugal in 2004, where the referee in exchange for access to escort ladies and money, was willing to try to manipulate the outcome of the game at FC Porto. In Italy a network was unravelled, where via Swiss mobile phones with credit cards, criminals discussed with referees how many yellow cards, penalties and such alike were going to be used during games of clubs like AC Milan, Juventus, etc.

The organised crime where enormous amounts of money are involved, is located in Asia. Legal operators in places like Japan, Hong-Kong, South Korea, andSingapore make an estimated profit of 50 billion euros per year. The illegal Asian “bookmakers” in Manila (Sbobet, 188bet.com and Maxbet) are estimated to be worth 500 billion euros of profit on a yearly basis. The ‘Asian Agents System’ is caracterised by its option to bet anonimously. Youngsters in the streets accept envelopes, the envelopes travel from the district office, to the regional and national office to finish at the bookmaker. An envelope containing amounts as large as 5 million euros will pass unnoticed. The profit travels back to the beneficiary via the same chain and only the younster in the street knows the identity of this person. This business grew so rapidly in Asia, that fans no longer went to see games as the element of genuine play went missing. That is when those structures started to focus on the European market.

By default, it is hard to express corruption in numbers. Based on statistics provided by SportRadar, from May 2009 until November 2014, 1.625 footbal matches worldwide were reported  as ‘suspicious’. An overwhelming majority of the likely manipulated matches related to domestic football matches (88%), international club matches and national team matches represented 6% each.  In 2015, a Dutch television programme Rambam, asked quite a number of professional football players if they would be interested to manipulate the outcome of a match in exchange for a sum of money. Only one player had reported this to the football association, the KNVB. Of course the question was raised if this was an ethical practice from Rambam, but in any case, a few elements have to be taken into consideration. Firstly, players often keep quiet out of fear of repercusions from the criminal circuit. Secondly, although they are bound by contract to report this kind of events, we cannot help but realise that the higher management in the football world does not set an example to live up to. Last but not least, cases are rarely sanctioned, penalties are rare.

What could be a solution to the problem? Obviously, it is complicated. As long as authorities in Asia are unwilling to better regulate their gambling market, this channel will continue to tempt many to earn money quickly and easily. Although sanctioning the players, who often can be labelled as vicitims as well, is not going to fundamentally change, it is nesessary. Further, Prof. Dr. Ben Van Rompuy mentioned that it is important for the sports sector to learn from the corporate business world about compliance. The implementation of professional,  good working compliance procedures is highly necessary. Clear rules need to be defined as well. To name a few: What type offences are cases for the police/prosecutor? When is a disciplinary santion from the parquet or sportsfederation sufficient? How high should sanction be? Who has what investigative powers?

Although it will be a long journey to ‘clean up’ the sector, it is absolutely necessary to act rapidly and decisively

Transparency International Belgium organises an event around good govenance in sport with speaker Arnout Geeraert, on Tuesday 2 September at Mundo-J, rue de l’Industrie 10 in Brussels, starting at 6.30pm. All are welcome to join, to register: http://transparencybelgium.be/fr/home/events_detail/20. 

 

By Hanneke de Visser, Operational Manager Transparency International Belgium, 15-03-2016