Peter Cohen, director of regulatory affairs at The Agenda Group, dismisses the claim that regulated betting leaves sport vulnerable to interference. In this timely and cogent repost he shows that effective regulation is a recipe for the exact opposite.
Who are the prime beneficiaries of a properly regulated sports betting market? The gamblers? The betting companies? Governments that raise tax from betting company profits?
I think it’s none of the above. While each of the aforementioned will get a benefit, it is my view that the prime winners from a properly regulated sports betting market are the sports themselves.
This view may seem counter-intuitive. There is no end to the number of pronouncements that sports betting will corrupt sport. That view is correct, but only where sports betting occurs where it is not properly regulated. It should not surprise anyone that where a ban is in place, crime finds a way around it. As a consequence, where sports betting exists – and, like it or not, it exists everywhere – the easiest avenue for sports corruption is where sports betting is illegal or where it is allowed but without an adequate regulatory framework.
A properly regulated sports betting market, how- ever, has the reverse effect and enhances the prospects of sport being conducted with integrity. The important words in the previous sentence are “properly regulated”. What does this mean? Having implemented a successful sports betting integrity regulatory framework I have experience with a model that works. While sports betting in Australia has been legal in one form or another since 1982, in my home state of Victoria, Australia the model was enhanced in 2007 by incorporating the following key features:
● Sports can seek approval from the gaming regulator to be classified as a “sports controlling body” (more about this below)
● A licensed betting operator cannot offer bet- ting on an approved sports controlling body’s sport without that sporting body’s permission
● To get the sports controlling body’s permission, the betting operator must enter into an integrity agreement with that sport. The integrity agreement covers matters such as exchange of information, payment of fees and acceptance that the betting operator can only offer bet types with the approval of the controlling body. This last obligation prevents betting operators from offering bet types which might compromise the integrity of the sport or bring the sport into disrepute. Such a bet type might be “First player to be suspended for punching another player”
● If a sports controlling body and a betting operator cannot strike an agreement, the betting opera- tor can ask the gaming regulator to intervene. (This stops the sports from entering into exclusive arrangements with selected betting operators).
To be approved by the gaming regulator as a sports controlling body, a sport must satisfy the regulator by showing, amongst other things, that it has integrity procedures in place and has a willingness and capacity to investigate potential breaches of those procedures. The integrity procedures typically include matters such as banning anyone with a role in the sport, including players, administrators and officials, from placing bets on the sport and clear rules regarding the conduct of the sport itself, such as when a result is determined. In most circumstances, deter- mining results is obvious, but sports need to be clear about results in unusual circumstances, such as, for example, when weather prevents a finish or if the lights go out during a night game.
The integrity fee which betting operators pay the sports controlling bodies are used by the sports to investigate potential breaches. Investigations can take significant resources, so the integrity fees are not just a “money grab” by the sports but a key component of this model.
Since the model was introduced in Victoria a decade ago, nine different sports have taken the opportunity to be approved as sports controlling bodies and by doing so have ensured they are involved in managing the integrity of their sports with the assistance of licensed betting operators.
The end result of this scheme is a regulated sports betting market which fully integrates the sport, the betting operators and, by extension, the gamblers. It benefits those who wish to bet on sports, the betting operators, Governments who wish to earn tax revenue from betting on sports and, most significantly, the sports themselves. A properly regulated sports betting market does not guarantee that sports will be conducted with integrity but rather than increasing the risk, it does the opposite and reduces the likelihood of it occurring.