Chapter 14

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Chapter 14

Match-fixing and corruption: the role of sporting bodies and the risk of exotic betting

14.1      This chapter will discuss the role of sporting bodies in addressing match-fixing and corruption, including self-regulation by sporting codes themselves and strategies to maintain player and participant integrity. The merits and risks of allowing exotic betting on sport will also be covered.

14.2      While governments have started to take national action in relation to match-fixing as outlined in the previous chapter, major Australian sporting bodies have already established their own self-regulatory measures and codes of conduct to preserve integrity within sport. However, sporting bodies have also welcomed further coordinated action with government to address the threat of corruption.

Coalition of Major Professional and Participation Sports (COMPPS)

14.3      The Coalition of Major Professional and Participation Sports (COMPPS), an industry representative group, was formally established on 21 May 2010 after several years of informal cooperation. Its members comprise the chief executives of: the Australian Football League (AFL), Australian Rugby Union (ARU), Cricket Australia, Football Federation Australia (FFA), National Rugby League (NRL), Netball Australia and Tennis Australia. COMPPS' Executive Director is Mr Malcolm Speed, former Chief Executive Officer (CEO) of the International Cricket Council, and the inaugural chair is Mr James Sutherland, CEO of Cricket Australia.[1]

14.4      At its first meeting, COMPPS agreed to 'share information on sports gaming integrity education, sports gaming disciplinary and code of conduct processes, and integrity processes'.[2] 

14.5      COMPPS advised that its member sports already regulate sports betting to some degree:

These regulations are enforced by way of contract and include prohibitions on match fixing and corruption, on betting by participants and disclosure of inside information for betting purposes. To assist in the enforcement of such regulations, COMPPS members have information sharing agreements with betting agencies. Such agreements require agencies to disclose full details of their betting sheets to sports for the purpose of investigation [or] inquiry.[3]

14.6      COMPPS stated that all of its member sports, with the exception of Netball Australia, conduct matches on which betting takes place:

Australian sport has for many years provided high quality and popular domestic and international competition for which betting agencies have offered odds and taken profits through sports wagering...

Sports betting is a legitimate and legal pastime, the modern extension of the Australian tradition of betting on sporting events...

Initially, sports betting used the traditional cash-based systems. The emergence of interactive online technologies has increased the volume of betting on sport and provided new challenges in monitoring and policing. It has, however, also provided better options for sport and betting agencies to protect the integrity of sporting events where betting takes place.[4]

...Australian sport has responded well to the threat of corruption through sports betting given that we are a nation of sports lovers and active gamblers. Compared with many other countries, the internal processes that the sports have adopted and enforced have served them well. There is a strong and continuing commitment to protect and enhance the integrity of professional sport in Australia.[5]

14.7      While COMPPS said that it recognised the challenges posed to the integrity of sport from match-fixing and corrupt behaviour, it does not favour any prohibition of sports betting activity that is already legal:

One example that highlights the challenges that sport has faced in relation to betting occurred in the late 1990's when match-fixing in cricket was exposed. The captains of three of the nine test-playing countries were banned for life...The root of the problem was cash-based, unregulated, illegal betting in the Indian sub-continent. We do not believe that prohibition works as a regulatory framework. It will...drive betting underground or push Australian gamblers to off-shore online gambling agencies.[6]

14.8      The National Policy on Match-Fixing has been welcomed by COMPPS, including the move towards nationally consistent legislation:

New regulation may also address issues such as minimum standards for all betting agencies in relation to record-keeping, retention of data, disclosure of information to sporting bodies and reporting of suspicious bets, among other things. Importantly, and in order to protect the integrity of our sports, COMPPS members believe that we each should be able to prohibit certain types of exotic or unusual bets that present enhanced integrity risks.[7]

14.9      At a hearing, Mr Speed explained the sporting codes' current arrangements with betting agencies on product fee agreements and information-sharing to ensure integrity, giving the example of a recent NRL case:

Typically, the sports can seek the betting records from the betting operators. If there is suspicious betting, as there was in the NRL case that is under review at the moment, then the operator in that case, NSW TAB, is under an obligation to alert the sport. It is in the betting operator's interest to have corruption-free betting. It is imperative for them that gamblers know they can go to them and know that everything is above board and that matches or parts of matches have not been fixed. When there was a suspicious betting pattern in relation to the first score in an NRL match, the operator alerted the NRL to that very quickly. The NRL put in place an investigator to carry out a preliminary investigation and very quickly passed that to the New South Wales police.[8]

14.10         Mr Speed pointed out the problem with not having nationally consistent legislation to deal with all such cases:

The issue that we face there is that, because that legislation only exists in Victoria, it only covers events that take place in Victoria. It has become a convention amongst the sports and the betting operators in other states to enter into those sorts of agreements, but it does not have legislative effect. So TAB and NRL were following the Victorian legislation; they had an agreement in place. Most of the big betting operators have agreements in place with the major sports—all of them in Victoria are required to, as a result of the legislation. What we are seeking to do is put that legislation in all states and territories for all the betting operators who are betting on sport, so that they are required to do that and so that no-one slips through the cracks.[9]

Limits of sporting bodies' powers

14.11         COMPPS also commented on the recent Pakistani cricket betting scandal uncovered by journalists and noted the limitations of sporting bodies' powers in addressing such instances of corrupt conduct:

Mr Speed: The criticism has been made that sports should be able to disclose that act of corruption. In an ideal world that would be the case. If the sport or a police force acted in that way, they would face the suggestion that they had acted as an agent provocateur. It is not my role to defend the ICC [International Cricket Council] as I am no longer associated with them, but for the ICC to do that they would have needed to have been able to pose as a journalist and to provide quite a lot of money in cash to film that event and then wait to see whether in fact the no-balls were delivered. They do not have that power. I understand that they were aware of these people and were suspicious of them and there was an investigation under way. To enable sports to carry out those investigations they would need far wider powers and to enable police forces to do that they would require far wider powers.

Senator XENOPHON: Given your expertise and experience, in order to get the bad guys, to put it colloquially, do you need those extra powers to deal with these issues effectively?

Mr Speed: I think it would assist if the sports had close relationships with police forces and police forces had those extra powers. It would be dangerous ground for sports to be given those powers to act unilaterally in matters such as that.[10]

14.12         Tennis Australia echoed COMPPS' view, emphasising that sporting organisations alone cannot police corrupt activities:

To effectively shut down the root cause of corrupt activity, legislation needs to be in place to ensure such activities are clearly defined as illegal activities, and that appropriate penalties are in place to deter such activities. It should be noted that this call for action via the criminal system is in no way an attempt by sport to abrogate our responsibilities in regard to policing corrupt activities where we can, but rather is an acknowledgement of the fact that the basis for corrupt activities starts with criminals who sit outside the sport system directly, and over whom a sport’s code of conduct and associated penalties has no authority.[11]

Player and participant vulnerability

14.13         Involvement in gambling can significantly damage the integrity of athletes and others closely associated with codes of sport. Many incidences of match-fixing and corrupt behaviour can be the direct result of players or officials with existing gambling debts being vulnerable to manipulation. For others, a 'betting culture' in certain clubs or sports exacerbates their problems.

14.14         Former AFL player and recovering gambling addict, David Schwarz, commented on SBS TV's Insight program that the option of gambling online was attractive to those with high profiles:

I think for someone in my position that did have a profile, you know, going down to the TAB was a bit of a hassle. Not having to go into the TAB or go to the races – it's hassle free. So for people playing professional sport it might be a bonus for them not to be seen. With the smart phone technology you're not being photographed. So for those punters it's hassle free and it's anonymity.[12]

14.15         Another former AFL player and coach, Daryn Cresswell, recently admitted to betting on his own games (at least 'once') and making money from these bets. He also said that he knew of other players who had done the same. Recently released from a Queensland prison for defrauding a bank to fuel his gambling addiction, he described the extent of his problems:

Everything I had I was trying to win back to pay people that I owed, to try pay. The rent try [to] pay, the cars, try [to] pay for the kids education and in the end...two attempts to try end it all.

I couldn’t stop, I didn’t know what I was doing. I was thirty years of age. I started gambling at thirty years of age, I had no prior knowledge or prior [sic] in horse racing. I didn’t understand what I was doing but I was just doing it and I was just completely out of control. I couldn’t stop.[13]

14.16         The Brisbane Broncos star player, Darren Lockyer, also recently admitted to beating a gambling problem during the 1990s:

As his bets kept increasing and he suffered a run of heavy losses in the thousands of dollars, Lockyer says he was left "just shattered".

"It took a run of outs for me to finally confront the fact that I had a bit of a problem which needed addressing before it spiralled out of control," he writes.

After a particularly bad run of losses, Lockyer went home, turned out all the lights in his house and sat in the dark with his head in his hands.

"I got home after the last time and was just shattered. I was a wreck, stressed out and angry and significantly out of pocket."

Lockyer was a punter before he joined the Broncos.

He walked into a betting culture at the club with a number of senior players, including former captain Allan Langer and Wendell Sailor known to love a bet.[14]

14.17         Despite the NRL's code of conduct prohibiting players from betting on their own sport, a poll of 100 players published in Rugby League Week magazine revealed that 20 per cent admitted they knew other players who were gambling on rugby league.[15]

14.18         To mitigate such activity, Sportsbet supported betting agencies and sporting bodies having agreements in place to provide 'insiders lists' to prevent certain persons from placing bets:

Mr Sleep: Our agreement with one of the major sporting bodies provides that they provide us with an insiders list and we can put that in a database so those persons cannot open accounts...

Mr Barry: In terms of having a national register for betting on sport, it would also be appropriate that sporting bodies provide a list of insiders who are on that register and that those people are not able to bet on their sports.[16]

14.19         Education is also a key element in successfully enforcing codes of conduct in sport. This was acknowledged by Tennis Australia:

It is imperative that appropriate education processes are in place to ensure all those persons who are subject to any code are fully educated as to the provisions of the code, and the penalties imposed by a breach of the code. Tennis Australia, via the international integrity unit, takes an active role in ensuring all relevant persons under our control are appropriately educated in regard to our integrity code and associated anti-corruption issues.[17]

14.20         Owen Craigie, a former NRL player who has admitted to overcoming a serious gambling addiction during his playing career, is now working as a gambling education officer for Mission Australia and has expressed a desire to assist the current generation of NRL players. He estimated that over 12 years of gambling, with his earnings of $1.5 million from the NRL, he would have won about $10,000 and lost more than $1 million.[18]

14.21         Dr Jeffrey Derevensky told the committee that young sporting players on high salaries were particularly vulnerable:

We have been working with people from the National Football League in the United States. They found that many of their rookie athletes who are football players come out of college, typically quite poor students, and it is like they hit the lottery with all kinds of wealthy signing bonuses. They found over time that many of these people had very poor money management skills, that some of them were getting overly involved in gambling, some of them were getting overly involved in other risky behaviours, and, as a result, they have instituted a very specific training program and worked through their employee assistance programs with the various teams in order to help educate these young people.[19]

14.22         As discussed in the previous chapter, the new National Policy on Match-Fixing in Sport will ensure that sport controlling bodies provide appropriate education of players, officials and staff on their responsibilities under codes of conduct in relation to match-fixing.

Committee view

14.23         The committee welcomes the work being done under the auspices of the National Policy on Match-Fixing to ensure that sport controlling bodies properly educate players and participants about the risks of both gambling and involvement in match-fixing and penalties for breaching codes of conduct in relation to such activity.

Exotic bets

14.24         As explained in chapter 10, exotic bets are a relatively recent bet type. The ability to bet on 'micro'-events and contingencies is a controversial practice. A 2008 study on the Risks to Integrity of Sport from Betting Corruption from the University of Salford explains both the allure and risks of exotic betting:

Greater competition for market share has induced the gambling industry to offer an increasing range of subjects beyond the traditional one of which player or team will win the match. These betting products are attractive partly because they make following an event more interesting and partly because they enable the bookmaker to cater for a variety of risk preferences. For example, football matches are typically played between fairly well matched teams, selected by past achievement to play in the same division. Win odds therefore seldom depart very far from evens. The event will not appeal to bettors with high risk preference who, for example, like to back horses at longer odds. Such bettors may however be attracted by betting on which footballer will score the first goal in a match since this market will feature a wide range of odds, similar to the pattern of odds in a typical horse race.

The large variety of aspects of a match on which it is now possible to bet, whatever the sport, is testimony to the creativity of the betting industry. But many of the new types of bet[s] available raise concerns for sport because they appear to offer more scope for fixing than bets on [the] final outcome. For example, they may relate to aspects of the game under the control of a small sub-set of players or officials (making it easier to arrange a fix) or they may relate to components of an event that are fairly marginal to final outcome (tempting athletes because winning the bet need not involve losing the game).[20]

14.25         COMPPS was asked whether sporting codes could be said to have a conflict of interest in relation to permitting exotic betting, given that they receive a share of revenue from betting activity. However, Mr Speed responded:

The amounts that the sports receive by way of product fee are relatively minor in relation to their overall revenue streams. Their overriding concern is the integrity of their [sport], so if there is a concern about the integrity then I believe that the sports would seek to ban those spot bets that had particular integrity concerns. They would not be concerned about the loss of revenue.[21]

14.26         Mr Speed also acknowledged the risks of exotic betting and outlined the steps taken by the NRL to veto certain bet types in recognition of such dangers:

...there are some types of spot betting that have more potential to be corrupted than others. To take the Pakistan example—whether a ball will be a no-ball. One player can arrange that. Take a tennis example: that in the third game of a tennis match there will be a double fault. One player can fix that. If you have that player under your control, and he or she agrees to do that, one player can do that. Those sorts of things are matters that are of greater integrity concern than perhaps the overall outcome of a football match, where there are 18 players on the ground, or 11 in some other codes, at the one time and it is far more difficult to achieve that outcome. So the former group would be those that are easily corrupted.

The NRL has said to the betting operators that there are certain types of bets that it is not prepared to contemplate, so it has taken the veto unto itself, although the veto does not exist under the agreements at the moment. As I understand it, the NRL has said it will not allow betting on the first score in the second half and the last score in the second half...I think there would be others where the sports would sit with the betting operators and say, 'No, we do not want betting to occur on which player will be the 12th man in a cricket match or which player will start as the interchange player in an AFL match,' because lots of people will know about those decisions.[22]

14.27         Mr Andrew Twaits, CEO of Betfair, told the committee that the majority of bets that his company handled were not classified as 'exotic' and that any restrictions on such bet types would not have a significant effect on its business:

Senator XENOPHON: So in terms of your business model it would not be the end of the world if that was restricted.

Mr Twaits: Not really, for the most part. There are some exotic bet types that are more popular than others and have some promotional benefits, but the volume of that type of betting is quite small.[23]

14.28         Betfair also stated that it did not offer exotic betting on events 'open to manipulation' and said that sporting bodies were best placed to determine the availability of such betting on their sports:

...wagering operators must be sensible in the types of markets that are offered to customers. The reality—at least in Betfair’s case—is that 95 per cent of the money wagered on most sporting events is on the actual outcome of a sporting event. As an approved wagering operator of all of Australia’s major sporting bodies, Betfair seeks approval from the relevant governing body for all markets it intends to offer on a sporting event. Betfair does not offer markets or bet types without specific approval. The sports themselves are in the best position to determine whether a particular bet-type is liable to any form of corruption or manipulation. Accordingly, any decision should remain in the hands of the sporting bodies to reasonably determine the number and types of exotic markets that are offered on a particular event.[24]

14.29         The CEO of Sportsbet, Mr Cormac Barry, suggested betting limits on exotic bets as a way of mitigating risk:

Senator XENOPHON: Finally, could you put your hand on your heart and say you believe that microbetting, ball-by-ball betting, exotic betting, does not in any way increase the risk of corruption in sports?...

Mr Barry: I think there are two relevant points here. The vast majority of corruption and match-fixing betting is cash based, anonymous and occurs with illegal operators, which has been elaborated on by the head of the IOC and by Malcolm Speed. In terms of the specifics of exotics betting, as you may have seen in our proposal, we propose that there are limits on the betting that can take place on those bet types so as to remove the incentive for individuals to attempt to corrupt or alter the outcome of a match on that basis. If an individual can only win $1,000 on those exotic bets, I think it removes the incentive to do that. I think if you ban them completely you drive recreational punters to access those bet types...

Senator XENOPHON: And strict winning limits? What would the limit be—$1,000?

Mr Barry: To be decided in consultation, but I certainly think the amount a customer wins could be limited to $1,000 or $2,000, something of that nature. Typically these outcomes might be at 10 to one or 20 to 1, so you are looking to allow the recreational punter to have a $50 bet, while simultaneously trying to remove the incentive for people to corrupt that outcome.[25]

14.30         However, Betfair disagreed with the concept of betting limits:

Having a transparent system in place where you know the identity of the punters and that information is available to the sports and law enforcement authorities...is the way to address it—not through putting limits on how much people can win. I can understand that approach in the cash based environment, where there is complete anonymity about who is putting the bets on, save for a CCTV inquiry. Once you have the account based system in place with proper verification, that should be the start and finish of it.[26]

14.31         The Australian Internet Bookmakers Association argued that the mechanisms in place to regulate exotic betting were already sufficient:

This is but one area of risk around betting related corruption. As international experience shows, any game or contest is at risk if there is a large betting market on it whether legal or illegal. This has an important consequence, in that increased controls over the local industry would do nothing to lessen the threat. If the market exists offshore, there will be a risk of corruption.

At the moment, it seems the boundary between fair “exotic bets” – where the outcome is a function of good play – and improper exotics bets – which encourage a player to underperform – is about right. There is still room for discussion, but the process is in place for those discussions to occur.

This Association suggests that there is no necessity for further action to be taken on bet types, in particular to ban all exotic bets. Sporting organisations, gaming regulators and betting providers are alive to the risks posed by certain bet types, and the mechanisms are in place to recognise and address those risks.[27]

14.32         However, the University of Sydney Gambling Treatment Clinic drew attention to the risks of exotic betting for gamblers who were having problems with excessive sports betting:

...the promotion of more “exotic” spot-betting has also been reported as problematic by our clients. These bet types, often promising a very large return on modest outlays, are very tempting for a gambler who is attempting to recoup money that had been lost previously.[28]

14.33         The Clinic's submission advocated 'further examination of the potential impacts of banning of spot-betting, with a view to eliminating more exotic bet types.'[29]

14.34         Dr Jeffrey Derevensky also explained the risks of this bet type to the committee:

We know that in Australia, as well as in other jurisdictions now, there are what we refer to as 'proportional bets'. So you no longer have to just bet on the final outcome of a game; you can actually bet on who is going to be in the starting line-up. You can wager on who the first person is going to be to get a goal. In fact, in some really outrageous internet gambling websites you can gamble on the colour of the blouse of the quarterback's girlfriend. So you can continuously bet on these various sporting events. We know that this is particularly insidious for young people. We also know that they wind up getting overly engaged in gambling because they believe they can predict the outcome of some of these games.[30]

14.35         The Social Issues Executive (SIE) of the Anglican Diocese of Sydney recommended a ban on all exotic betting or spot betting, arguing that it would protect players and sport from corruption and would not prevent consumers placing bets on the outcomes of sporting events.[31] The SIE also suggested that the nature of spot-betting and similar betting types had the potential to result in match-fixing and collusion of players to rig outcomes:

...there is the risk of a corrupting influence on players and on the sport itself. Although it is harder to corrupt an entire team than individuals within the team, proliferation of spot‐betting may create incentives that invite the collusion of a whole team.[32]

14.36         The Interactive Gambling and Broadcasting Amendment (Online Transactions and Other Measures) Bill 2011 proposes to ban exotic bet types. Further consideration of the bill's provisions on this matter is covered in chapter 16.  

Committee majority view

14.37         The committee majority holds some concern about exotic bets, noting in particular the evidence from the University of Sydney Gambling Treatment Clinic suggesting that the existence of exotic betting opportunities presents difficulties for problem gamblers. While recognising that exotic bet types make up a small portion of the overall sports betting market, the committee majority notes that the risks associated with exotic betting have the potential to be damaging to the integrity of Australian sport. The committee majority commends and supports the action taken by the AFL and NRL to eliminate certain exotic bet types. The committee majority considers that the work being undertaken by Sports Ministers is the appropriate forum in which to consider nationally consistent policies in relation to regulation of exotic betting, including providing sports with the right to veto bet types. Until such time as a national independent research institute on gambling (as recommended in chapter two and in the committee's previous report) can undertake this work, the committee majority suggests that research on the risks of exotic betting (both for those who bet and for sporting participants) and appropriate regulatory responses be commissioned under the existing work by Sports Ministers on the National Policy on Match-Fixing in Sport to assist sporting bodies with decisions in relation to veto power over bet types.

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