Do sports prediction markets corrupt sport? No.

No Gravatar

Mark Davies (&#8221-managing director of corporate affairs at BetFair&#8221- = their spin doctor) in The Guardian:

Does the existence of betting exchanges corrupt sport?


In the world of finance, it has always been far easier for employees to have a negative impact on a company&#8217-s share price than a positive one. Even a chief executive would be hard pushed to cause a price rise on any given day, but anyone with physical access to the company can very easily cause a fall. No one would suggest people should only be able to buy shares, and not sell them. Instead, regulators ensure that sanctions against corruption tip the balance heavily against trying it. Make the penalty draconian, and you deal with corruption at its heart.

Betting on sport is no different. The only people who can corrupt sport are those taking part – a fact unchanged by the existence of betting exchanges. If you prevent people from succumbing to the temptation, would-be corrupters have no one to help them . You and I cannot rig a race just because we can bet against its outcome: we need someone who can affect the result. If that person might lose a livelihood, would they risk it for a fast buck?

Attack corruption at source, and it does not matter where the bet was placed. Nevertheless, some still long for the days when more traditional bookmakers held every card (an interesting notion considering what has historically been their dubious reputation)- others prefer a Tote monopoly- and some believe that banning bets against outcomes would constrain corrupters.

This series of arguments is based on the naive belief that a black market does not exist. This is absurd. Asian syndicates behind apparently rigged football matches (like those who turned floodlights out at grounds in the late 1990s) are no more dependent on Britain&#8217-s legitimate market than Colombian drugs barons are on sales of aspirin at Boots. The difference between legal, regulated, transparent betting – nowhere more so than on the leading betting exchange [= BetFair], where every transaction is open to scrutiny from 29 different sporting regulators – and the murky, illegal market, is the difference between chalk and cheese.

Black markets thrive where legal ones offer poor value. Now that the exchanges offer the best value, those previously tempted by odds on the black market are returning to the legal fold. Corruption-free sport comes from total transparency. The exchanges are the only part of the market that offer it. People get hung up on &#8220-betting to lose&#8221-.

Leave aside the obvious: bets to win (most clearly demonstrated in two outcome sports like tennis or snooker) are direct bets on the opposite outcome to lose. &#8220-Betting to lose&#8221- is just betting at value: if the price unfairly reflects the realistic chance of something happening, why should you not bet against it?

Value bets, placed for or against, are perfectly legitimate- acting to impact a given outcome adversely is corrupt. But banning the former through fear of the latter is like banning cutlery because some people use knives to harm. It is not the knives doing the damage, but the criminals using them. Legal betting does not corrupt sport- people do – and they are more likely to do it when they think they w ill not get caught. Measures to protect sport are not best aimed at open, transparent, and audited betting markets but through its participants, where the corruption can occur.


Leave a Reply

Your email address will not be published. Required fields are marked *