With economic globalisation and the Internet, online sports betting has become predominant. The evolving betting environment has raised risks to the integrity of sport. However, with globalisation of the economy on the one hand and, on the other hand, the Internet-isation of betting these kind of risks have tremendously increased because now the major part of a global sport betting market is operating online. Now bettors can shop around bookmakers worldwide and bet at any second of time. It is more complex for potential fixers to evaluate the costs and benefits to them of engaging in manipulations of sporting events on the field for betting gain (Forrest et al. 2008) but it is even more complicated to detect them in operation. Global criminal networks that take part in online rigged betting related to match-fixing are extremely difficult to trace, discover, crackdown, and sue in court. Particular markets and situations are especially susceptible to corruption such as increased betting market liquidity, situations where the probability that the fix will be both successful and undetected is very high while the probability of detection lowers on online betting-related match-fixing global black markets.
This chapter briefly sketches how the Internet and economic globalisation have increased complexity in a globalised economy and have triggered a skyrocketing growth of online sports betting alongside with much more opportunities for rigged and fraudulent bets.
1.1 Online Sport Betting in a Complex Context of Globalisation and âInternet-isationâ
Online sport betting is only part and parcel of the increasing complexity of an entirely globalised economy (Andreff 2017). Complexity is neither a concept nor an approach used in standard mainstream economics. However, in recent years the emergence of complexity economics is to be noticed though this new analytical framework is still in the cradle. Analysts of economic complexity attempt to bring forward a better understanding of increasing complexity in the real world of a globalised economy which is typically exemplified here by online betting-related match-fixing.
1.1.1 Complexity Triggered by Economic Globalisation
Mainstream economics describes rational âsmart people in unbelievably simple situationsâ while the real world involves âsimple people coping with incredibly complex situationsâ (Beinhocker 2012, 52) relying on their bounded rationality. Then follows a search for a complexity theory in economics relaxing basic mainstream assumptions (equilibrium, representative agents, rational choices) and seeking to move beyond while emphasising the power of networks, feedback mechanisms, and the heterogeneity of individuals (Bruno et al. 2016). The idea is to investigate economic phenomena not as derived from deterministic, predictable, and mechanic dynamics but as history-dependent, path-dependent, organic, and continuously evolving processes.
In economics at least, a complexity approach paves the way to studying:
- a.The economy as a global system rather than a mechanics converging to a general and stable equilibrium.
- b.Emergence which relates to the dynamic nature of interactions between components in a system.
- c.Path dependence meaning just that: where we are today is a result of what has happened in the past.
Thus complex systems, such as todayâs globalised economy, are dynamic, nonlinear systems with multiple equilibriums and disequilibria, evolving and self-organising in time and space characterised by historical dependencies, complex dynamics, and thresholds. One step forward towards complexity economics puts the focus on constant disequilibrium or continuously shifting micro-equilibrium points rather than a predefined general equilibrium point. In sports economics, such a step forward has been taken with the publication of a âdisequilibrium sports economicsâ book (Andreff 2015).
The economic policy implication is that a correct policy must react to the evolution of a system rather than pushing it in a (presumably) desired optimal equilibrium directionâa Pareto-improving policy in mainstream economics. The underlying radical message of complexity economics is that organisation and not efficiency should be the key concern of economics that would drive to investigating the interactions of individuals rather than the individuals, as stressed by Kirman (2011).
Another dimension is the increasing complexity of a globalised economy in the real world. That globalisation has made the economy very complex can be witnessed in everyoneâs daily life. Buy a sport T-shirt and you will be able to check that it has been shaped by an Italian designer with American software, and then produced with Western African cotton and polyester buttons manufactured in China out of Indonesian petroleum. The complexity of a globalised economy has gone so far that multinational companies (MNCs) have elaborated on so-called global strategies to trade-off between different potential host countries before investing abroad (Andreff 1999; Michalet 1997). To manage global complexity MNCs have developed sophisticated managerial tools such as non-market transfer pricing, hedging, leads and lags, tax optimisation, and sometimes fraudulent or borderline strategies like tax evasion through tax havens. However, foreign direct investment and production relocation in tune with these strategies take some time to be implemented by a company.
In some industries where instant trade can be done online, globalisation is much swifter, so fast that trade flows are sometimes unobservable or undetectable, sometimes veiled or hidden on purpose. A first example is the finance and banking sector insofar as with the Internet and globalisation (in particular through offshore centres) money can be instantly transferred from place to place, from country to country, and from a bank account to another one. Such is the complex way that transformed the US subprime crisis into global financial disorder. The latter was due to both the speed of international financial transactions and the complexity of new financial productsâsecuritisation of bad loans, collateralised debt obligations, credit default swaps, mortgage-backed securitiesâfuelled with fraudulent or borderline practices such as fake accounting, short selling, shadow banking, and financial pyramids (Andreff 2013).
Even swifter than international financial transfers throughout a global economy, the most instantaneous international moves of funds have been registered in the past recent years with online betting since bets can be placed and changed by anyone in less than one second through the worldwide web.
1.1.2 Internet and Globalisation of Sports Betting: New Market Behaviour
Gambling on sport results, first of all on soccer matchesâ outcomes, has taken two main forms in the past. Football pools were pari-mutuel competitions where participants whose forecasts are correct share a prize pool that is a predetermined fraction of total stakes. The second form of fixed-odds betting was where a bookmaker accepts bets on soccer outcomes and pays any winnings according to odds quoted at the time the wager is placed (Forrest 2014). Both modes have commonly been subject to restrictions as to availability in all countries of the world.
In that time, the classic betting-related fix was basically initiated to make money. Often deliberate underperformance by one competitor was intended to facilitate making a profit in betting markets operating parallel to the sports contest: Athletes were trading directly in such markets, wagering that their opponent will win, or accepting bribes from third parties who planned to make betting gains from such transactions (Forrest 2017).
Prior to the millennium, few clients had the physical means of placing new bets quickly as they saw a sporting contest evolve. Everything changed in the twenty-first century with the emergence of a global market for sport bets based on Internet communication. The product offered by local bookmakers, including illegal street bookmakers, became relatively less attractive when online betting emerged with its round-the-clock access to in-play betting on a wide variety of events worldwide. Everything changed as Internet penetration grew and broadband speeds increased. Internet and mobile telephone technology gave many the means of betting onlineâand bookmakers learned to programme computers to adjust odds automatically in response both to events, such as the scoring of a goal, and to betting partners and volumes. With new technologies, âbookmakers learned routinely to offer odds during a match by developing statistical algorithms to automate odds-setting, with odds updated with every significant event in the matchâ (Forrest 2018, 101).
As analysed by David Forrest in his different articles, technological change also enabled the broadcast and streaming of multiple sports events which helped the sport betting market to grow faster because watching and betting on sport became complementary activities: the one makes the other more excitingâfor example, betting makes the gambler a stakeholder in the outcome of a game and so even those who are neutral can then find the event more thrilling to view. Consumers could construct what essentially emerged as a new leisure product: following a match on television or through a streaming service and, simultaneously, trading on the betting market through a personal computer or mobile telephone. This has extended the sports betting market to non-fans and consumers with no allegiance with a sport or a team, and explains the popularity of in-play betting (also coined live be...