Pulse
IBIA: the cornerstones of an optimum betting market
By William - 4 January 2022
Maintaining the integrity of sport and betting markets is fundamental to the business of regulated sports betting operators. Match fixing continues to plague sports and sports betting corruption continues to present a danger to consumers and the integrity of sporting events.
Governments working with the industry along with ever increasing fraud detection measures have served to highlight the scale of the problem shedding light on new ways organised criminals are using to manipulate match results. As the market continues to expand and new markets open up, especially in more vulnerable markets such as Africa and Latin America, the need for the close monitoring of sporting events will become increasingly important.
Both the sports betting industry and sports organisations have recognised that they must continue to do all they can to protect the integrity of sports and work together to prevent match fixing. Working alongside government bodies and sporting associations, there is clear evidence that these partnerships will continue to grow. Furthermore, the sports betting industry is working in an increasingly coordinated way with governments and sporting bodies to identify potentially fixed results.
So, as match-fixing evolves what is being done to protect sports from criminal elements? Which sports are most vulnerable to match fixing and why? How can the sports betting industry work with government agencies to undermine the efforts of criminals and what is the best approach to prevent match fixing in the future?
Khalid Ali, Chief Executive Officer of The International Betting Integrity Association, explains why effective regulation, internationally competitive tax, wide product availability, integrity provisions and the availability to advertise are the cornerstones of a successful, well-regulated betting framework.
There is no doubt that sport betting corruption presents a danger to consumers and the integrity of sporting events. But is there evidence to suggest that match fixing is getting worse? If so, what new methods are criminals coming up with to manipulate the results of matches?
The extent of match-fixing globally, across regulated and unregulated betting, isn’t fully known. Some parties have tried to estimate it but as there is little robust data for the unregulated market, in particular, there is no verifiable and secure dataset available.
It is important to recognise that many poorly regulated betting operators, and those in the unregulated market, simply don’t report suspicious betting and potential match-fixing. Law enforcement authorities like Europol and Interpol cite these operators as the ones most likely to be targeted and utilised by corrupters.
From IBIA’s data alone, you can see that the situation is quite fluid at present, especially with the impact of the pandemic which brought an increased focus on certain sports which hadn’t been the case previously. Albeit it is important to factor in that IBIA is constantly growing and so is its market coverage and any consideration of alert numbers needs to take that into account.
At present, we are expecting that the 2021 alert figure will be close to the mid-point of the previous four years. In other words, we don’t expect any meaningful change in the overall suspicious betting alert position for IBIA members, although the sports on which those alerts are generated may show an evolution.
The tactics employed by corrupters are constantly shifting. IBIA and its members are aware of this. Obviously, it wouldn’t be prudent to start listing the types of monitoring activity IBIA and its members conduct and thereby giving corrupters the opportunity to understand our counter-corruption tactics. Suffice to say that it is a fight where IBIA members make a sizeable investment in measures to identify and punish corruption, and where that is committed long-term.
Know your customer and know your transactions are the most effective ways to monitor betting integrity. The bigger that IBIA’s membership gets – which already covers the largest regulated betting market share of any transaction-based monitoring system at $137bn of betting turnover per annum – the harder that we can make it for corrupters to bypass security measures. Those operators outside of the IBIA shield are at a sizeable disadvantage and at a far greater chance of being targeted and being the victims of fraud, along with the loss in reputation and income that goes with that.
How big is the problem currently? How much do legal operators lose due to match fixing?
Whilst there is no reliable value for suspicious betting and potential match-fixing covering the global regulated and unregulated betting market, IBIA’s Optimum Betting Market study does contain a reasonably reliable calculation for the cost of this fraudulent activity solely to the regulated sector.
H2 Gambling Capital conducted an examination of a detailed set of data unique to IBIA operators and a consideration of the related position within the wider regulated sector. This evidenced-based evaluation is founded on a set of robust operator market and alert data from a substantial part of the sector. That included customer transactional data (e.g., bet size, average odds, amounts won) from those proven corrupted events, along with analysis of sporting tribunal and criminal judgments, and media reports of confirmed corruption, amongst other data.
The subsequent analysis calculated that the global regulated betting industry loses in the range of c.$19m – $28m per annum from match- fixing, with a reasonable mid-point being around $25m per annum. It is important to remember that this is just the regulated sector. Losses for the unregulated sector are too difficult to quantify with any comparable assessment.
The IBIA recently published a report: An Optimum Betting Market. Could you highlight some of its findings when it comes to the best regulatory approach when it comes to preventing match fixing?
The Optimum Betting Market study sought to focus on three main themes: evaluate various betting frameworks globally; examine betting restrictions and the cost of match fixing; and identify best practice models for an optimum betting market.
To achieve these objectives, an independent assessment of the success of the regulatory position for betting in twenty jurisdictions across six continents and covering differing licensing models was conducted. Five key criteria – regulation, taxation, product, integrity, and advertising – were identified as the cornerstones of a successful regulatory market structure for land-based and online betting.
Each was allotted a measurable score and employed as a benchmark to assess the prevailing framework in a select number of jurisdictions globally. The integrity aspect covers issues such as the requirement to report suspicious betting activity, integrity guidance material for operators, establishment of national integrity platforms and obligation to be part of a monitoring association.
There is too much detail to cover regarding that assessment, and I’d encourage anyone interested to read the report. In short, the assessment determined ten key pillars backed-up by a robust evidence base that are most likely to generate a successful well-regulated betting framework, in other words and ‘optimum betting market’.
Effective regulation, internationally competitive tax, wide product availability, integrity provisions and the availability to advertise are the cornerstones of that optimum model. Those pillars are key to achieving a high channelisation of consumers to licensed onshore operators and to maintaining the integrity of that market and related sports events on which betting takes place.
The 10 pillars of an optimum betting market:
- Regulated betting available through land- based and online channels
- Unlimited licences or, if limited, enough to maintain market attractiveness
- Licensing fees to reflect regulatory costs
- Robust but practical player protection measures
- Internationally competitive GGR betting tax (no higher than 20 per cent)
- No overly burdensome additional taxation
- Wide product offering – multiple channels: fixed odds, pool, exchange and spread betting
- Wide product offering – permitted bet types e.g., in-play: no significant restrictions
- Betting integrity protocols
- Balanced advertising and sponsorship parameters
Should certain leagues or betting products be banned or does this just make the problem worse? Are there certain sports or betting products that are particularly vulnerable to match fixing?
There is no integrity benefit from banning markets within a licensing jurisdiction, most notably because those banned markets will continue to be offered elsewhere around the globe, notably in poorly or unregulated markets. Banning certain products is actually counterproductive from that perspective, in that it serves to drive consumers away from the regulated market.
There is a general misconception about certain markets being more susceptible to corruption, which the Optimum Betting Market study dispels. The report is full of a wealth of verifiable data challenging many of the myths that have been promoted on supposed integrity protection grounds but which are more likely to simply be being used as a means to try and limit the commercial and product evolution within the private regulated betting sector, which has been driven by consumer demand for such products.
For example, there remains a general perception that some secondary betting markets are at greater risk of corruption. However, the data challenges this assertion. In football, for example, nine out of 10 (91 per cent) of all alerts in the four-year period 2017-2020 took place on primary betting markets (e.g., full time result/number of goals) compared to secondary markets (e.g., corners, yellow cards).
The operators involved in this study had c.$11bn (€9bn) of turnover on secondary markets in 2019, compared to an average of only five suspicious betting alerts on those markets during 2017-2020. That amounts to one suspicious alert on secondary markets for every $2.2bn (€1.8bn) of turnover on those markets. There is a clear and significant consumer demand for those secondary markets, but a relatively negligible level of risk with IBIA members.
In-play betting is another product that is often demonised. However, the study shows that whilst almost three quarters (74 per cent) of all global football betting turnover is placed on in- play markets ($107bn or €90bn), only 38 per cent of football alerts and potential corrupt activity is solely attributed to that type of betting.
Whereas such activity can be attributed (in part or full) to 62 per cent of pre-match betting activity. In-play betting is not, in itself, a driver of integrity issues and the data shows that potentially corrupt betting activity is, in general, just as likely to have taken place pre-match as in-play in football.
It is important that the scale of corruption on well-regulated markets and operators be viewed in context. Operators who contributed to the report offered betting on over 500,000 sports matches, or 650,000 events including horse racing, per annum. Of these, 99.96 per cent had no suspicious betting alerts, meaning that there was an alert on one in every 2,700 sporting events on which betting was offered.
From an individual sport perspective, 0.03 per cent of matches were flagged for potential integrity issues in football, or that 99.97 per cent on which betting activity took place saw no potential integrity issues on IBIA monitored markets. Suspicious betting activity was identified on only 0.02 per cent of basketball matches offered for betting by IBIA members, meaning that 99.98 per cent had no integrity issues identified.
The study has the most extensive and detailed collection of market information that has ever been assembled and there is simply too much data to cover here. Those interested are encouraged to read the report, which is now available in Spanish and Portuguese, in addition to the original English version. The feedback received regarding the report and its contents have been overwhelmingly positive.
While data supply companies are playing an increasingly crucial role when it comes to protecting the integrity of sports, do you think that there is a need for regulation of this sector so that they may operate under a set of global best practice standards?
The provision and use of sporting event data has become an increasingly important aspect of the regulated betting market, notably driven by global consumer demand for product choice and access. The security and integrity of that data has correspondingly taken on increased significance.
Following discussions with stakeholders, and in acknowledgment of a general lack of formal regulation and licensing in aspects of the data collation and supply chain, IBIA has developed and promoted a data collation process that endorses and verifies a set of minimum data standards.
IBIA believes that this is an effective means of achieving an approach which best serves to protect the integrity of sport, its data, betting markets generated by that data and consumers enjoying those products. No data approach is infallible or immune from potential corruption, but measures can and should be taken to guard against such illicit activity and effective controls can minimise the associated risks. The IBIA Data Standards is a tool designed to achieve this through a self-regulatory approach.
Major data companies Stats Perform and Sportradar have both passed the auditing process thereby receiving the Data Standards kitemark and have joined the IBIA Data Standards Steering Group, which also involves IMG Arena as an observer.
The first meeting has taken place and discussions have been very positive from an integrity perspective and to delivering joint actions. Sports can also have an important impact in this area by setting clear parameters regarding the sale of their data, and a number of sports and other stakeholders have expressed an interest in engaging with the Steering Group.
Are sporting bodies doing enough to prevent match fixing? What more can they do to eliminate sports betting corruption?
There are some well-resourced integrity units within sport like the ITIA in tennis and the IOC’s integrity unit, which set the bar in terms of their protocols and effectiveness. This is a critical element for any sport. There is however a limit to the investigative actions that sports can undertake and the penalties they can impose, and IBIA would like to see more law enforcement action both nationally and internationally.
We’d also like sports to consider the probity of the betting operators they authorise their event data to be sold to. Notably to ensure that those operators are committed, not just in perception, but in reality, to protecting the integrity of sport and to monitoring and reporting suspicious betting to the relevant authorities.
It is undoubtedly the case that selling event data that facilitates betting markets to operators who are unregulated or operating from poorly regulated jurisdictions such as Curacao or the Philippines will significantly heighten the integrity risk for a sport.
Why is it that Asia is the epicentre of modern game-fixing? Considering that many of these markets are unregulated, is there anything that can be realistically done to prevent Asian betting syndicates from tampering with the outcome of games?
The lack of gambling regulation across much of Asia has led to a significant unregulated market evolving. That involves direct links to criminality. Europol published a report in 2020 highlighting the link between sports corruption and organised crime: the characteristics of criminal networks, their structure and their modus operandi.
In addition, the report analyses the different types of match-fixing as the most prominent form of sports corruption monitored by Europol.
That report stated that: “The Asian betting market has been the preferred choice for OCGs [organised crime groups] due to two main reasons: the high-liquidity of this market offering higher winning rewards; and the most remarkable advantage of ensuring a high degree of anonymity and consequent lack of traceability that the multi-layer ‘agent system’ offers. Asian bookmakers operate on a low margin/high turnover business model. Bets may be placed via the phone, via betting shops or via internet betting websites. These two factors combined make this system favourable to OCGs for carrying out their activities in this field.”
The key to addressing this is to establish well- regulated betting markets in Asia with requirements on operators to monitor and report suspicious betting, as is the case across much of Europe and now North America. In some cases such as Holland, Germany and Ontario, those regulatory regimes also require operators to be part of an international integrity monitoring system such as IBIA.
As the Europol report points out, well-regulated operators, as in Europe, often restrict stakes, cooperate with law enforcement investigations (e.g., disclosing personal details of suspicious betting activities) and may ban customers from betting in suspicious cases or even temporarily freeze suspicious clients’ accounts as a means of deterring corruption and maintaining the integrity of markets.
Isn’t there a danger that by flagging up a potential fixed match or in-game event that someone’s career might be ruined? What steps can be taken to prevent this from happening? Is there a risk that mistakes may be made and integrity services might act overzealously?
Fundamentally, this is the domain of sports and law enforcement. IBIA and its members identify and pass on suspicious betting data which we hope will lead to sanctions being placed on those proven to be involved in corruption.
Under the terms of our information sharing MoU we only disclose information to the relevant investigatory body such as a sporting integrity unit and we won’t make anything public. The association has no role in how that might then be communicated publicly, either by a sport or public authority.
IBIA is also not an investigatory body, nor does it have any enforcement powers with regard to sporting participants. All we ask is that sports and public authorities, such as gambling regulators and law enforcement, thoroughly investigate the suspicious betting information we provide to them and, where corruption is proven, impose robust sanctions. That process, where executed effectively, is a major deterrent to further corruption taking place.
The International Betting Integrity Association is the leading global voice on integrity for the licensed betting industry. It is run by operators for operators, protecting its members from corruption through collective action. Its monitoring and alert platform is a highly effective anti-corruption tool that detects and reports suspicious activity on its members’ betting markets.
The association has longstanding information sharing partnerships with leading sports and gambling regulators to utilise its data and prosecute corruption. It represents the sector at high-level policy discussion forums such as the IOC, UN, Council of Europe and European Commission.
IBIA represents around 85 retail and online/remote sports betting brands, including many globally recognised household names across six continents, and covering US$137bn of global betting turnover per annum through their regulated businesses.
