The Sordid History Of Match-Fixing And Illegal Sports Wagers

October 12, 2021

By Aara Ramesh

Earlier this year, two of the most traditionally prestigious tournaments in the global tennis circuit (the French Open and Wimbledon) were dogged by accusations of match-fixing. This put authorities on the alert for something similar happening at the U.S. Open. Similarly, in April, it was reported that U.S. and Australian authorities were investigating illegal betting and match-fixing claims within the eSports industry, which encompasses competitive, organized video gaming tournaments that often have prizes worth millions of dollars and millions of viewers globally.

While one of these sports is centuries old, the other is a fairly recent phenomenon. Both, however, are characterized by the fact that sports and betting on sports as a whole gained popularity during the pandemic as a result of more time spent online and increased isolation due to Covid-19 restrictions. Like all sports in all countries, they also share in common worries over match-fixing.

Last week, we wrote about how just as long as humans have engaged in some form of sport, we have also been betting on the outcomes of said sports. In today’s piece, we take a look at another long-term relationship — that between sports betting and match-fixing.

The Legality Of Wagering On Sports

Throughout the 1900s, regardless of whether gambling was legal or not, sports betting thrived in the U.S. Most commonly, however, it was linked to organized criminal syndicates that could bribe or threaten players to throw games so as to cash in big on bets. This negative association led to many professional leagues decrying sports betting “on the grounds of maintaining integrity for their respective sports.”

Then, in 1989, Pete Rose, a player and manager for the Cincinnati Reds, became embroiled in scandal when it emerged that he had been, for years, betting on the outcomes of some of the team’s games. Though it was not his intention, his betting patterns “gave inside information to bookkeepers and almost certainly influenced his decision-making process as a manager.”

The resulting outcry set the backdrop for Congress passing, in 1992, the Professional and Amateur Sports Protection Act (PASPA), which in essence outlawed sports betting in nearly every state, leaving Nevada officially the only state where placing single bets on different sporting events was legal.

Over the next two and a half decades, the debate over sports betting ebbed and flowed, with leagues, regulators, lawmakers, team owners, players, and all manner of stakeholders going back and forth on the pros and cons. Eventually, after a six-year legal battle, the matter reached the U.S. Supreme Court.

Regulating the market, advocates said, would result in billions of dollars in tax revenue directed towards the government for the provision of public goods, rather than to organized criminals and their illicit activities. In turn, a significant portion of law enforcement resources would be freed up to focus on other crimes.

Regulations would bring with it things like a concrete audit trail that could help law enforcement trace those who place unusual bets that could be a sign of match-fixing, which has been described as a “low-risk enterprise with the potential for large rewards.”  It would also allow for greater consumer protection, would provide benefits like jobs for communities, and would “safeguard” the integrity of the sport. 

Subsequently, in May 2018, the Supreme Court in a 6–3 decision in the case Murphy v. National Collegiate Athletic Association struck down PASPA, in effect making it legal for states to establish sports betting within their jurisdictions. As a result, now three years later, 27 states and the District of Columbia have legalized sports gambling, with many more negotiating to do so as well. 

Sports, Betting, And Rigging

Before the Supreme Court struck down PASPA, the American Gaming Association (AGA) held a law enforcement summit on the need to tackle the illegal sports betting market and how authorities could go about doing so. At that time, the AGA estimated that the market for what was then illegal sports gambling could be worth anywhere between $150 billion and $500 billion. With figures of that magnitude, experts said at the time, it’s no wonder that sports betting became an attractive target for criminal elements.

Today, some estimates say the global sports betting market is worth around $1.7 trillion, making it an attractive market for criminals to exploit. The U.S. sports gambling market alone is said to be worth between $67 billion and $400 billion, with rapid growth predicted as more states legalize the practice. 

Match-fixing refers to “deliberate manipulation of sports events, involving betting on previously agreed wins, defeats or even just individual games in a match.” It has long been a problem that has plagued sports like soccer, cricket, and darts, which are popular in countries that allow people to bet on sporting outcomes.

One market to look at for inspiration and lessons learned is that of the UK. One British economist drew parallels between the UK and the U.S. in terms of the sports betting industry as follows: “There is a large middle class with disposable income, a passion for sports, and – despite the previous American law – a desire to gamble.”

Sports betting was legalized in Great Britain in 1961, and since then the industry has thrived. At the same time, though more rigging scandals have come to light, match-fixing has also reduced overall, as has the role of organized crime within that niche. The increased regulation and scrutiny that comes with legalizing the market that have long been championed by advocates has made it more difficult to launder money or cheat through illegal bets and match-fixing.

The British government’s Gambling Commission has a Sports Betting Intelligence Unit (SBIU) and many of the biggest betting companies in the UK have data analysis teams who monitor bets being placed for any unusual patterns that may indicate a match has been fixed. It has been found that just legalizing wagering on sports and paying athletes better have reduced the risk of games being rigged. 

Focal Points For The American Market

There are multiple factors that have regulators worried as sports betting becomes more ubiquitous, particularly in relation to match-fixing or rigging in various sports, which can ruin the game for fans, casual bettors, and players alike, as well as for betting companies and team owners who stand to lose significant amounts of money through such acts.

One is that the idea of casual wagering on one’s team is becoming more attractive to average people making small-dollar bets. Today, you can find 24/7 coverage of sports, and people are spending more time online. The gaming and gambling industry as a whole is moving online at a rapid pace — one that was only hastened by the pandemic. Fixing a game can deprive these bettors of their winnings.

“The danger of match fixing is possible in any major sporting event. Criminal groups could potentially view these events as opportunities to leverage wagers through match fixing,” according to the Federal Bureau of Investigation (FBI). “The threat posed by match fixing will be present so long as criminal elements seek to leverage sporting competitions for illicit gains and illegal gambling exists.”

Also of growing concern in an increasingly digital space is the use of untraceable, unregulated cryptocurrencies to make these bets and fix matches. This provides a fresh avenue to savvy criminals who are constantly looking for loopholes to exploit in the system.

There is no doubt that the American sports betting industry is still in a nascent stage, with much to be learned and fine-tuned. Experts say that a crucial step at this juncture is to criminalize match-fixing so that malicious actors cannot take advantage. To not do so, they say, would be to compromise the integrity of the game and the fan experience.

The FBI has already set up an Integrity in Sport and Gaming Initiative (ISG) that is “designed to tackle illegal sports gambling and combat threats of influence from criminal enterprises.” The ISG is tied to an anti-doping law passed earlier this year that can be applied to anyone conspiring to cheat in major sporting events, like the Olympics.

Match-fixing has, in the past, left an unwelcome stain on American sports, the most infamous of which was the “Black Sox” scandal of 1919, in which the Chicago White Sox threw the World Series much to the disgust of spectators. That, however, is a story we will leave for the next part of this mini-series on sports betting.