Use and misuse of regulation in fighting betting related corruption in sport - the German example
Betting related corruption in sports has increased considerably during the last years, heavily driven by the globalization and digitalization of the worldwide betting market. Using recent data by Sportradar, we examine the particular case of manipulation control in the context of betting regulation in Germany. Here, the legislator recently introduced the possibility for private betting companies to legally enter the sports betting market. However, after 3 years by now, none of the planned licenses has been granted to any company, leaving the whole market in a legally unregulated grey area. Instead, further restrictions for many betting types are under discussion (e.g. the ban of almost all live bets), officially motivated by the aim of preventing betting related corruption. Our analysis yields the following results, whose validity is not restricted to Germany: 1) Market regulations causing the growth of illegal/informal/grey betting markets are counterproductive. 2) The delegation of the supervision of betting markets (including fraud detection systems) to an independent authority is recommended. The same applies to the sanctioning of suspected cheaters, which should not be left to the sport federations alone. 3) The government should play the central role in fighting betting related corruption. One fundamental tool for law enforcement is the creation of a legal basis for criminal prosecution. Such a sport-specific element of crime, labelled e.g. sport fraud, could be part of a legislation covering many types of sports manipulation, including doping.