Place Your Bets

Place Your Bets
In this article, written exclusively for Soccerex, Pedro Trengrouse and Flavio Zveiter look at the landscape of sports betting today, its global appeal, and discuss the need for legal regulation of betting worldwide.


“The line, it is drawn, and the curse, it is cast
The slow one now will later be fast
As the present now will later be past
The order is rapidly fadin'
And the first one now will later be last
For the times they are a-changin'”

- Bob Dylan

The high growth of sports betting, particularly on-line, can represent the boom or the doom of sports in the 21st century. It all depends on a global effort to regulated it properly, allowing the enhancement of positive interactions with sports instead of just threats to its integrity, as it unfortunately happens almost everywhere nowadays. Sola dosis facit venenum.

Sports betting is the way more and more fans engage with sports nowadays. Just to illustrate that, FIFA's revenues with the FIFA World Cup 2018, adding up TV rights, sponsorship, licensing, ticketing etc, were less than €6 billion whereas the total global betting turnover related to the FIFA World Cup was estimated at €136 billion.

It is important to pinpoint that amongst the 10 biggest economies in the world, only United States (U.S.), where it is estimated that illegal betting reaches over US$200 billion per year, China, Japan and Brazil have not yet regulated proper sports betting.

Nevertheless, although several websites have been concretely offering bets in these countries, the recent U.S. Supreme Court decision allowing sports betting at every state, overruling the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that prevented sports betting beyond Nevada and few others, together with Japan issuing 3 casino licenses and Brazil new legislation on sports betting, sanctioned by the Government in 2018, shall boost sports betting market worldwide to much higher figures than the current estimation of US$3 trillion.

On the other hand, change in modern society is quicker than ever. The radio took 38 years to reach 50 million people; TV, 13; internet, 4; Google, 100 days. Today, 1 billion people interact daily through Facebook. In 2010, 1.8 billion people were connected to the internet; today, 3 billion. By 2025, the UN predicts that the whole world will be online. The speed of transformation is increasing everywhere and even though FIFA World Cup in Russia holds a record global in-home TV audience of almost 3.3 billion viewers, 2.2% more than 2014 edition, hosted in Brazil, the current business model of Sport, primarily based on revenues from TV rights, is most probably going to be replaced to another one much more intertwined with real engagement than pure visibility.

In 2017, for the first time, the investment on advertisement online was higher than on TV: US$205 billion against US$192 billion. At NBC, the 2016 Olympic Games audience was 17% less than 2012. On top of that, TV sport audience is aging: in 2006, the average age of people watching Tennis on TV was 61 years old; Olympic Games, 53; Basketball, 42; Football (Soccer) 39. Nowadays, respectively, 66; 56; 44; 43. Amongst the people born before 1980, 45% prefer sports and 13% e-sports; the millennials, 27% sports and 27% e-sports. Any doubt about figures from generation Z onwards?

Over the last 20 years, the sports betting market has become truly global. A patron in a given country can place bets on online platforms registered in another country on competitions played in a different country. All that live, in real time. The International Center for Sports Security (ICSS) and Sorbonne Université reckon that there are more than 8,000 sports betting operators in the world, 80% located in low taxes territories such as Alderney, Gibraltar, Isle of Man, Malta, the Cagayan province in the Philippines, the Kahnawake territories in Quebec, Antigua and Barbuda, Costa Rica et cetera.

It is therefore of the utmost importance that sports organizations look at sports betting as global threat as well as a potential source of revenue, joining efforts to secure an appropriate regulation of sports betting market worldwide as it uses sports competitions content, increasing risks of match-manipulation without any investment or compensation to sports organizations, which cannot be satisfied just getting some sort of sponsorship once in a while from sports betting operators.

There are some organizations already working towards a global legal framework for sport betting. The United Nations Educational, Scientific and Cultural Organization (UNESCO), who played a pivotal role in the fight against doping and the creation of the World Antidoping Agency (WADA), and the Sport Integrity Global Alliance (SIGA) are encouraging governments and sports bodies to enact the necessary laws and regulations to prevent and combat all forms of illegal sports betting in order to eradicate sports betting fraud and match-fixing, while recognising sports competitions organisers’ rights and safeguarding the integrity of sports competitions and the economic viability and social role of sport.

They support the establishment of a global independent betting monitoring platform, capable of providing sport integrity intelligence alerts to sporting authorities, law enforcement, betting regulators and operators and government stakeholders to get early warning advice on corrupt practices, potential manipulation of sports competitions and illicit methodologies and criminal networks activities. In addition such a platform would ensure the basis for adequate cooperation and information sharing providing reliable, accurate and independent data for sports disciplinary procedures and evidence for criminal prosecution.

The time is ripe for an intelligent approach towards sports betting that allows the market to boom as well as guarantees a legal and safe way for fans to place bets on sporting events, addressing vulnerable people with policies for responsible gaming, protecting the integrity of sports and recognizing that sports organizations provide the foundation for sports betting and bear its risks. In the U.S., NBA and the main sports leagues are asking for a compensation from sports betting operators: 1% of the total amount bet on its games. They also ask the right to restrict wagering on their own events as certain types of bets are more susceptible to manipulation than others, such as whether a player will commit the first foul of the game. Different sports would have different types of bets, and so each league needs the ability to approve the types of wagering that are offered.

Whoever is not at the table is on the menu. As it happens in the fight against doping, all stakeholders have a role to play in sports betting regulation, particularly sports organizations, as their core business is at stake. Consumers are dictating what the sport business will look like in the 21st century and sports-betting is definitely a key part of it. What role will sports organizations play? Will they act as mere spectators or will they work to keep sports safe from match fixing and make sports betting a new source of revenue for sports? The time is ripe for a joint effort from Governments and Sports Organizations to ensure proper regulation of the sports betting market around the world and to ensure the integrity of competitions. The best is yet to come, so place your bets!


 

Pedro Trengrouse is a lawyer, FIFA Master alumni, Harvard Visiting Scholar (Fall 14), Professor at Fundação Getulio Vargas and Soccerex panelist

 

Flavio Zveiter is a lawyer, FIFA Independent Ethics Committee Member and NYU Master student

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