Preventing Game Fixing in a Legal Sports Betting Era - Computronix Computronix

Preventing Game Fixing in a Legal Sports Betting Era

On July 24, 2023, the National Football League indefinitely suspended Denver Broncos defensive end Eyioma Uwazurike for betting on NFL games during the 2022 season. Uwazurike became the 10th player to be suspended in the 2023 offseason for gambling on games and/or betting on other sports while in NFL locker rooms. This latest ban means five NFL players in four years have been suspended for an entire season, a notable trend following decades without comparable punishments in the league. The severity of these suspensions is commensurate with the potential risks for the integrity of the NFL should evidence ever emerge indicating potential game fixing.

While the suspension trend is worrisome, the specter of potential gaming fixing in the NFL still presents as relatively small and contained. As an indication of how systemic game fixing can become within a sporting league, an expose by the Telegraph alleged that 42 per cent of First Division matches in the 2015 Canadian Soccer League season showed signs of suspicious betting activity, resulting in an estimated £4.5 million in potential “fraudulent betting profits.” Summarizing the global scope of the issue, SportRadar, detected an astonishing 1,212 suspicious matches across 12 different sports in a 2022 Report on Betting Corruption and Match Fixing.

Eye-opening numbers such as this are grabbing the attention of government gaming regulators across North America, who are increasingly being tasked to help combat the growing threat of game fixing in the wake of the rapid and ubiquitous adoption of legal sports betting in their respective jurisdictions. In North America, where public awareness of game fixing is most commonly associated with the infamous ‘Black Sox Scandal’ in Major League Baseball over a century ago, it is likely that a false sense of security exists towards the potentially severe impacts of fixed games. Given the sheer volume of transactions achievable in the online sports betting marketplace, it is now possible for betting syndicates to target even smaller grass roots sporting leagues—a reality that threatens the integrity of virtually the entire sporting landscape.

For those unfamiliar with the specifics of game/match fixing, an excellent definition is offered in the White Paper, Match Manipulation and Gambling: A Growing Threat to Canadian Sports Integrity.

Match fixing involves the deliberate and coordinated influence of the outcome of a sporting contest or elements within the contest typically involving a player, game official, coach, or other staff official who has been compromised through the influence of another party. The parties to a fix typically involve the players or officials who in carrying out the fix become known as corruptees and those perpetrating the fix known at corruptors. This influence comes in the form of financial bribes, as well as physical or other threats. Of course, other parties to a fix include those who knowingly bet on fixed matches and benefit financially and other legal bettors who may suffer financial losses.”

The Consequences of Game Fixing

 

To fully appreciate the severity and repercussions of game fixing, the key threats of the issue are identified as follows:

  • Game fixing funds organized crime and is now one of the most profitable forms of money laundering.
  • Game fixing is increasingly targeting lower tier leagues and events where athletes earn less and are more vulnerable to potential bribes or coercion.
  • Athletes who take part in game fixing (whether willingly or via coercion) are jeopardizing their careers. Older athletes nearing the end of their earning careers are particularly vulnerable.
  • Sporting leagues, teams, and individual players can incur financial losses from game fixing scandals including loss of sponsorships and media coverage.
  • Ultimately, the average sports fan can lose confidence in the product, lessening gate receipts and television advertising revenues from diminished viewership.
  • Akin to the stock market, which is heavily regulated to prevent insider trading, the potential prevalence of game fixing attacks the core integrity that undergirds professional sports leagues, thus carrying the potential to create full system collapse if left unchecked.

Ironically, while much of the media coverage on the growing dangers of game fixing focuses on the threat potential increasing due to the growth and prevalence of legal sports betting, it is the establishment of a legally regulated marketplace that may ultimately provide the most robust control mechanisms to protect the integrity of North American athletics. Game fixing is typically caught through ‘big data’ analysis of global betting patterns and the early detection of anomalous activity within these patterns (e.g. uncommonly large wagers on highly specific betting outcomes that speak to the possibility of ‘inside information’). An unregulated betting marketplace where bettors can transact with minimal oversight is effective cover for bad actors keen to conceal betting anomalies indicative of potential game fixing. In contrast, a legally regulated sports betting marketplace facilitates improved KYC transparency and the ability to monitor data pertinent to potential game fixing, particularly when fortified with the growing capabilities of Artificial Intelligence.

AI Proving Effective in Detecting Game Fixing

 

An example of the effectiveness of AI in this arena is Switzerland’s SportRadar. Leveraging their proprietary Universal Fraud Detection System (UFDS), SportRadar provides ‘integrity services’ to several of the largest professional sporting leagues in the world. In fact, UFDS is offered free of charge to over 170 sporting leagues to track more than 30 billion odds changes from in excess of 600 betting operators per year. In the aforementioned 2022 Report on Betting Corruption and Match Fixing, SportRadar states, “AI is enabling us to access even deeper insights by monitoring anonymized account level or customer level data, aggregated from global bookmakers, to gain insight into otherwise undetectable micro-level suspicious betting activity.”

Such insights are contributing to effective investigations and subsequent charges with SportRadar reporting, “In 2022, a record 169 sanctions spanning 21 different countries utilising Sportradar Integrity Services data were imposed by sport federations or criminal courts on those deemed guilty of cheating sport and breaking the law.”

So, how does AI work to combat the growing threat of game fixing and how can it be leveraged by gaming regulators at the state and provincial level?

The Power of Pattern Recognition

 

Pattern RecognitonIt starts with the data that regulators are most interested in detecting, anomalous betting behaviours that are indicative of bettors leveraging inside knowledge of an upcoming contest to maximize their returns—particularly those behaviors that stand out from the norm in terms of the amount of risk vs reward that bettors are typically willing to bear.

By utilizing the power of machine learning algorithms, AI systems directed to detect potential gaming fixing patterns can process massive amounts of real-time data to flag suspicious betting patterns that human centric detection models would likely overlook. Particularly in a legally regulated environment where betting operators are cooperating to provide the access necessary to monitor the largest pool of ‘big data’ possible, AI learning models can analyze both historical and real-time data from multiple sources including deposit behaviors, transaction records, and wagering patterns, to flag potentially fraudulent activities. By using predictive analytics to forecast such activities before they occur, these tools enable government regulators to proactively intervene and prevent game fixing before it occurs—a critical outcome to protect the integrity of sporting leagues of all sizes.

A Global Enforcement Model for a Global Threat

 

Armed with the critical indicators of potential fraud detected by AI, government regulators are properly equipped to carry out effective investigations. By pooling resources and knowledge, regulators working in tandem with league personnel can collaborate and share data. An example of such collaboration is SportRadar’s Integrity Exchange wherein betting activity flagged by 37 participating betting operators and partners across 40 countries opens a communication channel where data and analysis can be shared on potentially suspicious sporting events. The Single Account View, a similar initiative by the UK Gambling Commission facilitates a coherent view of a bettor across multiple betting operators, affording regulators the transparency to better mitigate fraudulent behaviour AND provide better protections to gamblers seeking to self-exclude or enforce strict limits on their betting activities.

Since the effort to detect game fixing before it occurs is so dependent on the global cooperation of regulatory agencies and betting operators, government regulators are being strongly encouraged to formalize specific legislation to address match fixing including ongoing participation in centralized fraud detection and response capabilities leveraging greater international connectivity.

One such initiative is the Macolin Convention which aims to prevent, detect, and punish match fixing in sport. Drafted by the Council of Europe Convention on the Manipulation of Sports Competitions, this international multilateral treaty is described as “a ground-breaking legal instrument and the only rule of international law on the subject to currently exist. The treaty provides common definitions, as well as unique international co-operation mechanisms such as the “National Platforms.”  Even though the Macolin Convention is a policy instrument emanating from Europe, the Council of Europe is extremely mindful of the global nature and threat of match manipulation and is therefore encouraging non-European countries to become signatories.

The evaluation and potential adoption of such policy tools is overdue in Canada which is limited in its ability to prosecute match fixing because there are no specific provisions in the Criminal Code that prevent such activity (Source).

The situation is much the same in the United States where similar gaps in legislation exist. Where existing state laws do address sports corruption, they principally target sports bribery under penal code analogues to the federal Sports Bribery Act, which makes it a felony to “influence . . . by bribery any sporting contest.” Such provisions do not cover non-bribery situations where other means are used to corrupt athletic contests, such as extortion, blackmail, and duress. Nor does the sports bribery offense address tipping of confidential information or betting on games by a sports participant who has the ability to affect outcomes (Source).

Effective Gaming Licensing the Key to a Properly Regulated Market

 

From the usage of advanced AI tools to detect anomalous wagering patterns, to betting operators pooling resources globally to achieve true ‘big data’ threat detection, to government legislators formalizing laws and deterrents that specifically target the growing threat of game fixing, one common denominator begins to surface. To create the proper foundation to prevent game fixing and preserve the integrity of sporting leagues, it is absolutely mission critical that betting operators are thoroughly vetted in a robust gaming licensing process that results in a transparent and cooperative regulated betting marketplace. Through initiatives like those led by the UK Gambling Commission and SportRadar, betting operators are increasingly willing to share data, resources, and best practices to support global initiatives designed to prevent fraud and protect bettors, thus creating a sustainable industry for all.  Leveraging platforms like POSSE GCS, a proven Gaming Control Solution for licensing, enforcement, and regulatory compliance, today’s modern government gaming agencies are properly equipped to support such initiatives with an out-of-the-box solution for risk-based regulation of betting operators, both online and off.

For ‘Powered by POSSE’ gaming clients like the Alcohol Gaming Commission of Ontario (AGCO), efforts to achieve a fully regulated gaming marketplace are clearly bearing fruit with a recent Ipsos survey indicating that 85 per cent of players are playing on regulated sites at the one-year anniversary of Ontario’s Internet Gaming Market.

“Since its launch in April 2022, Ontario’s igaming market has displaced the existing unregulated market and made Ontario an internationally recognized leader in this industry,” said Doug Downey, Attorney General of Ontario. “We are truly proud of this strong, responsible, competitive online gaming model.”

For those worried about the rapid adoption of online sports betting and the potential threats associated with game fixing, the good news in Ontario at least is that bettors are also rapidly moving to a fully regulated environment where suitable tools, protections, and a robust regulatory framework are working in tandem to ensure a safe and secure environment for all parties. While much still needs to be done in all jurisdictions to build a truly global framework to prevent game fixing, it is encouraging to realize that the necessary foundations to do so are all already being put in place by forward thinking government gaming agencies robustly regulating their license portfolio with the modern technology solutions and information architecture needed to excel.

Preventing Game Fixing