Gambling

Evidence submitted by the Sport and Recreation Alliance (GA 20)

Introduction

1. The Sport and Recreation Alliance is the national independent voice for sport and recreation, representing over 320 member organisations including the national governing bodies of sport. Our members account for 151,000 sports clubs across the UK, catering for some 13 million participants, and the Alliance exists to protect and promote the role of sport and recreation.

2. The Sport and Recreation Alliance provides the chair and the secretariat for the Sports Betting Group (SBG), which was formed following the recommendations in the 2010 Parry Inquiry into Integrity in Sport. The remit of the SBG is to assist and enable sport to put in place the necessary measures to combat match-fixing and suspicious betting- i.e. an appropriate infrastructure (such as rules and regulations to be adhered to by the players and participants), education programmes and governing body intelligence systems and processes for spotting and dealing with match-fixing.

Summary

3. We ask the Select Committee to request that Government:

· Ensures that overseas operators require a UK licence and that they adhere to Licence Condition 15.1.

· Ensures that sport has a say in which type of bets bookmakers can offer (as applies, for example, in Australia)

· Recognises sports’ property rights (as in the latest French legislation)

· Creates a match-fixing/ sports fraud definition (as defined in Poland’s 2010 Sports Act)

· Funds integrity programmes for sport (as is the case with UK Anti- Doping)

Consultation Response

4. The Sports Betting Group has just completed a survey of sports in the UK analysing the state of preparedness with regard to match fixing for each of the national governing bodies involved in the 2012 Olympics along with other professional sports. It is clear that further support and advice is needed to assist many governing bodies to have in place a fit for purpose infrastructure to tackle corruption.

5. There will be betting markets offered on every sporting event in the London 2012 Olympics programme, so it is vital that conditions are in place to support all sports regardless of their size. The way people bet and the types of bet have changed dramatically in recent years. A huge worry is that it is possible nowadays to bet to lose. For example, a clear favourite for a heat could qualify in third place, betting on him or herself to lose that race, and still turn out a competitive performance in the finals. As the host of the 2012 Games, the UK Government and its regulator the Gambling Commission must do everything they can to ensure the Games are free from sports betting related corruption.

6. The Sports Betting Group therefore welcomes the Select Committee’s inquiry into gambling, not least because we are acutely aware that the Government has not satisfactorily addressed the issue of bookmakers based overseas since it published a consultation on the subject in March 2010. It is imperative that the Government does so immediately and that no stone is left unturned in protecting British sport and the 2012 Olympics from corruption.

Q1. How effective the Act has been in its core objectives

7. The Gambling Act 2005 is ineffective in dealing with sports betting. It cannot be anything else when it fails to regulate all betting providers operating in the British market. Legal operators overseas are allowed to take bets on the UK market under a completely different set of regulations to those taking the same bets from the UK. Operators that have moved overseas do not need to comply with UK Gambling Commission licensing conditions, which is completely unfair to operators who remain in the UK (and pay UK taxes). Sports bodies successfully campaigned for Gambling Act regulations to be amended with the introduction of Licence Condition 15.1 which ensures operators provide information to sports governing bodies on irregular betting patterns. Operators based overseas are not obliged to do this. While match-fixing clearly affects bookmakers’ bottom lines, if there is enough uninformed money to balance the market, then a commercial bookmaker will not lose [1] . In this instance, it may not be in the bookmaker’s interest to advertise to clients who believe they have lost a fair bet that irregular bets have been taken. This is to the detriment of sport.

8. Regardless of where the bookmakers reside, the Gambling Act is also flawed as it failed to establish match-fixing itself as a criminal offence (see recommendations from the Parry Report). The Government should clarify the offence of cheating before the 2012 Olympics. Poland has recently done this ahead of the 2012 European Football Championships which are to be held there [2] .

9. The Act also fails to provide for sports to have an input into which types of bets are taken on their events. Sport believes that it should be able to protect its integrity by limiting the types of bets bookmakers are offering. Accordingly, where a sport believes that, based on its particular characteristics, there is a risk to its integrity or reputation if certain bets are offered, it should be able to take appropriate steps in relation to such bets to protect its position. For example, tennis may argue that it should not be possible to bet on a match going to a third and deciding set; there have been reports of players arranging to win one of the first two sets each before playing a competitive third set.

10. The argument that illegal markets will still exist in Asia is valid; however it is disingenuous to suggest that this is a reason for not putting our own house in order. It is important that we do everything possible to prevent match-fixing. This includes educating our players and participants, making it clear that if you fix a match on British soil you are committing a criminal offence, and removing the threat of irregular betting as far as possible.

11. There is a clear failure to support sport in its fight against suspicious betting. Jacques Rogge (IOC President) has declared that irregular betting, not doping, is the biggest threat to the 2012 Olympics. Yet nothing is in place to help sports fund their battle to preserve integrity. UK Anti-Doping receives £6.5m per year [3] from Government; no public funding is given to finance sport’s anti-corruption requirements.

12. While the relationship between the Professional Players Federation, the Remote Gambling Association and three of its members (Ladbrokes, Betfair and bet365), which enables some of the good work that is being carried out in educating players in certain sports is recognised, far more funding is required to meet the cost of properly funded betting integrity education and intelligence programmes across all sports.

Q2. The Financial impact of the Act on the UK gambling industry

13. The liberalisation of the gambling markets has seen huge profits being generated for betting operators. Unfortunately much of this wealth has not been shared with the Treasury because UK taxes have been avoided by operators moving overseas.

14. The betting operators will cite the fact that there is a large return to sport. However, a survey by the Remote Gambling Association showed that around 94% of investment from bookmakers in sport in Europe was due to statutory requirements [4] . It should also be noted that any sponsorship deals made with sports organisations are done for commercial reasons. Betting operators outbid other potential sponsors in order to benefit from the exposure and commercial return gained, not as some sort of altruistic contribution to sport.

15. Betting operators use sport’s products to make huge profits. We recommend that the UK Government (as is the case in France and Australia) recognises that this use of intellectual property should only be permitted where a contract has been negotiated between the operator and the sport on which it wishes to offer bets. Intellectual property is the third largest sector in the UK (after banking and engineering [5] ) and the Government must protect IP in a rapidly growing and, indeed, changing market.

Q3. The effectiveness of the Gambling Commission

16. The Gambling Commission has made progress but is not equipped to cope with the volume of work that it should be taking on. It does not have the resource to investigate all suspicious betting patterns or indeed follow up on all cases that need further investigation. The police, too, have not shown any real interest in taking sports betting fraud cases on, which suggests that a radical rethink of the funding required for such investigations and inquiries is needed along with a reassessment of the offences, powers, procedures and sanctions contained in the Gambling Act to ensure that the unique challenges faced by sport are specifically legislated for given its unique exposure and vulnerability in this area.

Q4. The impact of the proliferation of off-shore gambling

17. The proliferation of overseas gambling is an issue of real concern if betting in the UK cannot be properly managed by the authorities. The location of the bookmakers should not be relevant when considering a bookmaker’s ability to operate in the UK. The UK must introduce licensing requirements for overseas bookmakers, preventing advertising, online gambling and betting for those which do not have a licence. The licence must include the requirement to adhere to Licence Condition 15.1 in order to protect sport. The Government has failed to respond to its own consultation on overseas operators a year after it was initiated. Until the Government acts, sports events in the UK are at much greater risk from match fixing.

18. We urge the Committee to ask the relevant Minister what has happened to delay progress on this important policy area for more than a year.

Conclusions

19. Corrupt betting is, currently, seen as the biggest threat to sport (IOC, UEFA). Yet despite this, insufficient measures have been taken to protect sport in the UK even though the biggest sporting show on earth is due to reach London in 2012.

20. The Government must act now to ensure that sport is protected ahead of the Olympics next year. All bookmakers taking bets on UK events should be registered in the UK and adhere to Licence Condition 15.1 ensuring their information is shared with sports. Memoranda of understanding are not sufficient. The UK should recognise sports’ intellectual property rights and ensure that bookmakers have contracts with any sports on whose events they wish to offer bets. That way inappropriate types of bets can be prevented by sport. Recent reviews of betting legislation in France have shown that this is acceptable under EU law.

Recommendations

21. We ask the Select Committee to request that Government

· Ensures that overseas operators require a UK licence and that they adhere to Licence Condition 15.1

· Ensures that sport has a say in which type of bets bookmakers can offer (as applies, for example, in Australia)

· Recognises sports’ property rights (as in the latest French legislation)

· Creates a match-fixing/ sports fraud definition (as defined in Poland’s 2010 Sports Act)

· Funds integrity programmes for sport (as is the case with UKAD)

Next steps from sport

22. It is clear that legislative action alone will not offer a complete solution. Sport, too, must step up to the plate to ensure that their structures are fit for a future in which an increasing number of sports (including all Olympic sports) will be bet on. While we ask the Government to act on the legislative side, the Sports Betting Group will continue to engage with national governing bodies of sport and player associations in the following ways:

· Encourage national governing bodies to have match-fixing/ betting rules and regulations (as large organisations such as the ECB and smaller ones such as England Netball already have)

· Recommend that all participants at international events sign up to their national governing body’s code of practice on betting (as British Ski and Snowboarding do, for example)

· Encourage NGBs to assess the risk of irregular betting and ensure that they have considered the need for dedicated education programmes (as provided by Professional Players’ Federation) and dedicated betting intelligence units (as the British Horseracing Authority and the International Cricket Council have).

· Actively pursue the idea of a voluntary code of conduct for national governing bodies in relation to betting integrity

23. The Sport and Recreation Alliance welcomes the opportunity to respond to this inquiry and would be happy to follow up or give oral evidence on any of the issues outlined in this paper.

July 2011


[1] Salford University (2008) Risks to the integrity of sport from betting corruption

[2] Sport Act (2010) Poland

[3] Department of Culture, Media and Sport (2010) Funding Agreement between the Department for Culture, Media and Sport and UK Anti-Doping for 1 April 2010 – 31 March 2011

[4] RGA (2009) Annual Benefit to EU Sport from Betting Tops €3 billion

[5] Hargreaves, I. (2011) Digital Opportunity. A review of Intellectual Property and Growth. Intellectual Property Office

Prepared 29th July 2011