So match fixing is a conspiracy to determine the outcome of a game in advance by means which violate the rules of the game. There are two ways of thinking about match fixing. One is fixing a game because of the desire to win, even if you do not have the sporting merit to enable you to win. And the other way is to think of fixing in order to profit from a gamble. And that typically means fixing for somebody to lose the game rather than to win it. So we're going to look at some examples here of match fixing in this session, will discuss the logic and the ways in which this interacts with gambling regulation. As we mentioned in the previous session's, match fixing is often associated with illegal gambling, and legalization of sports gambling can actually be a means to controlling the problem. So there's a very long history of match fixing scandals in sports. Some of the most famous examples are the Black Sox scandal, which we mentioned in an earlier session in 1919, where players took bribe to throw the World Series. In the US a very famous fixing scandal was the City College of New York, CCNY scandal in 1951 where basketball players, college basketball players who were unpaid took bribes to win by narrower margins than was expected. So what's called point shaving. There have been many, many examples in the world of soccer, but one of the more famous ones in Italy was called Calciopoli, where several of the leading Italian clubs and in particular Juventus, were found to have engaged in systematic match fixing. And then cricket has been particularly prone to match fixing scandals. And following the King Commission study in 2000, it was revealed that really a very significant number of captains of international cricket teams were engaged in match fixing, particularly in India and South Africa. So it's useful to draw the distinction between fixing to win and fixing to lose we're fixing to lose usually is associated with some form of gambling. So fixing to win is when you want to win, but you don't think you can do it on your own. And so you try to bribe the opposition to not try so hard so that you can win the game. And that was the kind of thing involved in the Calciopoli scandal. And there are many other examples of this. And of course, this in itself has nothing to do with gambling. Fixing to lose arises with gambling and in gambling the best way to fix the game for gambling purposes is for the stronger team to do worse than everybody expects, preferably to lose and for the underdog to win. And it's worthwhile thinking about this a little bit more because it often helps to explain whether such match fixing is likely or unlikely. So if you think about how a gambling fix would work, the first thing is, gambling is based on probabilities, so you win more money when improbable things happen. That's more profitable. You don't win a lot of money when likely things happen. So the improbable thing to happen in sports gambling is for the underdog to win. And the more unlikely it is that the underdog wins, the bigger the profit if the underdog does win. So the ideal fix for a gambler then is to have a very significant underdog win the game unexpectedly and that can only really be achieved if either the good players on the strong team, they underperform or the referee and gets involved in affecting the decision. Notice that the low ability players don't have much of a role to play here. The only thing a low ability player could do that would be unexpected is to play well, and it's hardly the case that you can bribe people to play better. After all, you don't need to bribe them, they want to play better anyway. So here's the problem though, for fixed to work, the problem for the would be fixer any way, for the fixed to work, the fix has to be undetectable. But when very unlikely events happen, that looks very, very surprising indeed. And if you get caught fixing a game, typically you're going to face pretty severe punishment, which could end up going to prison. So all of that makes the calculus of match fixing quite hard to work for the fixer because you have to secretly get the best players to do something which is very, very surprising without anybody noticing. You can see how that's just not so easy. The best way in which a fixer can fix a game is to fix low paid players. Again if you need to fix the best players, they're not likely to be low paid in general. What you're looking for are situations where the rules and regulations limit the pay that can be paid and so, in other words, players are receiving less than their market rate. And that in particular, seems to apply to three of the scandals we referred to above the Black Sox scandal, the CCNY scandal and the King Commissioned Cricket scandals. In all of these cases, the players were not well paid. Back in 1919 baseball players earned relatively low salaries. CCNY college players were paid nothing. And international cricket players 20 years ago were paid salaries that were much, much lower than equivalent international captains in other major sports. And so notice also these are the examples where the fixes were for gambling, not fixes to win. The one case where the players were well paid the Juventus, Calciopoli scandal that was a fixing to win not fixing to lose scandal. In general, well paid players are unlikely to engage in fixes, since again, the well paid player has to balance the probability of getting caught and losing their livelihood and the financial cost of that loss against any potential gain from fixing a game. And usually the profits on fixing anyone game are not large enough to make it worthwhile. Bear in mind that a top player in any sport is going to be paid significant sums of money for playing over and over again, whereas a fix by definition, is going to relate to a single game. And so the calculus again is against the fixer when players are well paid. Now, there is also an important dimension to this in terms of the legal status of gambling in the jurisdiction where the fix is taking place. We've seen already that bookmakers can make guaranteed money just by running a balanced book. Whether the underdog wins or the favorite wins, the legal bookmaker can make the same amount of profit if by setting the odds in the appropriate way. Moreover, legal bookmakers what they really want in order to make money is for lots of people to gamble. The more people gamble, they're making a profit on each gambler who stakes money. And so they'd like lots of people to get involved in gambling. And that's most likely to be the case when people are not suspicious, punters are not suspicious about the possibility of fixing. So, in fact, legal bookmakers have real incentives to help prevent match fixing, and the reality is that they often devote significant resources to detecting match fixing in general. Match fixing destroys their business, and so they try to stop it from happening. On the other hand, illegal bookmakers have no incentive at all to get involved in limiting match fixing because no one's going to thank them for doing so. In fact, if they reveal that they're involved in bookmaking at all, they're going to get closed down. So illegal bookmakers will not do anything and have no reason to do anything about match fixing. So that's how we reached the conclusion that in fact, legalization of gambling is probably the best way to limit the spread of match fixing in sports. So, as the theory would suggest, the evidence supports the view that match fixing today usually occurs where the players are not well paid and where the public has little interest in the outcome of the game. Fixing is often organized by criminal gangs, and particular often associated with India and China precisely because gambling is illegal in those countries. As in many sports like soccer, the big stars have become very, very highly paid. Match fixers often turn to another group of individuals who can affect the outcome of the game, the referees and umpires who are often paid far less and they can be more profitably fixed if match fixing is an issue. So to conclude, there's certainly evidence that match fixing is a problem in sports, but that problem is not entirely about gambling. So some people sometimes mistakenly think match fixing is all about gambling, but it's not. But no doubt there is a dimension to match fixing that is related to gambling. When match fixing related to gambling does occur, it's most likely to be where those who are being fixed are not well paid and have little to lose from participating in the fix. But also where gambling is generally illegal and therefore there are no bookmakers who have the appropriate incentives to limit fixing and identify the cheats. So just to suggest some further reading on this subject, if you're interested, there's the article by Preston and Szymanski in 2003, which reviews in some detail the way in which different forms of cheating occur in contests. And then one of the leading researchers on the actual instances of match fixing, particularly in international soccer, Declan Hill has an article about how match fixing works for gambling purposes in soccer.
