Having been shunned by swathes of the international sporting community for years, the betting industry could have been forgiven for suspecting an ulterior motive when IOC president Jacques Rogge recently floated a plan to put the previously maligned sector at the heart of a drive to clean up sport.
Warning that sport as a whole was “in danger” from illegal gambling, Rogge announced that the IOC would create a taskforce to co-ordinate the fight against an underground industry that Interpol, the organisation that facilitates international police co-operation, believes is worth $138 billion every year.
Rogge announced the initiative after hosting a summit that was attended by Interpol as well as sports leaders, politicians and betting operators.
However, it would appear that the IOC chief believes the regulated betting industry’s role as an “ally” in the fight to protect the integrity of sport should come at a price.
“We are in favour of a system where betting operators have to be licensed by the government,” said Rogge prior to the summit.
“Sports organisers, national federations and international federations would have a fair return for all their efforts for organising the sport. They should be recognised with a return from financial income.”
Rogge’s call for government legislation to ensure betting operators contribute a proportion of their revenues towards sport is a controversial issue at a time of regulatory upheaval across Europe.
Several countries are in the process of being forced to liberalise their gambling markets by Brussels, which is gradually clamping down on nations that restrict outside companies on the grounds of ‘public interest’ whilst promoting their own state monopoly gambling firms.
A year ago, a law that mirrors Rogge’s suggested model was introduced in France. The legislation meant that online operators were permitted to accept bets on certain listed sporting competitions recognised by Autorité de Régulation des Jeux en Ligne (ARJEL), as long as they had been granted a licence by the regulator.
A condition for licence-holders was that they had to agree to contribute a proportion of their income to governing bodies in certain sports, and ARJEL reported that over the first five months of the “liberalised” French market, €330,000 had been ploughed back into sporting organisations.
The new laws, which ended the Francaise des Jeux and Pari Mutuel Urbain monopoly positions on French gambling, did not, however, open up the whole market with betting exchanges such as Betfair barred from entering.
Mark Davies, who was one of the founding members of Betfair, is now chairman of Integrity in Sport, an advisory firm that works with governing bodies to identify ways of reducing the risk of corruption. He believes the partial liberalisation of the French market should not be held up as an example for the rest of the world.
“I can’t see how it [the French legislation] can be judged a success,” says Davies. “Surely the objective of a government is to get as much betting as possible under its control in its own jurisdiction. It is significant that Ladbrokes and Betfair, the biggest offline and online players, are not in France.
“The moment you impose costs on a visible market, you drive a portion of the business into the illegal market.
“I think they are missing out on money in France by resisting a full market liberalisation, and it is widely accepted that the world’s illegal market remains larger than the legal one.”
For the full feature, please see the latest issue of SportBusiness International out April 1.
