Seminar by Dr. Bibhas Saha

23 Jul 2014

Title: Match-fixing and betting markets
Speaker: Dr. Bibhas Saha (University of East Anglia and Durham University)
(co-author Dr. Parimal Bag, NUS)

Venue: Department of Economics, University of Calcutta, Room 32

Date and time: 23 July, 2014, Wednesday 3-4 p.m.

Under the threat of match-fixing and informed betting by an anonymous wealthy corrupt punter (or betting syndicate) on a sporting contest between two teams or players, a monopolist bookmaker can set odds to encourage or discourage fixing. The bookmaker's role in match-fixing is of main concern.
It is shown that sometimes the bookmaker can be a facilitator of match-fixing. Rather than setting odds that can easily eliminate the corrupt punter's involvement in betting, the bookie tempts him to seek out match-fixing opportunity and bet profitably. His loss to the corrupt punter is more than made up for by enticing a sufficient number of naive punters to bet on the losing team. Such incentives to encourage match-fixing are seen to persist around contests where teams are evenly matched. But there are also occasions when the bookie tolerates match-fixing as otherwise he stands to lose significant business in trying to prevent it. When this happens match-fixing causes big upsets with the strong team losing.
The analysis also reveals a surprising result that the incidence of match-fixing can dramatically fall when corruption opportunities rise. This is shown by comparing two scenarios -- when only one team is corruptible and when both are corruptible. For both teams corruptible, the bookmaker is uncertain about to which team the corrupt punter will have access, so carefully maneuvering the odds to instigate match-fixing is too costly.
An important question to emerge from the analysis is, who should the enforcement authorities go after -- the bookmaker who creates the incentives to fix, or the corrupt punter who secretly does his bidding by corrupting players and match officials?