In a new series for SBC, gambling compliance and integrity expert Bill South reflects on the current operating challenges facing industry leadership… in which a deeper focus is required to understand the threats and complexities surrounding betting integrity, a factor that has not been addressed by the Gambling Review.
What is the cost of integrity to the sports betting industry? Clear financial metrics aren’t straightforward, yet at a time when government scrutiny of the UK industry remains high, its importance cannot be overstated. Whether it be in politics, sports or gambling, where there is an imperative for a moral code of values, we should be aware of the cost of losing it.
A lack of integrity leads to a lack of trust and breeds antipathy. In the world of sports betting integrity, such an outcome would be devastating for all those involved. That unspoken pact of trust consigned to those in positions of leadership remains, for the most part, unnegotiable.
Being able to demonstrate high standards of sports betting integrity remains a defining factor in the creation of sustainable and workable relationships, whether the end goal is commercial, sports-related, political or even personal.
As the conclusion of the Gambling Review looms, industry leadership has been warned to prepare for critical reforms related to player protection, customer spend, operator conduct, and affordability – tougher disciplines overseen by enhanced due diligence and further KYC controls… Yet what other current dilemmas face the custodians of sports betting integrity?
Topping the list for many senior compliance officers is the probity and provenance of data supply chains. The pandemic resulted in a major loss of live sport and content, requiring gaming operators to seek new offerings. The ingenious and the entrepreneurial tend to prosper in such situations, and new formats and competitions emerged, a number of which traded successfully and continue to do so. Yet behind this free-market creativity lurks, as always, the criminal opportunist. Manipulation of data supply chains presents a significant threat to all sports betting integrity stakeholders.
A recent Asian Racing Federation publication, State of Illegal Betting Report, highlights the provision of sports data feeds to “Regulated/Under-regulated/Unregulated betting operators alike” as a risk, the suggestion being that the sports data market’s rapid evolution has occurred, largely, in a regulatory vacuum.
This risk is compounded if event data are sold to poorly regulated or unregulated operators who show little interest in monitoring or alert mechanisms, or in alerting relevant jurisdictions to suspicious or irregular betting movements.
The Erasmus+ report, Combating Match Fixing in Club Football Non-Competitive Matches, contains some interesting observations.
“It’s an arms race between sports books. If one company puts a match up then two or three follow, then the odds company websites and no one knows where these fixtures come from.”
“Data providers also have a responsibility. They are part of the solution, but also part of the problem.”
Accepting that diligent operators are alive to the risks and engage with content suppliers in a responsible manner, the old adage that “cash is king” has, in some quarters, been replaced by “content is king” in this dynamic and no-quarter-given sector. In some jurisdictions a Wild West of new markets might not be too far away.
With international operating scale seen by many analysts and investors as a continuing trend within the sector, the chase for acquisition in emerging or developed markets remains the major game in town. This requires Boards and CEOs to be match-fit at all times. When investors look under the corporate bonnet, they want to see clean engines and no nasty brand- or value-damaging mechanics. Fines and regulatory sanctions – whatever side of the debate you are on – suggest a failure of process at best and an eye-off-the-ball culture in the worst of cases.
The goal of operating any function with integrity remains an unceasing pursuit. It does not sit alongside competitive advantage and strong financial performance, it sits above them. It is the bedrock of best-in-class governance, evidence of real and tangible risk-based lines of defence. The need to focus on effective, sustainable compliance and integrity measures should always be point number one on the agenda. Thoughtful, inward-looking and challenging executive conversations should dismiss corner-cutting and call out the passive. Individual leaders can become the focus of the wrong kind of attention without this sense of collective energy and accountability.
To support that endeavour, independent audit and validation of an organisation’s way of doing things should be encouraged to protect those organisations and enable transparency.
Whilst data content integrity is highlighted as a current concern, that spotlight should also turn on a range of issues: source of funds due diligence; cyber-attack preparedness; real understanding of customer protection; clear organisational spans of control and accountability; robust training programmes; and collegiate industry working. Evidence of top teams being seen regularly on the ‘shop floor’ (physical or virtual) is also key – asking questions, checking for understanding, supporting the right culture and never accepting the status quo.
Tom Cruise, talked recently about an incident while filming low-level-flying in Top Gun: Maverick. The iconic Maverick (Cruise) is at the controls of an experimental hypersonic plane which flies fast and low over Rear Admiral Chester Cain (Ed Harris) who is standing next to a guard station, which loses its roof in the process. The ‘stunt’ could have gone wrong because the guard station hadn’t been effectively secured in preparation for the pressure wave created by the plane.
Maverick’s takeaway: everyone needs to pay attention. Failing to pay attention to sports betting integrity for the long term means just that… failure.
That could be in regulation, operator vigilance or effective consumer protection. Wherever it comes, it means individual and corporate reputational damage, the threat of restrictions on markets and ever more data requests by regulatory authorities. All would increase costs and the regulatory burden.
Paying attention, therefore, literally pays dividends.