Match-fixing under competitive odds

Abstract

Two bookmakers compete in Bertrand fashion while setting odds on the outcomes of a sporting contest where an influential punter (or betting syndicate) may bribe some player(s) to fix the contest. Zero profit and bribe prevention may not always hold together. When the influential punter is quite powerful, the bookies may coordinate on prices and earn positive profits for fear of letting the 'lemons' (i.e., the influential punter) in. On the other hand, sometimes the bookies make zero profits but also admit match-fixing.

Corrupt Bookmaking in a Fixed Odds Illegal Betting Market*

“…However, insider betting has more to do with using privileged information rather than exerting influence to alter the outcome of a contest, which match‐fixing is all about. Extending Shin's framework, Bag and Saha (, ) modelled match‐fixing under competition and monopoly, respectively. In both papers, the bookmakers are honest and their pricing strategy recognises the threat of match‐fixing coming from an anonymous punter .…”

“…Previously, Shin (, ) and Bag and Saha (, ) used mainly naive bettors, whose beliefs were uncorrelated with Nature's draw but the bookie was honest. Bag and Saha () also studied strategic bettors who recognise the possibility that the bookmaker could be indirectly complicit in match‐fixing.…”

An Economist’s Perspective on Match-fixing and Self-sabotage in Contests

“…If efforts are undertaken to fix a match, then the efforts can be undone by creating opposite incentives by designing appropriate betting odds, betting rules and anti-corruption laws. Bag and Saha (2011) were the first to offer a formal model of match-fixing within the framework of Shin (1991Shin ( , 1992. The framework specifically mimics the setting of a fixed odds betting market (prevalent in the UK and its former colonies in Asia and Africa).…”

“…The special punter can probabilistically contact a team and bribe it to under-perform to some extent (but not necessarily lose with certainty) and then bet according to market incentives, which are controlled by the bookmakers. Bag and Saha (2011) show two interesting results in the context of a competitive market: (a) Competition does not rule out match-fixing. (b) There are contests where bookmakers' competition rules out match-fixing but yields positive profit for the betting houses, which in turn reduce consumers' (i.e., bettors') surplus as well as their market participation.…”

Good Girl, Bad Boy? Evidence Consistent with Collusion in Professional Tennis

“…We thank an anonymous referee for pointing this out. 3 For other recent studies related to match fixing in tennis, we refer to Caruso (2009) and Bag and Saha (2011) for theoretical approaches. Empirical studies are presented by Andreoli-Bersbach (2012), Brown and Minor (2014), and Rodenberg and Feustel (2014), for example.…”