Will Harris, Commercial Manager of Metric Gaming, discusses how regulation, data and top talent can ensure integrity for bookmakers and the wider sports industry
The road to legal sports betting in the USA has been long and bumpy, and throughout the journey one burning issue has monopolised the conversation – integrity.
Since the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) in May, we have seen a push by the major US sports leagues for states to propose an integrity fee on the handle of sports wagering. These demands only create additional hurdles for states to clear as they move forwards with enacting legislation and rolling out regulatory frameworks.
The reality is corruption in US sports, racing and golf is likely to already exist. The key here is that the introduction of legal gambling doesn’t provide a new vehicle to exploit opportunities for corruption – they already exist in offshore and illegal onshore credit bookies.
By legalizing gambling there is less masking of corruption by the rest of the illegal recreational business as this will organically transfer to legal operators first. These legal operators will be set up to spot this activity.
The illegal offshore operators and credit bookies are fragmented, unregulated and risk management is ineffective or non-existent; this combination means the potential for detection of corruption is low. For these entities, it’s a capability problem – they don’t have the appropriate tools and can’t attract the top talent.
To contrast, any major operator has both the incentive – it costs them money – and the means to source the talent and the tools to spot corruption
To combat corruption, operators need effective risk and customer management strategies and capabilities that are efficient at identifying behaviors outside of the norm – this is not easy to do properly and the more data an operator can collect and analyze, the quicker the operator will be able to spot trends that allow for efficacious identification of potential corruption.
Technological solutions to track market prices and other data points in support of fraud detection are already mature in European markets and will certainly be leveraged in the US. Bookmakers use these tools and techniques to identify betting patterns that are irregular and require some further investigation.
That said, many big operators in Europe have a track record of not knowing their customers well enough; this only exacerbates immature and ineffective corruption detection processes employed by many European operators. In view of that, imagine how poorly it’s done now, if at all, by the illegal offshore and onshore operations.
It may be simplistic to say, but ultimately legalization increases detection standards. Regulation will lead to consolidation in US betting markets with a large number of operators capable of detecting irregular betting patterns.
Despite sports betting having been legal for just a handful of months, US operators and sports leagues are already buying proven technology and attracting the sort of expertise that is experienced in dealing with anti-corruption and anti-fraud matters.
A working example is the PGA Tour who recently employed a data company to monitor global betting activity; a clear indicator of the sports body taking a proactive step to address concerns surrounding corruption. The PGA Tour was also among the first to step forward in support of legalized gambling in the US.
Metric Gaming are once again ahead of the curve on this aspect. Our 21st century technology isn’t encumbered by legacy issues and decisions; it’s a modern platform built to handle the challenges facing a modern sportsbook.
Knowing your customer is the single most important activity any sportsbook will undertake and Metric’s next generation risk management tooling and experienced trading team are capable of identifying unusual betting patterns quickly and effectively to protect both the integrity of betting markets as well as vulnerable gamblers.
There is a huge appetite for sports betting in the US, and bettors have been betting on matches, games and tournaments for decades. Corruption may already exist, but the quicker the individual states’ markets open and mature, with a responsible and pragmatic level of regulation – the greater the integrity of US sports betting.
