Tom Serby, a Senior Law Lecturer at Anglia Law School, Anglia Ruskin University, discusses the escalating problem of betting-related match-fixing in sports. He highlights the Council of Europe’s recent Convention aimed at tackling this issue, while also pointing out Malta’s legal challenge against it at the Court of Justice of the European Union (CJEU). Malta argues that the treaty clashes with internal market rules, particularly the freedom to provide services, underscoring the difficulties in achieving a unified international response to match-fixing.
Despite initial support for the Convention from 15 countries, including Russia, Germany, and six other EU members, Malta stands alone in its opposition. Although organizations like UEFA and the IOC support the Convention, European bookmaker associations have expressed reservations, echoing some of Malta’s concerns.
Match-fixing, particularly the manipulation of specific events within matches (“spot-fixing”), has garnered significant attention from sports governing bodies, national governments, and the European Commission. This heightened awareness stems from scandals over the past decade, particularly impacting football and cricket. The surge in both legal and illegal online gambling has been a significant factor in this rise, as athletes are bribed to underperform, influencing betting outcomes.
Investigations by INTERPOL have revealed that international criminal networks, particularly from Asia where betting is often illegal, are often behind match-fixing operations. They use these schemes for money laundering purposes. A prime example is the infamous “Calcioscommesse” football scandal, which involved financing from Singapore, manipulation in Italy, bets placed throughout Asia, and money laundering through Panama.
The nature of match-fixing, involving cross-border jurisdictions and primarily online activities, makes it challenging to detect and prevent. Sports governing bodies acknowledge that while they are strengthening their Codes of Ethics, Disciplinary procedures, and establishing Integrity Units to investigate suspicious activities, they require governmental support to effectively combat this issue.
The EU, under the Lisbon Treaty and TFEU Article 165, plays a role in promoting sport, albeit short of harmonizing laws. The CJEU, under the “specificity of sport” doctrine, intervenes in the internal rules of sports federations only when there’s an economic impact. This principle was evident in the landmark “Bosman” ruling, where the Court deemed UEFA’s transfer rules restricting player signings based on nationality unlawful under the freedom of movement provisions within the internal market.
Malta’s complaint against the Convention falls under Article 218 TFEU, a special jurisdiction enabling the CJEU to assess the compatibility of a proposed treaty, not yet in force for the EU, with EU law. The Convention aims to establish international collaboration on defining the illegal manipulation of sports competitions (corrupt betting-related fixing), along with its investigation and prevention.
A critical provision within the Convention is Article 3 (5)(a), which defines “illegal sports betting” as “all sports betting activity whose type or operator is not allowed under the applicable law of the jurisdiction where the consumer is located.” Article 11 of the Convention advocates for website blocking and advertising bans to curb illegal betting. Consequently, a betting operator licensed in Malta, for instance, could be barred from operating in another EU state like Poland if Polish law prohibits certain betting practices that are legal in Malta, thus creating a barrier within the internal market.
Gambling in Poland is legal and generates substantial public revenue through relatively high taxes. However, online gambling remains illegal, a unique stance within the EU. In practice, though, blocking foreign websites is not effectively enforced, allowing many Poles to circumvent this restriction.
Conversely, Malta considers betting operators valuable economic assets and imposes minimal regulation and taxes on them to stimulate this sector, crucial for the smallest EU member state. Malta argues, with reason, that the Convention oversteps the EU’s jurisdiction by introducing gambling regulations, a matter not uniformly settled within the EU. Additionally, Malta contends that overly restrictive measures pushing gamblers towards unregulated markets are counterproductive, given that unregulated gambling is widely recognized as a primary driver of match-fixing.
Malta’s case asserts that the definition of “illegal betting” is discriminatory under TFEU Article 18 and unlawful under Article 49 (freedom of establishment) and Article 56 (freedom to provide services). They are expected to argue that while they acknowledge the regulation of illegal gambling as a legitimate public policy objective to eradicate match-fixing, targeting gambling activities licensed in one EU state but not another is a disproportionate means to achieve this aim, particularly given the evidence pointing to unlicensed gambling as the primary source of the problem.
The CJEU’s extensive and intricate case law on this matter, most recently reaffirmed in “Pfleger,” underscores that Member States possess significant discretion in regulating gambling. However, this discretion is not absolute, and there are instances where gambling regulation can constitute a disproportionate restriction on internal market rights.
This litigation could result in two outcomes. If the CJEU determines the Convention’s relevant rules contradict EU internal market law, neither the EU nor its Member States can ratify it. Conversely, if the Court rules that there is no violation of internal market law, it will likely provide specific guidance on interpreting the Convention’s provisions to ensure alignment with EU law. In this scenario, the CJEU’s opinion will naturally influence how Member States implement the Convention.
As the first international treaty to harmonize the fight against betting-related sports corruption across different countries, the Court’s decision is highly anticipated. Stay tuned.
Barnard & Peers: chapter 14, chapter 16, chapter 24