Silvia Paleari, Director of Public Affairs at the International Betting Integrity Association (IBIA), in an interview with SBC, provided an in-depth look at the evolving dynamics impacting sports betting regulation in South American markets.
As the governments of Brazil, Peru and Chile seek to regulate online gambling, IBIA plays a critical role in advocating for well-regulated and safe sports betting markets. It ensures the protection of all stakeholders, consumers and promotes the integrity of sporting competitions.
SBC: Can we begin with the IBIA’s view on the regulatory developments of sports betting across South American countries?
Silvia Paleari: South America has become a much more important region for IBIA this year. This is because we are seeing Brazil, Peru, Chile, to name a few, moving forward with the regulation of online gambling.
IBIA advocates for well-regulated and healthy sports betting markets as these provide much greater protection to our members, their customers and the integrity of sporting competition. So the fact that these countries want to open-up and regulate their markets could be very positive.
However, In South America, our biggest concern is that the final regulations may not meet the necessary standards, and could end up having a negative impact on sports integrity.
Brazil, for example, which is the largest market in South America, has after many years of delays finally moved ahead with the implementation of its betting regulation: the so-called Draft Law.
Although the discussions which preceded its publication seemed promising, the document currently under discussion in the Senate presents a number of challenges. The proposed tax burden is, for instance, very high, as well as the cost of a license.
However, at the time of writing, the situation in Brazil is mixed. On the one hand, developments in the Senate Economic Committee are more encouraging with indications that the tax burden should be reduced for sports betting operators. Whereas a recent amendment to the Draft Law, introduced by the Senate Sport Committee, is calling for betting on corners and cards in football to be banned. This would be detrimental to the future betting market and consumers, and would undermine the fight against match-fixing.
With the ban on sports betting advertising, Chile is another country where betting operators are concerned that well intentioned, but misinformed, regulation will negatively impact the fight against match-fixing.
SBC: What are the binding factors and narratives impacting integrity in South American jurisdictions?
SP: There are two main issues with the majority of South American countries: either there is no sports betting regulation in place; or current, or pending regulation, as in Brazil and Peru, might not be fit for purpose. Both of which undermine the fight against match-fixing and corruption in sport.
These issues are being underpinned by a narrative which fails to recognize that regulated sports betting operators have a strong commercial interest in monitoring, reporting and deterring match-fixing. Indeed, a recent study highlighted that the loss of regulated operators due to match manipulation amounts to 25$million per year. Our members are on the front line in the fight against match-fixing.
Additionally, policymakers need to understand that, as IBIA’s 2021 optimum betting market study confirms, balanced and efficient sports betting regulation is part of the solution to sports betting related match-fixing. Without a proper regulatory framework, there cannot be a clear oversight of the market, and we will see more of the match-fixing instances like we have seen in Brazil or in Bolivia.
These countries are at a cross-roads. Take the right route and they have the potential to become a positive reference point for the region and elsewhere.
Take the wrong route and they will significantly undermine the ability of responsible betting operators to offer an attractive betting product. The consequence of this is that consumers will be pushed towards the unregulated betting markets which is where the vast majority of the problems with match-fixing originate.
SBC: From monitoring, what has the IBIA learned about sports betting infringements within South American markets?
SP: From 2017 to 2022, IBIA detected and reported a total of 105 alerts on suspicious sporting events taking place in Latin America. Of these, 31% of alerts came from events taking place in Brazil, with football, unsurprisingly, accounting for 21 alerts, followed by tennis with 7 alerts. This reflects the global situation; with football and tennis remaining the sports with the majority of alerts.
During 2023, IBIA reported a total of 10 alerts in Brazil, all on football. This increase is probably due to the fact that we had new members joining the association that operated specifically in the region, such as Galera.bet and KTO. This increased the reach of our monitoring and alert network and our ability to identify potential match-fixing incidents.
It is important to state, however, that whilst the problem of match-fixing is significant in Latin America, the scale of the problem should be put into context, and our ability to successfully clamp down on it should not be underestimated.
For example, IBIA’s Optimum Betting Market Study found that out of the 650.000 sporting events offered by our members globally per year, the vast majority (99,96%) were not considered suspicious. And since the start of 2021, the information and support provided by IBIA and our members has resulted in the sanctioning of 39 clubs, players or officials.
SBC: As a stakeholder, are you concerned about the lack of integrity and sports corruption detailed in the Brazilian government’s draft bill to launch a federal online gambling marketplace?
SP: The new Draft Law regulating betting includes integrity provisions. In particular, there is a specific section dealing with integrity in sports and which requires that sports betting operators are part of an international monitoring body.
We welcome this provision, as it will ensure that there are proper mechanisms put in place to help protect operators, their customers, as well as sports, from potential fraud and manipulation. These mechanisms include IBIA’s world leading monitoring and alert network which harnesses the collective resources and expertise of the world’s largest regulated sports betting operators.
According to H2 Gambling Capital – the leading independent authority on global gambling market data – IBIA members are estimated to already account for over 60% of the remote gambling market in Brazil. That leading market position will enable IBIA to provide a highly accurate analysis and effective deterrent against match-fixing related betting fraud in Brazil, and we are committed to working closely with the Brazilian regulator sports federations to further exchange information on suspicious activities.
SBC: Can regulators and sports bodies ensure effective monitoring of sports betting across all levels of professional sports in South America?
SP: Both regulators and sports bodies have a very important role to play in the fight against sports corruption, however it is the regulated sports betting operators that are best placed to monitor and report on suspicious activity within their betting markets.
IBIA’s monitoring and reporting system is the world’s largest and most effective integrity network. It is unique in terms of its scale (it covers over US$137bn in sports betting turnover annually) and the depth and accuracy of data it generates allows us to track and analyse transactional activity linked to individual consumer accounts rather than just simple odds movements.
Shared with sports federations and law enforcement, this data is crucial in helping them to identify, investigate and prosecute corruption cases.
It also confirms how important collaboration is, between betting operators, law enforcement, policymakers and regulators, in the fight against corruption in sport.
SBC: Does market regulation point to greater responsibility for operators? How should licensed incumbents respond to integrity fallouts in South America in order to restore or improve market confidence?
SP: Regulated sports betting operators already take their responsibility for clamping down on match-fixing very seriously, whether this is through investing in sophisticated and costly risk management systems, or supporting player educations programmes. They do so because their businesses are dependent upon keeping their customers, and the sports they bet on free from match-fixing.
So the best way to build confidence in the regulated sports markets in South America is to create a policy and regulatory framework that supports, rather than frustrates, the fight against match-fixing.
It is also about finding ways for all relevant stakeholders to collaborate more effectively in the fight against match-fixing, and to pro-actively educate players and officials about the risks and consequences of match-fixing.
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