The use of Artificial Intelligence in tackling Fraud, Corruption, and Money Laundering in Online Gambling in the Sports Industry

By 8th November 2019 General News

Fraud, corruption, and money laundering in the sport industry has given rise to a need to ensure greater awareness of these risks at all levels, including athletes, coaches, federations, sponsors, and betting offices, and to enhance identification and tackling of these issues.

Media reports have predominantly focused on sports match-fixing in football, with match-fixing often the most common form of sports corruption, going beyond simply influencing the result of a match[1] but now encapsulating even the number of throw-ins and the exact timing of penalties, all of which could be subjected to manipulation, in what are known as spot fixes.[2]  Spot fixing involves fixing small aspects of the game including anything from the time of the first throw-in at a football match to when a no-ball is bowled in cricket.[3]

The complicated and multidimensional nature of sports corruption has therefore created significant challenges for sport management and policymakers in developing measures to safeguard the integrity of sport.[4]  One specific area to focus on in order to tackle the problem is that of online betting.

Corruption in online gambling

Online gambling is a specific area of concern and a profitable platform for organised criminals.  Frequently, unregulated betting operators fail to comply with the minimum Know Your Consumer requirements, Anti Money-Laundering regulations, or with law enforcement agencies, and therefore this is a significant area that needs to come under greater scrutiny.[5]

Whilst greater monitoring is already in place in major sports to scan for suspicious betting patterns, particularly in high risk sports such as football, cricket, and tennis,[6] there is still room for improved sophisticated technology, namely Artificial Intelligence (“AI”), to enter the sports industry to act as a tool for tackling sports manipulation.

How can AI be used to fight corruption, fraud, and money-laundering in the sport sector?

Whilst sports federations and regulators encourage online publication of bets and e-reporting platforms for individual sports, there is limited use of the vast potential of AI in tackling sports corruption, fraud, and money-laundering.

There are a number of types of AI software which are used to facilitate easier and more accurate predictions for betting, such as AI Bet[7] or Unanimous AI.[8]  As there are too many variables that can change a key situation in a game, however, the application of AI to predict outcomes or results is limited.  Nevertheless, there are vast possibilities for applying already existing AI mechanisms to detect fraudulent accounts, money-laundering through online betting, or to identify fraud patterns.

For example, SportRadar – a leading supplier of sports integrity solutions – supports sports governing bodies and agencies in the fight against betting-related match-fixing, doping, and other integrity threats.  It offers anti-match fixing through its Fraud Detection System and Monitoring and Detection services to review the entire global betting market and to detect betting-related fraud in sport.[9]  The Department for Digital, Culture, Media and Sport has also established a Sports Betting Group to address the risks from sports betting corruption.[10]

The legal and FinTech sectors have also started to use AI to detect fraudulent schemes and financial crime, to perform background checks, and to spot payments fraud.[11]  Whilst there are a lot of differences between these sectors and the sports industry, the same or similar AI software can be adapted to detect irregular activities on sports betting websites.

In October 2019, Stats Perform – a revolutionary leader in sports AI and data – and Control Risks – a leading specialist consultancy – joined forces to enable sports stakeholders to manage both sporting integrity and business risks in one place.[12]

Stats Perform collects sports data and passes it through AI to deliver in-depth insights for media and technology, betting, and team performance.[13]  As a result of this partnership, sports industry stakeholders such as rights holders, international federations, and governing bodies are able to use Stats Perform’s Integrity Unit combined with access to Global Risks’ international investigative capabilities, to help drive out corruption and match-fixing.  Integrity units and compliance teams also gain access to a full range of solutions, including forensic accounting, data analytics, and traditional investigative capabilities, to detect illegal activities in sports or conduct investigations.[14]

In working collaboratively, the sports industry is able to improve its integrity, encourage updates to compliance programs, whilst simultaneously protecting the long-term value and prestige of their brands.[15]

Conclusion

In recent years, widespread fraud, money-laundering, and corrupt practices by some players, coaches, and spectators have let honest supporters down, and international sport and the regulators have a long way to go to regain the public’s trust.  One way to do this is by investing time and money in AI software to minimise illegal activity in online betting.

Online gambling platforms provide multiple possibilities for sophisticated illegal activity and therefore, innovative tools, such as AI, need to be implemented to address growing corruption, fraud, and money-laundering in sport.  It is clear that positive steps are being taken to tackle the increased risk, however, regulators need to be vigilant not only to the sophisticated manner in which sports integrity is compromised, but also to the mechanisms available to detect illegal activity.

Smart technology already has vast utilisation in scouting, coaching, and performance improvement.  As AI has evolved and its accuracy and detection capabilities have drastically improved, it is now a good time for greater discussion of the use of technology in the sports industry as a tool for detecting and tackling fraud, corruption, and money-laundering.

[1]  Manoli, Argyro Elisavet and Ecorys, Mapping of corruption in sport in the EU: A report to the European Commission, December 2018, Directorate-General for Education and Culture, Youth and Sport, European Commission (accessed 28 October 2019), https://www.lboro.ac.uk/news-events/news/2019/march/corruption-in-sport-report/
[2] EUROPOL, Sports corruption (accessed 28 October 2019), https://www.europol.europa.eu/crime-areas-and-trends/crime-areas/corruption/sports-corruption
[3] Bungard, Matt, How do match-fixing, sport-fixing and pitchsiding work?, The Sydney Morning Herald, 14 December 2017, (accessed 28 October 2019), https://www.smh.com.au/sport/cricket/how-do-matchfixing-spotfixing-and-pitchsiding-work-20171214-h04lpw.html
[4] Manoli, Argyro Elisavet and Ecorys, Mapping of corruption in sport in the EU: A report to the European Commission, December 2018
[5] Ibid. p. 16
[6] Trust Sport, ‘Match fixing, betting and gambling corruption in sport, December 2018, (accessed 6 November 2019)     https://www.itrustsport.com/sports-governance/tackling-sports-corruption/match-fixing-betting-and-gambling-corruption-in-sport
[7] AI Bet, http://www.aibet.eu
[8] Unanimous AI, https://unanimous.ai/
[9] Sportradar, https://www.sportradar.com/integrity/
[10] Sports Betting Group, http://www.sportsbettinggroup.org/
[11] Bogdanov, Vik, How AI Technologies Help Banks and FinTech Startups, readwire, 20 May  2019 (accessed 8 November 2019) https://readwrite.com/2019/05/20/how-ai-technologies-help-banks-and-fintech-startups/
[12] BusinessWire, Stats Perform and Control Risks Announce Global Sports Integrity Partnership at ABC Minds Sports Anti-Corruption Conference, 7 October 2019 (accessed 28 October 2019),
https://www.businesswire.com/news/home/20191007005277/en/Stats-Perform-Control-Risks-Announce-Global-Sports
[13] Stats Perform, (accessed 28 October 2019), https://www.statsperform.com/
[14] AI Time Journal News Desk, Stats Perform and Control Risks Announce Global Sports Integrity Partnership at ABC Minds Sports Anti-Corruption Conference, 7 October 2019 (accessed 28 October 2019),
https://www.aitimejournal.com/stats-perform-and-control-risks-announce-global-sports-integrity-partnership-at-abc-minds-sports-anti-corruption-conference
[15] Ibid.

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