Corrupt Bookmaking in a Fixed Odds Illegal Betting Market

Bag, P.K.; Saha, B.

Abstract

Illegal betting in a two-team sports contest is studied with player sabotage instigated by a monopolist bookmaker. Whereas punters hold beliefs about the teams’ winning chances correlated with Nature's draw, the bookmaker's information is noise-free. Enforcement investigates with a higher probability, the greater the upset. In such an environment, if punters do not suspect match-fixing, the favourite is bribed, thus creating upsets and intensifying subsequent investigations. Match-fixing continues to hold even when punters are rational, provided that the bookie's beliefs are noisy: the bookie bribes the team he thinks is the favourite and the bettors bet on their perceived favourites.

Citation

Bag, P., & Saha, B. (2017). Corrupt Bookmaking in a Fixed Odds Illegal Betting Market. The Economic Journal, 127(601), 624-652. https://doi.org/10.1111/ecoj.12483

• Journal Article Type: Article
• Acceptance Date: Nov 29, 2016
• Online Publication Date: May 24, 2017
• Publication Date: May 31, 2017
• Deposit Date: Dec 19, 2016
• Publicly Available Date: May 24, 2019
• Journal: The Economic Journal
• Print ISSN: 0013-0133
• Electronic ISSN: 1468-0297
• Publisher: Oxford University Press
• Peer Reviewed: Peer Reviewed
• Volume: 127
• Issue: 601
• Pages: 624-652
• DOI: https://doi.org/10.1111/ecoj.12483
• Public URL: https://durham-repository.worktribe.com/output/1389552