Integrating Gambling in the Governance of Sport Financial Opportunities and Ethical Challenges Jean-Patrick Villeneuve, Ph.D. Madalina Diaconu, Ph.D.

Introduction “... sport is... confronted with new threats and challenges which have emerged in European society, such as commercial pressure, exploitation of young players, doping, racism, violence, corruption and money laundering.” (EU COM (2007) 391) One such challenge: Gambling Large financial stakes Fundamental ethical questions In light of recent regulatory developments, this paper presents 3 possible scenarios for the future of sport gambling and the impact these developments are likely to have on sport governance.

Current Situation - Gambling Sports betting is currently experiencing a series of upheavals on the structural, institutional and legal fronts.  Fragmented framework at the European level  Monopolies and licensed based systems all regulated at the national level.  Numerous tensions  Dematerialisation of gambling  Rise in illegal activities  Modifications in the Regulatory Framework  Current Framework  Parliament’s White Paper  Integrity of Online Gambling report  EU Council Progress Report  The ECJ’s Interpretations

Current Situation - Sport One can identify three different approaches sport organisations use to integrate sport gambling into their organisational strategies:  The General Trend: ‘Surveillance’  Model 1: Internalisation (UEFA)  Model 2: Outsourcing (FIFA, IOC)  The New ‘French Scenario’  Automatic Financing Mechanisms (CONI) There are a number of incidences for sport organisations to take gambling into account: + Financial Benefits, Stifling Irregularities - Ethical issues and Image problems

On-going litigation / Fragmented nationally based regulations  Economic Consequences – Uncertainty is maintained – Long-term financial health could be threatened – Slow downward slope for sport organisations  Institutional/Relational Consequences – Betting organisers will internationalise outside of Europe – Slowly diminishing negotiating position for sport organisations – Difficulty to fight current challenges  Possible Strategies for Sport Organisations – At least assure ‘Surveillance’ – It is not clear if that will be enough  The ‘odds’2 : 1 Scenario 1: The Status Quo

Europe becomes one integrated gambling market  Economic Consequences – Extensive cross-border competition – Could decrease funds going to sport  Institutional/Relational Consequences – Large increase in the size and influence of sport betting organisations – Decreasing autonomy – Lesser ability to deal with deviances  Possible Strategies for Sport Organisations – Adapting to the new environment, or be forced to  The ‘odds’6 : 1 Scenario 2: Full Europeanisation

A European framework that recognizes Member States’ right to regulate gambling according to their traditions and cultures  Economic Consequences – Legal certainty – Long term out-look  Institutional/Relational Consequences – Development of a multi-national rather than a pan-European type of relationship  Possible Strategies for Sport Organisations – Full integration of gambling dynamics  The ‘odds’1.5 : 1 Scenario 3: Subsidiarity

Conclusions  Sport and betting are two distinct yet inevitably linked activities.  Currently both the regulatory framework, and sport organisations approach to gambling are fragmented.  There is a need for an increasing awareness of the dynamics of sport betting on the part of sport organisations.  The three scenarios pointed to the danger of a passive approach to this situation.  A greater level of integration of the dynamics of gambling in the management of sport organisations could become inevitable in the long run… might as well start now!

Late Breaker! Communiqué of June 24: The IOC proposes a series of measures to take into account gambling! These proposals point to the recent nature of the integration of sports betting issues in their strategic reflections. It is a first step in the right direction! … but sport organisations, the IOC and others, cannot stop there!

Jean-Patrick Villeneuve, Ph.D. Professor in gambling regulation and governance Swiss Graduate School of Public Administration Madalina Diaconu, Ph.D. Lecturer in gambling and sports law University of Neuchâtel