Tuesday 14 June 2016

Match-fixing is immoral, illegal and costly

People like watching football (Euro2016 is taking place currently) and some firms run football gambling business, which is legal in some countries. Match fixing is considered as a strategy to gain huge profits. Is this statement true? In some situation, it could be true. When there is only one dominated party in the game, it can use its dominated power to fix the match and defeat all other parties in the game. However, next time, there will be fewer parties participating in the game, the profits earned by match-fixing is diminishing. In addition, match-fixing in many situations is costly. If there is no dominated party in the game, then all parties can bid up the cost of fixing the game in order to earn the profit. When there are many parties participating, the profit will decrease to zero. Moreover, even when they are trying to fix the game, the result might not be certain that there is still some small probability that the result may be different from you expect. With good skills of actuary, firms could come out with similar risk but lower costs. Therefore, in a mature market, firms have no incentives to fix matches as such strategy is too costly and risky (legal risk).

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