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Serie B (and Maybe A) Match Fixing Scandal

Nick Watanabe over at the International Journal of Sport Finance Blog alerts us to a match fixing scandal in the Italian soccer league, Serie B, which may involve fixing of matches in the top league, Serie A.

Former Atalanta captain Cristiano Doni and 16 other people have been arrested across Italy in an ongoing investigation into soccer match-fixing and illegal betting.

The inquiry is focused on several matches in Serie B over the past two seasons, with Atalanta involved in three matches. Three Serie A matches from last season are also under investigation: Brescia vs. Bari, Brescia vs. Lecce and Napoli vs. Sampdoria.

"This is not the end, but just a starting point," Cremona prosecutor Roberto Di Martino said Monday. "Let's hope it's a starting point in cleaning up the beautiful game that is football. One of the suspects has admitted that these operations have been going on for over 10 years.

It's not uncommon to hear about game-fixing and point-shaving scandals in American college sports, but in recent history, there have been no scandals involving fixing or shaving by professional players.   For example, here is one list of gambling scandals involving US sports.  Only one of the scandals happened in recent years, the NBA game-fixing scandal from 2007.  But this scandal did not involve fixing by players.  It involved game fixing by NBA referee Ted Donaghy, a scandal that was an isolated incident.   The remaining 4 include 3 college scandals and the infamous 1919 Black Sox scandal in which members of the Chicago White Sox intentionally lost the World Series that year.

Here is another take, a top 10 list, at ESPN's Page 2.  This list is a more general list that includes not only fixing and gaming scandals, but also scandals where players or coaches were simply gambling.  For example, the list includes the Pete Rose scandal where Rose gambled on baseball games, including the Reds for whom he played and managed.  But to my knowledge, there is no evidence that Rose actually fixed a game or shaved runs.

The decision to fix/shave depends on the benefit the person will get and the cost.  The cost is a function of the probability that the person will be caught and the penalties if caught.  Ignoring such costs as lawyer fees, time spent in jail, and the penalties someone will "pay" for violating cultural norms and losing his reputation, if a person is caught fixing or shaving in sports, that person loses his job, for life.   Gambling in sports works to destroy the very integrity of the game, and thus fan willingness to pay.  So sports leagues do not mess around when gambling rears its head.  They act quickly and decisively.  So why in professional sports do we see no instances of point shaving or match-fixing by players in the modern day here in the States?

To that we can look to our friend, free agency.  Before the era of free agency, the four major professional sports leagues each had some version of the reserve clause which effectively eliminated competition between teams for players.  Without this competition, players would be compensated at a level below their marginal contribution to their teams.  With free agency, player compensation, on average, will be higher and closer to player marginal contribution.  So giving players the right to free agency, all else equal, should result in there being fewer incidences of fixing and shaving.  History suggests that this is, indeed, the case.

This is also why fixing and shaving have essentially been relegated to the supposedly amateur ranks.  These players are not compensated monetarily so, all else equal, they have less to lose than if they earned some sort of financial compensation.  Thankfully, though, fixing and shaving don't happen very often even if they happen at a greater rate than in the pros.

So the question is, what is going on in Italian soccer?  Are these just isolated incidents involving just a few players?  The article says that this may have been going on for 10 years, so is there something more going on?  The article notes that one suspect says this has been going on for ten years.  Why would people risk their careers and their personal reputations by fixing matches in Italian soccer.?