LEGISLATOR TAKES MEASURES TO FIGHT SPORTS BETTING FRAUD AND THE MANIPULATION OF PROFESSIONAL COMPETITIONS

The Federal Government has proposed changes to German criminal law to effectively fight Sports Betting Fraud and Manipulation of Professional Competitions. The responsible German Minister of Justice, Heiko Maas, explained: "The current sanctions are insufficient. Fraud and manipulation must be combatted by the means of criminal law".

BACKGROUND OF THE DRAFT LEGISLATION

The introduction of the new draft legislation with changes in German criminal law was deemed necessary as the "general" provision against fraud in German law often is ineffective as it requires to prove that bets were placed regarding manipulated competitions and that a concrete damage to the property of another was caused even though the manipulation of (professional) competitions is similarly detrimental to the integrity of sports and financial interests of third parties. Likewise, the provision on taking and giving bribes in commercial practice is generally inapplicable. Furthermore, under current law it is difficult to bring involved athletes to justice as they could quite often only be punished for aiding – if at all.

The draft legislation is part of a worldwide agenda to protect the integrity of sports and financial interests in light of recent betting and manipulation scandals. The Declaration of Berlin by the UNESCO from May 2013 and the Convention on the Manipulation of Sports Competitions by the Council of Europe from September 2014 called for measures against the tampering with sports events. Already last December new anti-doping legislation entered into force in Germany, making it i.a. illegal to produce, traffic, place into circulation or prescribe doping substances for the use in sport as well as consuming doping substances in order to gain an unfair advantage in organized sports competitions.

SANCTIONS ON SPORTS BETTING FRAUD

Sports betting fraud is intended to be punished with a fine or imprisonment not exceeding three years. It would be punishable if an athlete or coach demanded, allowed himself to be promised or accepted a benefit for himself or any other person as consideration for according an unfair preference to his opponent in a competition. Additionally, the intent of the athlete or coach must be that through the unfair preference a third party might be able to gain an unlawful material benefit through public sports betting. Thus, it would neither be necessary that the competition would actually be influenced nor that a bet be placed causing damage to property.

Furthermore, the definition of "coach" would be very broad. Not only the persons "at the sidelines" would be considered coaches, but also those who are able to influence the athletes due to their professional or economic position like managers of a club or association as well as main sponsors. Likewise, referees and judges could be punished. The persons offering, promising or granting the benefit as consideration for according an unfair preference are subject to the same penalty.

MANIPULATION OF PROFESSIONAL COMPETITIONS

Manipulation of professional competitions will be punished with a fine or imprisonment not exceeding three years. Contrary to Sports Betting Fraud, this sanction would not require that an unlawful material benefit could be gained through public sports betting by a third party. The mere demand for / acceptance of a benefit for himself or another as consideration by athletes and coaches or referees and judges for according an unfair preference to an opponent in a competition (in exchange for consideration) would be sufficient. However, professional competitions would only be those in which the majority of athletes participating gain revenue of a substantial amount and which would be organized by a Federal German or International Sports Association.

SEVERE CASES AND INTERCEPTION OF TELECOMMUNICATIONS

In especially serious cases of sports betting fraud or of the manipulation of professional competitions a punishment from three months to five years could be imposed. A case generally would be deemed especially serious if either the offense related to a major benefit (usually at least 50 000 €) or if the offender acted on a commercial basis or as a member of a gang whose purpose is the continued commission of such offenses.

In order to facilitate law enforcement, the relevant agencies would be allowed to intercept the suspect's telecommunications without his knowledge if he were suspected of having committed an especially serious case of sports betting fraud or the manipulation of professional competitions.

INTERNATIONAL SCOPE OF APPLICATION

The scope of application of Germany’s criminal law would also be enlarged. Whereas German criminal law is generally only applicable to acts committed on the territory of Germany, the draft legislation will apply also to actions committed outside the territory of Germany in case the competition would be taking place on German territory. Similarly, if the offense was committed on German territory but the competition was occurring abroad, the provisions would be applicable. This will have an international impact of the new legislation, too.

ASSESSMENT OF THE DRAFT LEGISLATION

Considering the huge impact and relevance of sports in both society and economy new criminal laws to fight sports betting fraud and the manipulation of professional competitions are long overdue. The proposed changes would make it easier to hold colluding parties criminally responsible for their actions. Thus, they might contribute to the preservation - or in some cases recovery - of the integrity of sports and the economic interests of the involved parties.

The integrity of sports will be protected by the proposed new legislation. The new statutory offences will capture referees, athletes, coaches and equated persons for taking advantages and everybody for giving any advantages. Therefore, the new legislation will have huge impact on all kinds of sportsmen but also on the entire sports and betting industry. Last but not least, sponsors and investors need to know criminal law implications by dealing with sportsmen and their environment.

However, the legislative procedure will take its time until the new laws will be in force. The Draft includes new sections on Sports Betting Fraud, Manipulation of Professional Competitions and Severe Cases and International Scope of Application.