Pritha Chakravarti and Felix Boronczyk

This study quantifies the negative effects of corruption on sponsors of the Indian Premier League (IPL) and presents unbiased sponsor-linked outcomes as its results. The event study methodology was used for the purpose of measuring the reaction of the Indian shareholders to the unexpected event that was the decision of the Supreme Court of India to ban two teams and several officials from cricketing affairs for life in response to the discovery of corruption. The results of this study show there is an immediate loss in firm value for sponsors that are linked to events and teams proved to...Read more

George Diemer
Michael A. Leeds

The possibility that coaches, players, or referees might be involved in point shaving has been a subject of debate since Wolfers’s (2006) controversial finding that favorites in NCAA college basketball games fail to cover point spreads with disturbing frequency. We reconcile Wolfers’s finding with evidence provided by Borghesi (2008), Borghesi and Dare (2009), and others that heavy favorites are not, on average, less likely to cover the point spread. We find that the distribution of game outcomes is bimodal, with one peak on one side of the “no corruption” outcome and one peak on the other...Read more

David Forrest
Ian McHale
Kevin McAuley

The paper identifies key changes in the betting environment that have raised risks to the integrity of sport. The risks are discussed in the context of a model where potential fixers evaluate the costs and benefits to them of engaging in manipulation of events on the field for betting gain. Using this framework, particular markets and situations are indicated as especially susceptible to corruption and these predictions appear to be consistent with the set of cases that have been exposed in contemporary sport. Possible policy responses are discussed.Read more