Beware The Wolf: Can Esports Prevent Its Inevitable Match Fixing Scandal?

Something looked off.

A game of Dota2 in a East Asia market—this is as specific a geographic descriptor as can be divulged—was scheduled between two teams of middling success and middling spectator interest. These teams had just played a few weeks earlier and, unsurprisingly, those tilts had not generated much action in the gambling markets. Yet this contest, with the exact same teams and lineups, was attracting a swarm of gambling action. Moreover, that attention was centered around a single prominent sports book.

The bettors were going after the -1.5 handicap, meaning they were betting on a 2:0 victory for a given team. That set off alarm bells at Sportradar, which provides tracking, analysis, and integrity services. This was match fixing.

The first match of the best-of-three contest would have appeared, to a casual observer, on the up-and-up. Beneath the surface, however, the same strategies that seemed reasonable enough prima facie were cover for one team giving a little too much ground to the other. By the second match, subtlety had gone by the wayside. More glaring errors. More sloppy play. In short, a much more transparent effort at making that 2:0 victory—and more importantly, a 2:0 loss—a reality.

The esports betting public was completely unaware of the fix, an unusual occurrence in a sport where in-game fraud is oftentimes brought to the public's attention as it happens. This, too, was a problem. The fixer's modus operandi demonstrated a knowledge of match manipulation and bookmaking markets that was far beyond anything the Sportradar analysts had seen to date.

Esports' match fixers were getting better.

Sports have been played long enough and for high enough stakes that it feels safe to assert two things. First, any competition with enough interest can be bet on. Second, if a sport has been gambled on, it's plausible that match-fixing can or already has occurred on some level, at some time.

We have seen it in soccer, cricket and tennis, all of which have weathered full-blown scandals. Basketball has point-shaving, to say nothing of that one time a Paralympic hoops team stocked its roster with ringers. Baseball gave us the Black Sox Scandal. Racing, football, boxing; each one has been touched at one point or another (or many times).

Esports, however, could be more vulnerable than any of them.

"It's a very fragmented industry with many stakeholders, all in competition with each other," Ian Smith, the integrity commissioner of the Esports Integrity Coalition, said in a Skype interview.

This is the Wild West, where promotional companies, professional leagues and the game's publishers all establish their own esports competitions. It's a variety of competing fiefdoms and it's only compounded by the number of different games being played. Imagine something akin to the Olympics, but with no IOC to oversee everything.

"There's not much coherence, there's no governing body, there's no set of standards," Smith confirms.

Bristol-based ESIC was formed to provide some framework of a regulatory body to protect esports from cheating, doping and especially match fixing, where the grey and black markets of Asian gambling are of particular concern. Smith is a South African attorney with two decades of regulation and governance experience in traditional sports, including a stint as the Professional Cricketers' Association legal director. It was there when he first ran up against match-fixing, drafting English cricket's first set of Anti-Corruption Directives, which were implemented in 2000.

Smith envisions the system as a wagon wheel with ESIC at the center. The "outer ring" of the wheel is Sportradar, whose FDS is monitoring all of the esports markets--around 80 at last count--and tracking their odds in real time.

Any irregular betting patterns—e.g., the explosion in interest in that seemingly mundane East Asia Dota2 game—raises an alert, which Sportradar then parses via analysis. If no reasonable explanation can be found for the shifting odds, then a more senior person at Sportradar will get in touch with Smith, and a course of action is determined.

"This could be, and often is, three or four hours before the match that's in question," Smith says. "So you've got a range of options of how to react, but we don't just rely on that information. So I have information sharing memorandums of understanding with a number of betting operators who are offering esports markets, because they also have their own in-house integrity systems and software and algorithms. And every one of the betting companies is slightly different, they do things in a different way. So the way it works with us is that they are, in effect, the spokes of the wheel."

Depending on how hot the markets are, the betting companies will send an alert every week or two regarding matches that were flagged by their in-house systems. Smith then contacts all of the other members of his network—scrubbing the alert of any names or proprietary info—and asks if they are seeing anything unusual in the movement of the odds on their end.

If multiple markets are moving, or someone has an explanation, the match may continue as usual. If questions persist, ESIC, Sportradar, and the sports books can continue probing and observing, all before the match has even begun.

"In other words, we're kind of ahead of the curve," Smith said. "In general, if there's a fraud going on, we'll know about it. Because that's what the betting companies and companies like Sportradar are good at."

It's a level of foresight that no other league has enjoyed in such relative infancy. As a result, Smith has set a lofty expectation: To be the first major sport to head off a sweeping match-fixing scandal well before it strikes.

"Every single sport [with the exception of golf] has only put proper match-fixing regulations and procedures in place after they've been hit by a major match-fixing scandal," Smith said. "And my message to esports from day one has been, 'Let's do this before the scandal.' If you want to wait 'til afterwards, that's fine, but it's gonna be a hell of a lot harder and a lot more painful once your industry is rocked by a major scandal to do something meaningful about it."

But ESIC can only do so much. ESIC is a coalition of parties, which means it has no jurisdiction over anyone that isn't a member. This is not, in other words, a governing body which dominates the landscape and has the teeth to implement sweeping sanctions. Even if the match in question was conducted by an ESIC-affiliated organization, Smith cannot force the organization to take any action. All Smith can do inform the tournament operators, the books, and law enforcement of ESIC's suspicions, and hope they respond accordingly.

"And this is the problem that we face," he says. "In a sense, I'm the man who cried wolf. The only difference is, I know the wolf is coming."

Sportradar's job is to keep the predators at bay. Their Fraud Detection System and team of analysts provide an overview of the markets, an important function because movement in even one or a few books can be indicative of match fixing.

The FDS is a technology-heavy system that brings in data from over 550 bookmakers around the world, from the highly regulated U.K. all the way to those grey and black markets in Asia. All of this data is collated then analyzed, via a series of proprietary algorithms which are looking for aberrations in the betting patterns. From there, human insight and analysis do the rest to make sure the algorithm doesn't lose the forest through the trees.

"Not every betting pattern is suspicious enough to say, 'Oh, this match is fixed,'" said James Watson, head of esports for Sportradar. "There are many logical reasons that betting can happen on a game." An injury right before the match, for example, or a player having to drop out, or even rumblings of a player's relationship woes could all move the betting. The FDS' algorithms may not be able to take into account the various human elements that can cause legitimate heavy odds movements in a match.

"So we have a team of analysts spread across the world for 24/7 coverage," Watson continued. "In esports more specifically, we have a team of esports experts—it's not easy to find these guys that have betting experience, but we found them."

The breadth of competitions to bet on makes these experts in the specific games essential. To that end, Sportsradar deploys 40 analysts and 80 full-time staffers.*

Watson believes that their preventive arm is just as important in the fight against match-fixing as the FDS. Sportradar hosts face-to-face workshops with pros, league organizers, coaches, managers—"anyone with a professional interest in this area." From there, the organization teaches attendees at the workshops how to spot and report match fixers, helping to cut off one of the most vulnerable targets to fixing: the players themselves.

If that all sounds similar to Smith and ESIC's position, well, that's by design. Sportradar sees their relationships with ESIC, the sports books, and the leagues—Sportradar provides the data for the ESL, for example—as crucial to esports' becoming the major sport without a scandal.

"You end up with a really solid matrix of relationships that properly safeguard the integrity of the sport," said Alex Inglot, Sportradar's director of communications and PR.

The matrix partners with arguably the most to lose are the bookmakers. Not only are they direct victims of match-fixing—any unusual payouts come out of their coffers—but the onus is also on them to provide protection in their market.

"Any kind of market abuse or manipulation damages the integrity of sport, our customers and the industry," Pinnacle's director of trading Marco Blume wrote in an email response to VICE Sports' questions. Pinnacle, a sportsbook licensed and based in Curaçao**, is among the world's largest betting providers.

Any alert through Pinnacle's fraud system, which is similar to the FDS, gets flagged and reported to ESIC. Pinnacle is somewhat unusual in that, in addition to providing high betting limits, it does not boot players who win too much. That deepens the player pool and consequently "makes our traders incredibly sensitive to the reasons behind every line move we make," Blume wrote. "This puts us in a unique position to detect suspicious wagering activity, which if detected can be relayed to the ESIC."

The sheer amount of bets being placed makes Pinnacle an even more crucial member of Inglot's matrix. While it is impossible to corroborate with total certainty, both Smith at ESIC and Blume believe Pinnacle to be the world's largest esports bookmaker. The rise in betting has been nothing short of meteoric. Pinnacle took its first esports bet—from a Canadian named "Simon"—in 2010, hit the one million bet threshold in 2014 and cracked five million bets this February, knocking off ice hockey to become Pinnacle's fifth-most popular sport. It falls on Blume, an esports fan who was a high-level League of Legends player prior to joining Pinnacle, to ensure that their regulated esports market remains the world's largest and most competitive.

That means collaborating with ESIC to guard esports against their greatest threat: Organized crime.

"All major organized crime syndicates have historically had involvement in match-fixing," Smith wrote in an email, before going on to identify his wolves by name: Mafia, Ndrangheta, Yakuza, Triads and, one tier below, "betting syndicates that usually have organized crime connections."

Journalist and anti-corruption expert Ed Hawkins, who has covered sports betting for The Times, Sunday Times and Daily Mail, agrees with Smith's assessment.

"It is fertile ground," Hawkins wrote via email. "So I would be utterly flabbergasted if Mafia were not already involved in squeezing their ten cents and more. What you have to remember is that with any black or grey illegal, unregulated market, those seeking to corrupt it for gambling purposes have a green light. There is no paper trail which leaves back to their door. So when there is no paper trail, the smart make money. And the Mafia are some of the smartest around."

For his part, Smith does not believe the organized crime has their tentacles in too deep yet, at least not in the daylight.

"Given the volumes of organized crime involvement, the markets in esports are just not big enough, in the legal markets, to sustain that yet," Smith said. "The way organized crime looks at any ot these things is strictly as an investment, in terms of time and money. 'Is it worth it? What's your return?' So currently, you get a far better return in, for example, tennis or football or boxing or snooker or darts or these sort of individual sports in particular, because the amount of research and resource and money that you have to put in gives a far, far bigger return than what you currently get in esports."

This may sound unusual to those inundated with rosy outlooks of how fast esports are growing. While viewing numbers are extraordinary, as Bloomberg Gadfly points out, the direct revenue is still relatively meager, compared to traditional sports. Still, lots of eyes means lots of potential bettors, and Pinnacle's rapidly expanding esports market seems to bear that out.

Consequently, ESIC expects the regulated markets to become tempting within short order. As soon as 18 months from now, ESIC, Sportradar, and books like Pinnacle may soon see alerts popping up across the globe. And if Hawkins had to guess, ground zero will be Asia, where the Dota2 game was found out.

"If you have a grey or black betting on anything then you are certain to have interest in corruptors," Hawkins wrote. "In the legal system, Joe Bloggs wants to corrupt, say StarCraft II, so he goes to his high street bookie and has 20 other corruptors doing the same with their bookie. Well, guess what? Legal bookies have systems in place to counter this. As soon as they see an unusual money trail - and this can be a bet of as small as 50 bucks when the average is 10, they get skittish. So they limit stakes. And when the bets keep coming—and we're talking as little as 5 or 6—they will shut the whole market down. So it's impossible to corrupt anything. Anything. On a legal, regulated market. So they have to go black."

But, how? While covering the cricket market in India for his book Bookie Gambler Fixer Spy, Hawkins learned how easy match fixers can get in on a game.

"The player—cricketer, soccer player, gamer—will be approached by a 'fan', who will lavish him with praise, attention, gifts," Hawkins wrote. "Then he might be offered a wad of cash. I heard a story in cricket from a guy who was close to this world. He told me that they just hand over several thousand dollars and say to the kid 'Hey, it's yours, take it. Go, go!' And they don't ask him to do anything. No one ever turns it down. It's just for him to spend. The a few weeks later they come back to him and say 'Can you help us with something?' This might be information about the match. Or it might be to do something small in a match. And then it grows and grows as does the money."

And once players are snared, organized crime leans on its time-tested methods of coercion to ensure that the cash keeps flowing.

"We've all seen the mob movies haven't we," Hawkins wrote. "It's not made up stuff."

For all of its vulnerabilities, esports may yet prove to be the game that gets ahead of match-fixing, the sport who avoids the cataclysmic, foundation-rattling scandal. That esports take place entirely within a digital world means that they can be analyzed, observed, and tracked in granular detail with blinding celerity, powerful algorithmic tools that the protectors of the world's other sports cannot utilize in the same way.

Smith is optimistic. Unlike his experience in cricket, or tennis and soccer. the esports world seems ready to heed ESIC's warnings. When asked why they did not get in front of their respective scandals, Smith wrote in an email that it was "Denial, plain and simple. [They] didn't believe it was a problem."

That isn't the case here, but there's plenty of work to be done. Just two weeks ago, Overwatch experienced its first scandal, when Korean team UnLimited reportedly threw a match in exchange for a sponsorship. The manager and coach of the other team, Luminous Solar, were taken into police custody. They almost certainly will not be the last.

ESIC, Pinnacle, Sportradar, anti-corruption experts and esports itself all know the wolf is coming. The question is, can they stop it?

*An earlier version of this story incorrectly stated that Sportsradar's team is only 40 people.

*An earlier version of this story incorrectly stated that Pinnacle was based in the United Kingdom.