Monday 16 February 2015

More on Courtsiding

Eric is wondering first, what business the NZ police have enforcing ICC ticket terms and conditions regarding "courtsiding" by evicting from NZ cricket grounds spectators who are in violation of the T&C but not breaking any law, and second, why the ICC even wants to crack down on courtsiding. 

Eric, being a public choice guy, considers two reasons why the ICC officials might rationally want to ban courtsiding. I am more inclined to Hanlon's razor, and so here I want to explain why the ICC should be embracing courtsiding. 

Courtsiding, the sending of real-time game information by a live spectator to bookmakers or gamblers overseas quicker than the slightly delayed television feed,  is a kind of insider trading, so let's think about the analogy to financial markets. For all that they occasionally get things seriously wrong with bad consequences, financial markets are on balance a huge force for social good, enabling the efficient matching of savings to productive investment opportunities, and facilitating risk sharing. Less obviously, but still true, speculation is, on balance, beneficial, allowing information to be embedded in prices and letting people make good resource-allocation decisions in their area of expertise without being economic experts as well. This last point may not be self-evidently true to all readers of this blog, but just run with it for now.

Despite this view that speculation is beneficial, we have laws to exclude people with access to privileged information from using that information for financial gain betting on financial markets. The reason for thus is that for speculation to be beneficial, it needs to be competitive. If outsiders feel that they are playing in a rigged game, they will opt out of the market leaving a small group of insiders able to manipulate prices. The case against insider trading is not as clear cut as one might think, but the logic is clear in principal.

Now consider getting on cricket matches. Let's assume that the ICC's objective is to maintain the integrity of the sport (at least as far as games involving India, Australia and England are concerned) not the integrity of gambling markets per se. The analogy to the proscription on insider trading in financial markets then breaks down. The ICC's main concern with gambling on matches, should be the incentive it gives for large payments being made to players to deliberately lose matches or to indulge in spot fixing. If it became well known that the gambling markets were fixed due to things other than player match fixing such as courtsiding, the incentive for outsiders to participate in gambling markets would be reduced, with a corresponding reduction in the financial incentives to bribe players. 

So here is my advice to the ICC: Don't worry about courtsiding; get into the game yourself. And don't do it surreptitiously: Announce to the world loud and clear that you are participating in the betting markets, using real-time information from games, using private information from coaches about hidden player injuries, using information from the professional version of the Duckworth-Lewis formula (which is not in the public domain), etc. Who knows, if you make enough money from this enterprise, you might be able to afford to invite some associate nations to the 2019 World Cup. 

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