Sport and Gambling

We review the relationships between gambling and sport. British sports and sports infrastructure have benefited considerably from funding through the National Lottery. We argue that there is an implicit sports tax on lottery products and that this policy may be neither efficient nor equitable. We suggest that further research, employing contingent valuation methodology, would be required before any firm conclusion could be made over whether the spending facilitated by the tax represents an efficient allocation of resources. Betting on events and outcomes in sport, especially team sports, has become a high-growth sector; we explore the potential for sports to capture some of this bettor spending and discuss associated public-policy issues. While sport may extract revenue from betting, there are also costs. We focus especially on betting corruption in sports, developing an expected utility framework to show where the risk of corruption is most likely to arise and what regulatory options are open to sports governing bodies and government.