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Cricket is a three-way contest

In a week of dramatic developments, mostly of an unsavory flavor, the one sobering thought is that not all matches are fixed! The other unpleasant thought is that corruption is colour blind and the colour of one's skin does not ensure that moral standards would be maintained, in other words there is no "money apartheid'!

Also, while the conjectures mentioned generally hold, cricket matches are these days a three-way contest, with high stakes, and while the two teams are going through their motions there is a third interested- and 'committed'- stakeholder following each ball with anticipation and bated breath!

The Gandhian philosophy of there being enough for every man's need, but not enough for every man's greed, kept ringing in my ears as I tried to get to the bottom of this 'betting scandal'. What are the stakes? How does it work? What is the modus operandi?

A betting syndicate consists of an entrepreneur, a bookie, and a speculator or investor. The question arises whether betting is legal, and there is a Supreme Court judgement which states that anyone deriving any profit, or gain, in betting in which application of skills (of the bettor) is involved then it does not attract the penal provisions of the gambling act, in other words it is legal. The operative words are "application of skills". Betting is legal, in many countries, but "match fixing"- where participants in the match deliberately throw the game away- is illegal all over the world.

These fine definitions having been made. Let us examine betting in closer detail.

There are two types of bets:
a) one-time fixed outcome bets
b) continuous uncertain outcome bets

How does the system work?

To understand this let us suppose that there is a one-day match between India and Pakistan. The speculator, or investor, would phone the bookie, who would identify him by his individual code number. Each city has a number of bookies, who are very professionally organized, each bookie having at least 20 telephone lines, recording equipment, computers, 10-20 staff to attend to the phones, a running ledger and a hot-line connected to the entrepreneur in London or Dubai - the two acknowledged centers for this business. The bookies also have a number of cell phones, as the Sim cards can be frequently changed, ensuring that tracing calls becomes difficult. Dubai and London are well connected capitals, Dubai has no income tax, is just three or four hours flight from most Asian cities, encourages capital flows without too many embarrassing questions, and visa restrictions are generally not enforced. London is again only eight hours away, has good connections to Dubai, has a large NRI population, and attracts drug and espionage money.

Bookies are cash rich, and generally should have Rs 30 to 50 lacs to invest in the business. Bookies, in turn, are careful before enrolling new members, and usually do a thorough check of their antecedents. The new entrants have to be properly introduced, their financial status assessed and the rules of the game explained. There are some ethics here, such as no bets below Rs 10,000; all winnings can be collected on the same day; while losses can be paid up within 24 hours! Yes, the collection system is in place, and there are no escapes from honouring your debts, specially as this is a business conducted in trust.

Having contacted the bookie for an India Pakistan one-day match, the bookie would offer odds-hypothetically 50 paise on India and 40 paise on Pakistan winning the game. In other words, the perception reflects that Pakistan are favoured to win Assuming a sum of Rs 50,000 is placed on an Indian win with the bookie, the bookie will offer revised odds after the toss. Assuming that India wins the toss and, say, bats first in favourable conditions, in other words chasing a target could be difficult later on, the bookie may revise the odds to say 45 paise each on India and Pakistan, a difference of 5 paise, this before a ball is bowled. At this juncture the investor, or speculator, has the option to collect Rs 2500 from the bookie (Rs 50000 x 0.5 paise = Rs 2500) and leave, or place an additional bet. Similarly, a person having placed a bet on Pakistan, for the same amount, can pay Rs 2500 to the bookie, within 24 hours, as he has lost, and quit. This is the one time fixed outcome bet.

For the continuous, uncertain outcome bet, there is a running ledger maintained and all transactions are carefully recorded. Hence the need for a number of telephone lines, computerized details, and the ledger. The cell phones also come in handy. Odds are always changing, and every 'event' such as the fall of a wicket, a dropped catch, a high scoring over, a run out etc. has an impact on the odds.

For all the risks, the dangers, the money transactions, the investment on infrastructure and personnel, the bookie is at best a commission agent, and he receives two per cent of the transactions. The big player is the entrepreneur in London or Dubai, who has considerable stakes and runs many bookies in various countries during a match. He stands to win, or lose, in excess of Rs 250 crores in each match. The total amount of betting per game is at best only estimated, but it could be as high as Rs 10000 crores. The entrepreneur has to play for high stakes, he being the third player, in what otherwise is just a game of cricket between two teams.