Match Fixing and Sports Betting in Football: Empirical Evidence from the German Bundesliga

Corrupt behavior by regulators occurs frequently and imposes costs on society. Corruption can take many forms and corrupt regulators try to hide their actions, making detection difficult. We use a unique data set to analyze variation in bet volume on Betfair, an online betting exchange, for evidence of abnormal patterns associated with specific regulators (referees) enforcing regulations in football matches. An analysis of betting on 1,251 Bundesliga 1 football matches over five seasons reveals evidence of systematically higher bet volume for two referees relative to matches officiated by all other referees, indirect evidence that corruption, in the form of match fixing, occurred. Results from a randomization experiment using Fischer exact p-values, a novel method for detecting corruption, confirm these results.