Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The legality of surety undertakings in relation to minor football players: the Lokilo case. By Adriaan Wijckmans

Editor's note: Adriaan Wijckmans is an associate specialized in sports law at the Belgium law firm Altius.

In a recent judgment, the Brussels Court of First Instance confirmed the legality of a so-called surety undertaking, i.e. an agreement in which the parents of a minor playing football guarantee that their child will sign a professional contract with a football club as soon as the child reaches the legal age of majority.

This long-awaited ruling was hailed, on the one hand, by clubs as a much needed and eagerly anticipated confirmation of a long-standing practice in Belgian football[1] and, on the other hand, criticised by FIFPro, the international player’s trade union, in a scathing press release. More...



Kosovo at the Court of Arbitration for Sport – Constructing Statehood Through Sport? By Ryan Gauthier (Thompson Rivers University)

Editor's Note: Ryan is Assistant Professor at Thompson Rivers University, he defended his PhD at Erasmus University Rotterdam in December 2015. His dissertation examined human rights violations caused by international sporting events, and how international sporting organisations may be held accountable for these violations. 


“Serious sport…is war minus the shooting.” – George Orwell

 

In May 2016, the Union of European Football Associations (UEFA) admitted the Football Federation of Kosovo (Kosovo) as a member. The voting was close, with 28 member federations in favour, 24 opposed, and 2 whose votes were declared invalid. The practical outcome of this decision is that Kosovo would be able participate in the UEFA Euro championship, and that Kosovo teams could qualify for the UEFA Champions’ League or Europa League. More...


International and European Sports Law – Monthly Report – February 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked. More...

FIFA's Responsibility for Human Rights Abuses in Qatar – Part II: The Zurich Court's Ruling - By Tomáš Grell

Editor’s note: Tomáš Grell comes from Slovakia and is currently an LL.M. student in Public International Law at Leiden University. He contributes also to the work of the ASSER International Sports Law Centre as a part-time intern.

This is a follow-up contribution to my previous blog on FIFA's responsibility for human rights abuses in Qatar published last week. Whereas the previous part has examined the lawsuit filed with the Commercial Court of the Canton of Zurich ('Court') jointly by the Dutch trade union FNV, the Bangladeshi Free Trade Union Congress, the Bangladesh Building and Wood Workers Federation and the Bangladeshi citizen Nadim Shariful Alam ('Plaintiffs') against FIFA, this second part will focus on the Court's ruling dated 3 January 2017 ('Ruling').[1]  More...



FIFA's Responsibility for Human Rights Abuses in Qatar - Part I: The Claims Against FIFA - By Tomáš Grell

Editor’s note: Tomáš Grell comes from Slovakia and is currently an LL.M. student in Public International Law at Leiden University. He contributes also to the work of the ASSER International Sports Law Centre as a part-time intern.

On 2 December 2010, the FIFA Executive Committee elected Qatar as host of the 2022 FIFA World Cup ('World Cup'), thereby triggering a wave of controversies which underlined, for the most part, the country's modest size, lack of football history, local climate, disproportionate costs or corruption that accompanied the selection procedure. Furthermore, opponents of the decision to award the World Cup to the tiny oil-rich Gulf country also emphasized the country's negative human rights record.

More than six years later, on 3 January 2017, the Commercial Court of the Canton of Zurich ('Court') dismissed the lawsuit filed against FIFA[1] jointly by the Dutch trade union FNV, the Bangladeshi Free Trade Union Congress, the Bangladesh Building and Wood Workers Federation and the Bangladeshi citizen Nadim Shariful Alam ('Plaintiffs').[2] The Plaintiffs requested the Court to find FIFA responsible for alleged human rights violations of migrant workers in connection with the World Cup in Qatar. Had the Plaintiffs' claims been upheld by the Court, such decision would have had far-reaching consequences on the fate of thousands of migrants, mostly from India, Nepal and Bangladesh, who are currently working on the construction of sporting facilities and other infrastructure associated with organization of the World Cup. More...

Doyen vs. Sporting II: The Bitter End of Sporting’s Fight at the Swiss Federal Supreme Court. By Shervine Nafissi

Editor’s Note: Shervine Nafissi (@SNafissi) is a Phd Student in sports law and teaching assistant in corporate law at University of Lausanne (Switzerland), Faculty of Business and Economics (HEC).

 

Introduction

The factual background

The dispute concerns a TPO contract entitled “Economic Rights Participation Agreement” (hereinafter “ERPA”) concluded in 2012 between Sporting Lisbon and the investment fund Doyen Sports. The Argentine player was transferred in 2012 by Spartak Moscow to Sporting Lisbon for a transfer fee of €4 million. Actually, Sporting only paid €1 million of the fee while Doyen Sports financed the remaining €3 million. In return, the investment company became the owner of 75% of the economic rights of the player.[1] Thus, in this specific case, the Portuguese club was interested in recruiting Marcos Rojo but was unable to pay the transfer fee required by Spartak Moscow, so that they required the assistance of Doyen Sports. The latter provided them with the necessary funds to pay part of the transfer fee in exchange of an interest on the economic rights of the player.

Given that the facts and circumstances leading to the dispute, as well as the decision of the CAS, were fully described by Antoine Duval in last week’s blog of Doyen vs. Sporting, this blog will solely focus on the decision of the Swiss Federal Supreme Court (“FSC”) following Sporting’s appeal against the CAS award. As a preliminary point, the role of the FSC in the appeal against CAS awards should be clarified.More...

Doyen vs. Sporting I: Doyen’s Pyrrhic Victory at the CAS

At the end of December 2015, the CAS decided on a very public contractual dispute between Sporting Clube de Portugal Futebol SAD (Sporting) and Doyen Sports Investments Limited (Doyen). The club was claiming that Doyen’s Economic Rights Participation Agreement (ERPA) was invalid and refused to pay Doyen’s due share on the transfer of Marcos Rojo to Manchester United. The dispute made a lot of noise (see the excellent coverage by Tariq Panja from Bloomberg here, here and here) as it was the first TPO case heard by the CAS after FIFA’s ban. Yet, and it has to be clear from the outset, the case does not affect the legality of FIFA’s TPO ban; it concerned only the compatibility of Doyen’s ERPA with Swiss civil law. The hearing took place in June 2015, but the case was put under a new light by the football leaks revelations unveiled at the end of 2015 (see our blog from December 2015). Despite these revelations, the CAS award favoured Doyen, and was luckily for us quickly made available on the old football leaks website. This blog will provide a commentary of the CAS decision. It will be followed in the coming days by a commentary by Shervine Nafissi on the judgment, on appeal, by the Swiss Federal Tribunal. More...

UEFA’s Financial Fair Play Regulations and the Rise of Football’s 1%

On 12 January 2017 UEFA published its eighth club licensing benchmarking report on European football, concerning the financial year of 2015. In the press release that accompanied the report, UEFA proudly announced that Financial Fair Play (FFP) has had a huge positive impact on European football, creating a more stable financial environment. Important findings included a rise of aggregate operating profits of €1.5bn in the last two years, compared to losses of €700m in the two years immediately prior to the introduction of Financial Fair Play.



Source: UEFA’s eighth club licensing benchmarking report on European football, slide 107.


 Meanwhile the aggregate losses dropped by 81% from €1.7bn in 2011 to just over €300m in 2015.More...




International and European Sports Law – Monthly Report – January 2017. By Saverio Spera.

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked. 


The Headlines

The Diarra ruling of the Tribunal of Charleroi

On 19 January 2017, the Hainaut Commercial Tribunal – Charleroi rendered its decision on the lawsuit filed by the football player Lassana Diarra against FIFA and the Belgian FA (URBSFA) for damages caused by not being able to exercise the status of a professional football player during the entire 2014/2015 season. The lawsuit is linked to the decision, rendered by the FIFA Dispute Resolution Chamber (DRC) on April 2015, to support Lokomotiv’s decision to terminate the player’s contract and to order Diarra to pay Lokomotiv the amount of EUR 10,500,000 for having breached his contract. According to the plaintiff, Diarra’s opportunity to be recruited by Sporting Charleroi was denied due to the club being potentially considered jointly liable for Diarra’s compensation pursuant to Article 17 (2) RSTP. The Belgian court held strongly that “when the contract is terminated by the club, the player must have the possibility to sign a new contract with a new employer, without restrictions to his free movement”. This case highlighted, once again, the need to read the RSTP in the light of EU law. Moreover, the decision is laying further ground for broader challenges to the RSTP on the basis of EU law (for a deeper insight into the Diarra ruling, see the recent blog written by our senior researcher Antoine Duval) More...


Asser International Sports Law Blog | Towards a Suitable Policy Framework for Cricket Betting in India - By Deeksha Malik

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Towards a Suitable Policy Framework for Cricket Betting in India - By Deeksha Malik

Editor's note: Deeksha Malik is a final-year student at National Law Institute University, India. Her main interest areas are corporate law, arbitration, and sports law. She can be reached at dkshmalik726@gmail.com.


In 2015, while interrogating cricketer Sreesanth and others accused in the IPL match-fixing case, Justice Neena Bansal, sitting as Additional Sessions Judge, made the following observations as regards betting on cricket matches.

“Cricket as a game of skill requires hand-eye-coordination for throwing, catching and hitting. It requires microscopic levels of precision and mental alertness for batsmen to find gaps or for bowlers to produce variety of styles of deliveries’ (medium pace, fast, inswing, outswing, offspin, legspin, googly). The sport requires strategic masterminds that can select the most efficient fielding positions for piling pressure on the batsmen. Based on above description, cricket cannot be described anything, but as a game of skill.”

The debate on the issue of betting in sports has since resurfaced and gained the attention of sportspersons, media, sports bodies, policymakers, and the general public. In April 2017, the Supreme Court bench comprising of Justices Dipak Misra and AM Khanwilkar agreed to hear a public interest litigation (PIL) seeking an order directing the government to come up with an appropriate framework for regulating betting in sports. The arguments put forth in the PIL present various dimensions. One of these pertains to economic considerations, a submission that regulated betting would be able to generate annual revenue of Rs. 12,000 crores by bringing the earnings therefrom within the tax net. As for policy considerations, it was submitted that a proper regulation in this area would enable the government to distinguish harmless betting from activities that impair the integrity of the game such as match-fixing. Further, betting on cricket matches largely depends on the skill of the concerned players, thereby distinguishing it from pure chance-based activities.

The issue of sports betting witnesses a divided opinion till this day. This is understandable, for both sides to the issue have equally pressing arguments. Aside from its regulation being a daunting task for authorities, sports betting is susceptible to corruption and other unscrupulous activities. At the same time, it is argued that it would be better for both the game and the economy if the same is legalised.

THE MAGNITUDE OF CONSIDERATIONS

It is feared by some that the consequences of recognition and legalisation of betting could be negative, considering what happened in Australia. Australia legalised online betting in 2001, and by 2009, it found itself in a situation where betting took over the sporting landscape in a big way. The impact was clearly visible; betting was marketed extensively in public places, attracting many young potential punters. Some found the trend disturbing, for sports fans were more concerned about their personal gains than about the sport itself. It is estimated that around 500,000 Australians are on the verge of becoming “problem gamblers.”

There has been an increasing support for the other side of the debate that argues for recognition of betting as a legal activity. It is argued that criminalising betting does not prevent its happening; it merely drives the activity underground where it continues to thrive. Add to it the substantial revenues that government would be able to obtain therefrom. In fact, the Report of the Supreme Court Committee on Reforms in Cricket, also called the Lodha Committee Report, submitted that given the worldwide legal sports betting market which is worth over $400 billion, it will be in the best interest of the economy if betting is given legal recognition.

POSITION IN THE USA AND THE UK: GROWING ACCEPTANCE OF THE UK-BASED MODEL

In the USA, federal law has taken a tough stand against betting and gambling. The 1992 Professional and Amateur Sports Protection Act (PASPA) makes it unlawful for a person to sponsor, operate, advertise, or promote betting, gambling, or wagering scheme based, directly or indirectly, on one or more competitive games in which amateur or professional athletes participate. The provision prima facie makes no distinction between betting and gambling, and it is, therefore, irrelevant for the purpose of establishing an offence under this provision whether the activity in question involves skill or not.

On the other hand, one may refer to the position in the UK, where there has been a well-developed betting market with appropriate measures to ensure that the system is not abused. The governing organisation in this regard is the UK Gambling Commission, initially set up under the 1960 Betting and Gaming Act which works in partnership with all the sporting bodies which, in turn, frame their own bye-laws to regulate betting.[1] Apart from licensing requirements, the framework provides for an information-sharing system, whereby bookies are required to report any suspicious betting activity within their knowledge to the Gambling Commission.[2] The example of the UK shows how through appropriate safeguards and implementation policy that involves various stakeholders such as the sports bodies and the booking companies, sports betting could be effectively regulated, bringing, at the same time, significant economic advantage. It does not come as a surprise that a majority of Americans have advocated for a UK-based model.

Recently, the Supreme Court of the United States began dealing with the issue in the case of Christie v. National Collegiate Athletic Association. The State of New Jersey seeks to get the PASPA annulled, which, in turn, would facilitate state-sponsored sports betting. It is being submitted that the federal government through the aforesaid statute is violating the anti-commandeering principle of the Tenth Amendment, according to which states cannot be mandated to carry federal acts into effect. The outcome of the case would certainly have an impact on the debate, one way or the other.

POSITION IN INDIA: THE ‘GAME OF SKILL’ DEBATE

In India, the power to legislate on betting and gambling is conferred on states, since these subjects are enlisted in the State List. Nevertheless, the pre-independence legislation, namely the 1867 Public Gambling Act (Act), is still valid today, though some states have enacted their own laws pertaining to betting and gambling. Section 12 of this Act provides that it does not apply to a ‘game of skill.’ The legislation, therefore, makes a distinction between a ‘game of chance’ and a ‘game of skill.’ The term ‘game of chance’ has been explained in the case of Rex v. Fortier[3] as a game “determined entirely or in part by lot or mere luck, and in which judgment, practice, skill or adroitness has honestly no office at all or is thwarted by chance.” It has further been held in the case of State v. Gupton that any athletic game or sport is not a game of chance and instead depends on a number of factors such as skill, ability, form and practice of the participants.

At this juncture, reference must be made to the case of KR Lakshmanan v. State of Tamil Nadu, wherein it was held by the Supreme Court of India that horse racing, foot racing, boat racing, football and baseball are all games of skill. Betting on, say, a horse race entails use of evaluative skills in order to assess several factors such as speed and stamina of the horse, performance of the jockey, and the like. Similarly, the Supreme Court in State of Andhra Pradesh v. K Satyanarayana observed that rummy is not like a three-card game which is based substantially on chance. There is considerable amount of skill involved in memorising the cards, or in holding and discharging them, in a rummy game. The uncertainty involved in shuffling and distribution of the cards does not alter the character of the game to one based on chance.

Based on these judgments, it is reasonable to infer that betting in cricket, too, is an activity involving sufficient skill and is not based merely on chance. A person who studies the form and performance of a player, the conditions of play and the like could predict the outcome of a game with a reasonable accuracy. The mere uncertainty of the outcome should not come in the way of understanding sports betting as an activity based on skill. Considering this important factor, the government should proceed to develop an appropriate framework to regulate betting. 

A PRACTICAL POLICY FRAMEWORK

The International Cricket Council, too, has suggested that India should come up with a suitable policy framework to regulate betting.[4] Such a framework would keep a check on individuals and further help detect and prevent corrupt activities. The above-mentioned Lodha Committee Report has strongly recommended legalising cricket betting in India. The suggestion is based on the premise that while match-fixing interferes with the integrity of the game itself and is unacceptable, betting is a “general malaise” indulged by different sections of the society and is capable of being regulated. Therefore, betting should not be equated with unscrupulous activities such as match-fixing.

Having been so distinguished, a regulation along the lines of the UK model could be put in place to establish regulatory watchdogs tasked with monitoring betting houses and persons entering into betting transactions. Those placing bets could be brought within a licensing system wherein their identification and other details are recorded. This could be supplemented by an information-sharing mechanism whereby a database of undesirable entities such as bookies and fixers would be shared with players so that they do not remain in the dark with respect to suspicious activities. Importantly, players, match officials and administrators should be kept out of such regulated betting, and they should continue to be bound by the Board of Control for Cricket in India (BCCI) and IPL rules. It is important to note here that the BCCI Anti-Corruption Code prohibits participants from soliciting, authorising, placing, accepting, laying, or otherwise entering into any bet with any person in relation to the result, progress, conduct or any other aspect of any match or event. The Code further makes it an offence to ensure “the occurrence of a particular incident in a match or event, which occurrence is to the participant’s knowledge the subject of a bet and for which he/she expects to receive or has received any reward.” As can be seen from the provisions, the liability is imposed specifically on the participant. This is in line with the opinion of the Lodha Committee, which has recommended that if betting were to be legalised, the players should nevertheless be barred from indulging in the activity so as to prevent any apprehension concerning their integrity. It is submitted that bringing these reforms in the current uncertain and highly ambiguous regime would address several surrounding issues, provided all the stakeholders work in tandem.

Lesson could be learnt from the state of Nagaland, which recently enacted a law, namely the 2016 Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act. The said legislation defines “games of skill” as including “all such games where there is a preponderance of skill over chance, including where the skill relates to strategising the manner of placing wagers or placing bets, or where the skill lies in team selection or selection of virtual stocks based on analyses, or where the skill relates to the manner in which the moves are made, whether through deployment of physical or mental skill and acumen.” Besides providing such an inclusive definition, the Act sets out a schedule enlisting certain activities that shall be regarded as games of skill, such as poker, rummy and virtual games of cricket and football. All such games shall be regulated by way of issuance of a license to persons or entities based in India. Upon receiving the license, such a person or entity is eligible to earn revenue from games of skill, whether by way of advertising, obtaining a share of winnings or charging a fee for membership.

Some stakeholders are advocating for a uniform legislation on betting that would ensure that the legal position on betting remains the same across all the states. In July 2017, the All India Gaming Federation along with an advisory panel presented a white paper to Law Commissioner BS Chauhan, recommending a central legislation regulating online skill gaming, and that sports betting in general and cricket betting in particular be recognised as a game of skill. Such a legislation could introduce a system of checks and balances along the lines of that existing in the UK, for instance. A proposal has also been moved from the Central Information Commission in the case of Subhash Chandra Agrawal v. PIO, recommending the Government of India to consider moving the subject of sports from the State List in the Constitution of India to the Concurrent List so as to ensure a uniform policy regulating sports bodies and national sports federations such as the BCCI.

CONCLUSION

The international discourse on the issue of sports betting shows just how inadequate the Indian legal regime is to cater to the same. Suggestions have been pouring in from all quarters as to how, upon being legalized, cricket betting could be regulated. These suggestions, along with international best practices concerning ethics and betting, should be taken into account by the legislature and the executive to bring in an appropriate framework to address cricket betting. This, of course, requires the active participation of all the stakeholders, with the BCCI leading the way. 


[1] Ali Qtaishat and Ashish Kumar, ‘Surveying the Legality Issues and Current Developments’ (2013) 20 JL Policy and & Globalization 40, 42.

[2] See Gambling Act 2005 s 88.

[3] Rex v. Fortier 13 Que. KB 308.

[4] Rohini Mahyera, ‘Saving Cricket: A Proposal for the Legalization of Gambling in India to Regulate Corrupt Betting Practices in Cricket’ (2012) 26 Emory Int'l L. Rev.

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