The German Referee and the Betting Scandal

Published 29 September 2010

By Dr. Joachim Rain. Currently, the state attorney in Bochum (Germany), in cooperation with UEFA, is investigating the latest betting and manipulation scandal, that seems to have affected most European countries and - as rumours say - have a larger extent and impact than anything before.

In order to have an idea about what the legal consequences of these investigations might be on different legal fields, this article intends to recall and present the legal surroundings of the 2005 referee and betting scandal.


Background 

In January 2005, rumours occurred that dozens of matches in Germany, mainly in the 2nd and 3rd league have been manipulated by a couple of referees who had been corrupted by a betting mafia group based in Berlin. The main suspect among the referees involved finally confessed his manipulation and by this highly contributed to detect all manipulations and parties involved. Several lawsuits before German Criminal Courts, Civil Courts and the jurisdiction of the German FA followed, that shall be briefly summarized in the following chapters. 
Jurisdiction 

a) Several members of the betting mafia have been sentenced for up to 3 years, also two referees were sentenced for two years and four months and for two years on parole. Experts in Criminal Law intensely discussed and disputed, whether or not the behaviour of the referees could be sanctioned as a fraud under the German Criminal Code, which was finally confirmed by the German Federal Court, but has been a rather delicate issue before, because everybody felt that manipulating "Germany's dearest baby football" should be sanctioned by means of criminal law, but many experts asserted that there is a gap in the relevant legislation that does not allow to apply the fraud regulations upon the situation at stake. 

b) In a civil procedure, that finally ended by settlement, the main members of the betting mafia were found responsible to pay back their gains to the betting companies, that aroused from an illegal influence upon the chances of the match results. On the other side, spectators who claimed back the purchase price for tickets for manipulated matches, regularly lost their cases, because the majority of the courts was of the opinion that basically they got what they had paid for, which was the fun of enjoying a football match in a stadium, not being aware that the match is manipulated in fact when watching it. 

c) From a legal view, one of the most interesting cases was a cup match between a 3rd and 1st league team, that has been - uncontested fact - manipulated by a referee, maybe even supported by a player of the 3rd league team. The referee admitted to have given a penalty and a red card to the detriment of the 1st league team which he wouldn't have done if he wasn't instructed to make the 3rd league team win, who as an underdog would create perfect odds for the betting mafia who made huge amounts with that match. 

The relevant match was a match of the first leg of the German Cup, which took place in late summer 2004. The procedure before the German FA's jurisdiction, who had to deal with a completely new phenomenon their regulations did not provide rules for, started in Feb 2005 and - through all instances - would not have ended before April/May 2005 in any case, in other words in the best case shortly before the end of the season and shortly before the Confederations Cup in summer 2005 in Germany was about to start, so obviously the schedule did not allow too many rematches. 

Yet, since we are talking about a first leg match and the Cup competition had already proceeded to the fourth leg, the consequences of the appeal of the first league team, that was rather likely to be successful, would not have been limited to replaying just one match. Even worse, there was a strong possibility that the rematches could not even be limited to the matches of the clubs involved in the following legs: The draw regulations at that time provided, that there were two different pots for the draw of the matches of the second leg, one with clubs from the first and second, one with the clubs from lower leagues (who by the way are always entitled to play at home). Accordingly, since the 3rd league team advanced to the 2nd leg instead of (maybe) the 1st league team, the winner of this match ended up in another pot than the other team would have, so the total number and composition in both pots would obviously have changed. As a consequence, there were serious arguments to consider to repeat the draw for the second leg and to restart the whole Cup competition form the 2nd leg on!

It was impossible to implement such a large number of matches into the schedule at that late stage of the season, with the Cup final not too far ahead and nearly the whole competition to be restarted. 

Therefore, a solution had to found, which finally was a financial compensation of the 1st league team for the (potential) damages suffered by their manipulated first leg loss. 

Although under experts it was highly disputed whether or not the German FA was legally liable for the misbehaviour of the referee acting on their behalf, for the sake of calming down the situation and preventing further harm to the competition, the German FA finally entered into a settlement agreement with the 1st league team compensating them for their financial losses. 

In the next step, they sued the corrupted referee for reimbursement of their settlement payment to this club, another lawsuit with highly interesting issues: 

One of most triggering issues in that context was, whether they can hold him responsible for a damage they had incurred by their free decision, because nobody forced them to buy off the team in turn for withdrawing their appeal in the cup competition. The Civil Court in Berlin, that was dealing with this case, pointed out that the German FA was entitled to act as they did in order to avoid higher damages that might easily have occurred by a burst of the whole club competition, ending up in the uncertainty about who represents Germany in the UEFA Cup as the Cup Winner until possibly far into the next season. Finally, basically owed to the fact that the referee never would have been in the position to settle the whole claim he was facing, the parties entered into a settlement. 

d) The German FA's jurisdiction had to develop a completely new jurisdiction, due to the lack of specific regulations or ancient jurisdiction regarding manipulations, that so far nobody ever deemed to happen in German football. 

They basically established two major criteria that had to be proven by the club who appealed against the result of a manipulated match: First, it had to be proven, that there was an agreement to manipulate a match. Since there were a couple of matches in which the manipulated referee confessed to have entered into such agreement and received money for its execution, but then added, that either due to the natural development they didn't have to interfere or no situation occured in which they might have manipulated without raising suspicion, the sports court had to consider whether it is sufficient to have a referee who is only prepared to manipulate or if he actually must have manipulated. 

Finally, the court decided, also for the sake of limiting the number of necessary rematches and last but least applying the FIFA principle, that a rematch may only be ordered under exceptional circumstances, that an actual manipulation must be proven and this manipulation must have had effect on the result of the match. 

This jurisdiction experienced consent, but also criticism: A referee who is bribed and prepared to decide against what he is convinced of can easily by chance take the right decision, i.e. for example grant a penalty kick, that he wouldn’t have granted without being manipulated, because from his true subjective perspective, he failed to recognize that there was a foul within the penalty area. 

Moreover, this jurisdiction left the choice to say that the result of a match that ended 4-0 was not influenced by an intentional mistake of the referee in connection with the first goal, because everybody knows that almost every match takes a different course once the first goal has been scored. 

Consequences in legislation 

The referee and betting scandal in 2005 lead to the implementation of numerous new rules and regulations by the German FA. Among others, players and officials were prohibited from betting upon matches they were involved. Furthermore, specific regulations governing the sanctions for any involvement into manipulations have been introduced as well as specific preconditions for the appeal against manipulated matches, basically following the criteria that have been established by the sports court before those specific rules have been created. 

As a consequence of the at that time unforeseeable practical problems of detecting a manipulation at a time when the competition concerned has been progressed so far, that one cannot just turn back the wheel, the right to appeal has been time-barred to that degree, that manipulated league matches are not subject to rematches or point deduction after June 30, whereas the results of Cup matches cannot be appealed any more once the next leg has been played. 

Consequences for the current investigations 

Especially on the field of sports jurisdiction, the juridical bodies seem to be prepared to deal with the results of the investigations, if any that are falling under their jurisdiction (which the betting mafia itself certainly doesn't). The new and specific regulations about match fixing etc. allow to cover and duely sanction all misbehaviour of players, coaches, referees etc. in connection with manipulations. Another wave of lawsuit regarding match results is rather unlikely to happen again, since the time-bar rules in the new regulations do not allow appeals against match results from previous seasons. 

After the Federal Court had decided, that match manipulation is to be deemed criminal fraud (under certain circumstances), it is also rather likely that instance courts will not hesitate to sentence the people involved, whereas it is remarkable, that apparently the sentences rendered in the 2005 scandal have not been deterring enough to overwhelm the temptation of giving it another try: The key person of the 2005 scandal, who went to jail for some years after, seems to be in the middle of new scandal again! 

Nevertheless, the trust in properly investigating and sanctioning the latest manipulations on a all relevant juridical levels prevails. 

Dr. Joachim Rain 
Sports Lawyer in Ludwigsburg/Germany