Evans, Richard and Walters, Geoff and Hamil, Sean (2022) Gambling in professional sport: the enabling role of regulatory legitimacy. Corporate Governance: The International Journal of Business in Society 22 (5), pp. 1078-1093. ISSN 1472-0701.
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Abstract
Purpose: This article seeks to explain why organisations remain vulnerable to financial failure despite increasing financial regulation to improve governance. Using a case study of gambling and regulation in professional football in England, it introduces the concept of ‘regulatory legitimacy’ to show how this enables football clubs to gamble. Design/methodology/approach: The article quantifies the extent to which football clubs in the Championship of the English Football League (EFL) adopt a conventionally economically irrational decision to run a loss-making budget in the hope of achieving sporting success. The article postulates criteria for evidence of this form of gambling by overspending on playing talent with data from the clubs’ published financial statements. A pay-off matrix is developed to compare the intended and actual outcomes. Findings: The research finds that this strategy was both prevalent and the most successful to achieve promotion. Originality/value: This article makes three contributions. The first is the quantification of the prevalence of this form of gambling. The second is the finding that, despite regulations to limit spending on wages, gambling is rational in the non-economic sense because it is almost a necessary strategy to achieve promotion if the club had not been relegated from the Premier League in the previous season. The third contribution is the development of the concept of ‘regulatory legitimacy’ as a way to understand the process through which regulations are implemented yet are ineffective at curbing financial gambling.
Metadata
| Item Type: | Article |
|---|---|
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Research Centres and Institutes: | Birkbeck Sport Business Centre |
| Depositing User: | Geoff Walters |
| Date Deposited: | 27 Jan 2022 10:30 |
| Last Modified: | 02 Aug 2023 18:14 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/47168 |
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