Digital Piracy of Live Content and Online Illegal Gambling: Evidence from Live Sports Broadcasting

When digital content that was once freely available through public (or free) distribution channels becomes unavailable, users are often compelled to resort to illegal channels for pirating the content. In many cases, these illegal content distributors generate profits by affiliating with illicit partners such as illegal gambling sites, while offering the content to users for free. This practice is particularly prevalent in live sports broadcasting markets. As such, this research seeks to investigate how digital piracy of live sports content is associated with illicit gambling activities. In September 2020, a leading media company in South Korea ceased selling the license of English Football League (EPL) broadcasting to popular media outlets that previously offered the content for free and started charging subscription fees for the content views. Using this event as an exogenous shock (i.e., treatment event), we analyze the causal relationship between digital piracy and illegal gambling activities. The study finds that the more individuals visited the illegal sports broadcasting website, the more likely they were to engage in illicit gambling activities. The main research findings make significant contributions to our understanding of the digital piracy of live content and its potential societal consequences.