World Cup Highlights Asia’s Illegal Betting Boom
By Kelvin Chan 19 June 2014
HONG KONG — As teams battle for football glory at the World Cup in Brazil, the biggest winners from the tournament may be illegal bookmakers in Asia.
Since kickoff, Chinese officer worker Chen has already wagered 2,000-3,000 yuan (US$320-$480) through black market online bookies and plans to gamble more on big upcoming games.
Chen, who started betting on sports that also include NBA games four years ago, said that during the previous World Cup in South Africa he bet 115,000 yuan ($18,500) in a single day on three different games—a huge sum for the average Chinese—and lost about half of it.
“My friend helped me with betting on games through the Internet,” said Chen. “I’ll call my friend and transfer money to him and he would help me to deal with the rest.”
Chen, who lives in the southern city of Shenzhen, next to Hong Kong, would only give his surname because he didn’t want to get in trouble with authorities for betting illegally.
Demand for bets from Asian sports enthusiasts illustrates how the World Cup is also a huge bonanza for betting companies while focusing attention on the surge in illegal wagering in East Asia, where there are few legal options to accommodate the lucrative market.
“It is the biggest single gambling event of the decade and each World Cup gets bigger,” said Warwick Bartlett, CEO of Global Betting & Gaming Consultants, based on the Isle of Man. However, “the propensity to gamble in Asia is stronger than anywhere else on the planet, yet there are few legalized gambling opportunities.”
Government monopoly operators offer legal sports betting in a handful of Asian jurisdictions, including mainland China, Hong Kong, Macau, Singapore, South Korea, Japan and Taiwan. The Philippines’ Cagayan province is home to 68 online gambling companies. It’s banned outright in many other countries, including India, Indonesia and Thailand. But thousands more illegal online bookmaking outfits, which don’t pay tax, are thriving because they offer better prices, odds, wider variety of bet types and credit. Asia accounts for just over half of the illegal bets placed worldwide, according to a recent report by a sports monitoring group.
The Hong Kong Jockey Club, the world’s second biggest betting operator, reported that betting turnover during the 2010 World Cup fell 1.6 percent compared with the 2006 event, which it blamed on growing use of illegal bookies.
Police forces in Asia are cracking down, swooping on a number of gambling rings in recent weeks. In May, Singapore police arrested 18 people suspected to be involved in an illegal football betting ring. They seized 1.4 million Singapore dollars ($1.1 million) in cash and uncovered records that showed the suspects received S$8 million ($6.3 million) in illegal bets in the prior two weeks.
Hong Kong police raided several gambling operations at the start of the tournament, including a cross-border operation with counterparts in mainland China to break up what they said was the city’s biggest ever gambling syndicate, arresting 29 people and seizing slips for about $100 million in bets on football and horse racing. Even Hong Kong’s prisons are tightening up prevention measures during the tournament by stepping up surprise inspections and cutting out any information on odds from newspapers and magazines given to prisoners.
In Thailand, where a business group estimates Thais will spend 43 billion baht ($1.3 billion) on illegal gambling during the World Cup, police have set up a gambling “suppression center” and arrested dozens of gamblers and bookmakers, according to a local news report.
The busts represent a fraction of the total. Wagers made outside licensed, regulated channels account for 80 percent of the 200 billion to 500 billion euros ($271 billion to $678 billion) bet globally on sports per year, according to a report released in May by the Qatar-based International Center for Sport Security.
It estimated that black market wagering is used to launder more than $140 billion in dirty money every year.
“Organized crime has moved into football because they have seen that this is a much easier way to make money than the traditional ways of racketeering, prostitution, drugs,” said Patrick Jay, director of trading at the Hong Kong Jockey Club. “They do this either by means of bookmaking … or they do it through the means of actually arranging results of football matches, what’s known as fixing football matches.”
Football match fixing has emerged as a major concern after the European Union’s police agency said last year that a review found nearly 700 suspicious matches around the world as well as evidence that a Singapore-based crime syndicate was involved in some of the rigging. Three books have also been recently released on the subject, including one by Wilson Raj Perumal, a Singaporean with ties to Asian and Eastern European gambling syndicates who was jailed in Finland for match-fixing.
However, Jay said chances are slim of a World Cup game being fixed because fixers target games with low media and fan interest involving poorly paid players. He added that if fixers do try to target a game during the tournament, it would be one in which the result is not very important to either side.
“There’s no doubt the match fixers will look at those games. However, FIFA, EUFA and Interpol are all over this now. FIFA and Interpol are in the dressing rooms, they’re in the stadiums, their security people are in the hotels, they’re liaising with bookmakers, sports governing bodies, sponsors, security people,” he said.
Associated Press researcher Fu Ting in Shanghai contributed to this report.