Illegal Sports Betting Surges in Asia Ahead of 2018 World CupJune 12, 2018 4:07 pm
On Thursday, the 2018 FIFA World Cup kicks-off in Russia, with more than three billion people expected to tune in and watch the much anticipated sporting extravaganza. Naturally, sports betting firms are anticipating a bumper summer, and during the competition’s run billions of dollars will be wagered on the 32 teams, as well as the 64 individual matches that will take place from now until its grand final on Sunday, July 15th.
Illegal Sports Betting
The FIFA World Cup takes place once every four years, providing a lucrative opportunity for bookmakers to profit from the surge in betting activity that accompanies this month long festival showcasing the world’s best soccer teams. Nevertheless, sports books operating in country’s with legalized industries are invariably concerned that they may lose custom to illegal sports betting websites, who do not hold expensive licenses and so are able to pass on cost savings to their customers in the form of preferential odds.
These illegal operators are able to further profit by offering their products in countries where sports betting is officially banned. In the USA, for instance, it is estimated that around $150 billion is bet on sports each year, of which 97% is placed via illegal channels. This then results in millions of dollars in lost gaming taxes for government coffers, and ultimately proved a key factor in helping the Supreme Court to strike down the federal sports betting ban in the country last month.
Asia’s Thriving Market
Asia may also be gearing up for the World Cup, but many countries across the world’s most populated continent (4.4 billion) do not actually offer legal sports betting options, including China with a population of 1.4 billion people. All the same, soccer commands a strong following in numerous Asian countries, such as Malaysia and Thailand, and in order to satisfy demand illegal sports betting operators have been employing various methods to circumvent local bans, including the use of sophisticated technology and promoting cryptocurrencies as a means of payment.
Even in countries where sports betting is permitted, such as Hong Kong and South Korea, unlicensed operators have not been deterred from targeting local residents, or attracting them by offering better odds, or the possibility of avoiding paying any local gambling taxes.
Highlighting the extent of the problem, The Hong Kong Jockey Club, which offers sports betting services as well as horse racing in the region, recently released its estimates for 2018. According to the fully licensed operator, Hong Kong will see a staggering $68 billion placed on illegal sports wagers this year, while South Korea’s illegal market will reach $79 billion, and that of Singapore $6.5 billion.
Commenting on the situation, Martin Purbrick, the Hong Kong Jockey Club’s security and integrity chief, highlighted the devastating effect illegal sports betting is having on Special Administrative Region‘s racing industry, although his remarks can equally apply to the sports industry as a whole. As he then explains:
“There is a need to develop and execute a sustainable enforcement strategy for a lasting impact against illegal betting and related transnational organized crime.. There is a huge problem of criminality using betting, racing and sports for profit. If we in racing don’t influence government to regulate it, to more effectively combat the problem, it could kill the sport.”
Asian Authority Actions
According to ‘Transparency International’ and the ‘Asian Racing Federation’, the illegal worldwide sports wagering industry is worth roughly $500 billion per year, of which Asia accounts for 80% of all betting volume. In order to stem this massive influx of money out of their countries, authorities in the past have targeted illegal operations in an attempt to send a stern message to would be transgressors.
During the 2014 FIFA World Cup, for instance, authorities across China, Singapore, Vietnam and Malaysia carried out a six week operation against firms who had processed a staggering $2.2 billion in illegal bets. The clampdown then led to numerous arrests and the shutting down of multiple websites.
In April of 2018, Chinese police subsequently smashed an illegal online gambling ring, resulting in the arrest of more than 100 people, but nonetheless, Macau, the world‘s largest gambling destination, is still expecting to see a marked dropped in its revenues this June as Chinese gamblers wager on the World Cup.
Meanwhile, South Korea said that it would be closely monitoring illegal sports betting activity during the World Cup, while Hong Kong police have already launched an anti-illegal gambling operation called “Crowbreak”