Earlier this month, when Chinese and Hong Kong police moved against a cross-border betting ring believed responsible for as much as HK$500 million (US$64.5 million) in illegal football wagering a day they had only scratched the surface of an Internet black market that generates 1,000 times that in annual turnover.
The International Centre for Sport Security, a non-profit monitoring group headquartered in Doha, estimates between US$260 billion and $660 billion is wagered worldwide on sports each year, 90 percent of it on football, 80 percent of it outside of licensed, regulated channels, and most of the illicit trade flows through East Asia, which Interpol, Europol, the bodies that govern international football and groups such as the ICSS identify as the financial hub of the worldwide match-fixing epidemic and the nexus of a host of other criminal activities.
“Hong Kong provides a huge market for these overseas-based websites, mostly operated out of the Philippines, Singapore, Indonesia and Malaysia,” a local investigator said in a June report in the South China Morning Post, “and increasingly we are seeing major players, some of whom are involved in the Macau casino junket business, getting involved because they see the massive potential to make money with relatively little outlay.”
If the HK$386 million in football receipts seized in Hong Kong in 2010 is any indication, the 2014 World Cup will enrich them to a greater degree than ever.
“The police do the best they can, but what does HK$386 million represent when we are looking at a turnover of HK$500 billion? It’s a very small drop in a very, very big ocean,” said Jay Parker, director of trading for the Hong Kong Jockey Club.
The scandal broke on the eve of the trial of 19 suspects charged in a US$78 billion online gambling syndicate based in Macau’s neighboring Guangdong province.
The crackdown has since gone national, with the Public Security Bureau, the country’s central police force, issuing a statement through state-run media last month calling on all local police jurisdictions and government departments to coordinate their investigations.
In Thailand, where Buddhist norms dictate the prohibition of all forms of gambling except horseracing and lottery, this underground is massive and flourishing, often with the connivance of the police and government officials.
Nationally, about 80 percent of bets are handled through networks of agents and sub-agents for Philippines-based bookmakers. Four major entities control most of the action, according to a researcher with the Faculty of Economics at Dhurakij Pundit University in Bangkok, who told the English-language Bangkok Post that leading second-tier operatives often handle wagers exceeding 80 million baht ($2.4 million) a month.
The size of operations such as this was evidenced recently in nearby Vietnam, where a sizable internet betting market has grown up in the shadows of Thai-style bans on nearly all forms of gambling. Recently, dozens of suspects were charged in connection with the highly publicized breakup of M88.com—a long-running online syndicate through which hundreds of millions of dollars are believed to have flowed. M88 moved bets and payouts between gamblers and agents through some 12,000 locally registered bank accounts. Former executives of Vietnam International Bank and telecom operator News Plus have been implicated.
“The timing of the charges was no doubt intended to remind other would-be sports betting entrepreneurs that handling wagers on this month’s FIFA World Cup is not without its potential downside,” said Philippines-based news site CalvinAyre.com.
The political unrest in Thailand may have compounded the problems authorities face with the start of the World Cup this week. Reports are that Thais have been reluctant since the military coup to cross into Cambodia to feed their passion in the dozens of small casinos along the border where they contribute more than 90 percent of revenues. Operators in the border town of Poipet say the number of Thai patrons has dropped by almost half since the May coup, an observation borne out by statistics from the international checkpoint there, which show the number of people passing through declining from an average of about 1,500 a day to about 700.
Concerns that a lot of this money will wash into illegal channels back home prompted the new military government to resort to national television to publicly instruct the army and police to be on the lookout for bookmakers.
Viewed against that “very big ocean” the Hong Kong Jockey Club’s Jay Parker speaks of, these were only more ripples. The University of the Thai Chamber of Commerce forecasts that Thais will bet 70 billion baht (US$2.1 billion) on the World Cup, 16 percent more than was bet on the 2010 tournament. Most of it—an estimated $1.3 billion—will flow underground.
One top police officer, a colonel who serves as a superintendent of the government’s High-Tech Crime Unit, likened the possibility of staunching the flow to trying to hold back the tide.
The colonel went so far as to question the continuing wisdom of prohibition. Complaining that Thailand is “stuck in the mindset that gambling is a vice under Buddhism,” he suggested that maybe it’s time to “look around and accept that the world has changed”.