Illegal betting markets launder £83bn a year, reveals report







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Illegal betting markets launder £83bn a year, reveals report

21/04/2014

Owen Gibson

• Study calls for sports betting tax to finance investigations
• Governments advised to beef up regulation of bookmakers

A new study revealing that $140bn (£83bn) in illicit funds are laundered through illegal betting markets annually has prompted renewed calls for governments to step up their efforts to tackle the problem, and associated match-fixing issues.

A two-year study by the Paris-Sorbonne University and the International Centre for Sport Security estimated the overall size of the market at between $200bn and $500bn, more than 80% of which is wagered on illegal markets.

But while the illegal markets in Asia and the Far East are regularly blamed for allowing corruption to flourish, with new high-profile fixing cases in football, cricket and other sports emerging on a regular basis, the report also highlighted the influence of the lightly-regulated "grey" market.

Thousands of bookmakers are based in jurisdictions where betting is legal but regulation is so light that the owners of the companies are able to remain anonymous.

Of the 8,000-plus operators that offer legal sports betting services around the world, more than 80% are based in lightly-regulated markets. The report found that the number of illegal operators was "impossible to even estimate".

The report was published as it emerged the International Cricket Council's anti-corruption unit was assessing evidence of widespread fixing obtained from the former New Zealand Test batsman Lou Vincent, which is believed to include allegations relating to matches in the English domestic Twenty20 Cup and Pro40 competition.

Chris Eaton, the former Fifa head of security who is now director of integrity at the Qatar-funded ICSS, said that the report's findings were the first step in understanding the relationship between the huge unregulated bookmakers, betting fraud and the gangs of matchfixers in eastern Europe and Asia that have preyed on a range of sports in recent years.

"It shows that we've been attacking the wrong end of the problem in focusing on matchfixing and the actions of players, administrators and umpires," said Eaton. "We must also tackle the unregulated betting market, which is so vulnerable to betting fraud. That is a government responsibility, not a sport responsibility. Governments are very adept at making match fixing a sports matter."

Eaton called for more co-operation between governments and for organisations such as Unesco to take a lead in coordinating international action. He said an operation similar to the concerted clampdown on money laundering through the international banking system in the 1990s was required.

The report calls for more cooperation between government, sports governing bodies and the legal bookmaking industry to attack the problem from both ends. Among its recommendations are the creation of a sports betting tax to finance investigations into match-fixing and illegal betting, a move that would go down badly with the betting industry.

It also calls for an integrity risk assessment and management system for sports organisations and an outright ban on players, coaches and administrators betting on competitions and matches in their sport.

In the wake of an outbreak of alleged matchfixing in the Football League and English non-league football, the FA is considering plans to extend its rules prohibiting players from gambling on competitions in which they have an interest to an outright ban on all betting.

The report also calls for more effective regulation, including the establishment of an international blacklist of illegal operators agreed across boards, and greater sharing of intelligence between nations and sports. It said an international agreement on the manipulation of sport competition was an "urgent necessity".

Eaton also called for a shift in the approach to tackling match fixing. Wilson Raj Perumal, a notorious Singaporean football matchfixer who helped police in Finland establish the extent of his reach and influence, recently wrote a memoir in which he detailed the extent of his activities – from fixing international friendlies to corrupting entire leagues. But he remains one of very few serious matchfixers who has been caught.

"The investigation needs to be preventative rather than prosecution-based. You need to disrupt them and destroy their access to markets," said Eaton. "You may now only be seeing the capture of the incredibly stupid criminal. That doesn't mean there are not incredibly smart ones operating too, they just haven't been caught yet."

Mohammed Hanzab, the Qatari chair of the ICSS, said the two-year study was "a real milestone". "We call on governments to act, and act now. We owe it to everyone across the globe, everyone who expects to watch and enjoy a fair contest," he said.

Eaton defended the fact that his not-for-profit organisation was funded by the Qatari government, under fire for the controversial way it secured the 2022 World Cup and the treatment of migrant workers building the infrastructure for it. He said the Qataris had never threatened his independence and that every nation that had ambitions to host major sporting events should be taking the issues of corrupt betting and match fixing as seriously as it was.