With the FIFA World Cup beginning on June 14, authorities in Asia are cracking down on illegal gambling. This is one of the world’s most popular sports events and it only comes around every four years, so there will be huge sums gambled on it, both legally and illegally, throughout the tournament.
Why the crackdown?
A huge amount of money is illegally gambled every year in underground poker games, unlicensed casinos, and sports betting brackets. There are many ways in which the operators of these illegal enterprises evade the authorities.
This means that significant funds are being directed into the black economy and the authorities cannot obtain tax revenue from these wagers. There is also the issue of consumer protection, along with the fact that the proceeds of this gambling often goes toward other, more serious criminal activities.
This year’s World Cup tournament in Russia is expected to generate much more gambling revenue in Asia than the previous edition in 2014, which was held in Brazil.
This is because the Russian time zones are a lot closer to those in Asia. According to the Asian Racing Federation and Transparency International, Asia makes up about 80% of the total illegal gambling revenue globally, with the total market worth around $500bn (£374bn) annually.
The current problem
Numerous countries in Asia have announced they are cracking down on illegal gambling ahead of the World Cup. The operators of these illegal enterprises are always trying to stay one step ahead of the authorities, constantly changing their approach and utilizing the latest technology, such as cryptocurrencies, in order to mask their activities.
Football is very popular in countries like Malaysia and Thailand. As there are no avenues for residents of those countries to bet legally on the World Cup, they turn to illegal gambling operations.
Although gambling is legal in some places, such as Hong Kong and South Korea, the market for illegal gambling is much greater in these places than the legal alternatives.
The reason for this is the more expansive offering provided by illegal operators. As they mainly operate these days through mobile and online platforms, it is much more difficult for the authorities to track down their operations and monitor their activities.
Popular messaging app WeChat, for example, is widely used to place bets illegally. Cryptocurrencies and online payment providers make it a lot easier for these operators to deal with illegal bets because it is a lot harder to track these transactions than with traditional banking systems.
A significant portion of these illegal gambling operations claims to be licensed in the Philippines. Previously, it had been very easy to purchase a license there. However, the authorities in the Philippines have now distanced themselves from this process, saying: “The State condemns the existence of illegal gambling activities as a widespread social menace and source of corruption.”
The authority’s plans
The South Korean police are planning to monitor illegal sports gambling closely throughout the World Cup. Police in Hong Kong have labeled similar efforts as “Operation Crowbreak.”
The authorities in China have already begun breaking up illegal betting rings, with a major online operation being shut down in April, which led to the arrest of over 100 people. The police in Macau have shut down numerous illegal operations that were using WeChat to facilitate bets.
In 2014, there was a similar crackdown by the authorities during the World Cup, with illegal gambling rings that handled approximately $2.2bn (£1.65bn) in bets being taken down.
Macau is the world’s leading center for gambling, but there were numerous illegal operations broken up during the 2014 World Cup. In one of these operations, the authorities found a slip where a single bettor had placed a $5m (£3.73m) bet on the outcome of a match.
There is a clear theme for major crackdown operations being centered on major football tournaments. In the summer of 2016, during the European Championships, there was a crackdown across Asia in which over 4,100 people were arrested and $13.6m (£10m) was seized.
This came after almost 4,000 illegal dens had been raided. Many of those raided were also involved in numerous types of online scams and other criminal activities.
Jim Anderson, the head of anti-corruption and financial crimes at Interpol said: “Illegal gambling generates massive profits for organized crime networks which are often linked to corruption, human trafficking, and money laundering.”