BET Warns Illegal Betting Exchanges Fund Asian Crime Gangs

Monday, September 11th, 2017 | Written by April Bergman
BET Warns Illegal Betting Exchanges Fund Asian Crime Gangs

Australia’s Black Economy Taskforce (BET) warned that illegal betting exchanges which serve Aussies are connected to Asian organized crime. The BET gave Australian law enforcement agencies the legal justification to crack down on illegal sports betting exchanges.

Ten different illegal betting exchanges which generate an estimated $805 million each year were identified with Asian crime gangs. Those 10 exchanges funnel their money into a single exchange.

Those exchanges are linked to Australian and international crime rings. Though they comprise other nationalities, most of the criminal groups are described broadly as Asian. BET Chairman Michael Andrew cited 147 sources which helped his group reach its conclusions. While Michael Andrew did not give full details, he said that some of those submissions came from racing industry insiders.

Black Economy Taskforce Probe into Asian Crime Gangs

Michael Andrew told the Sydney Morning Herald in an exclusive interview, “We have for several months been gathering information on these agents and punters but welcome any more intelligence from the community.”

The article revealed a number of key facts about the illegal gambling exchanges, including how they launder money to transform dirty money into clean money. The BET report also suggested that the illegal operators charge exceptionally low fees on their exchanges, usually around 1% to 2% (instead of the usual 15%). In this way, it is hard for legal Australian sports betting operations to compete.

The legal operations have reinforcements on the way. The Black Economy Taskforce plans to release a full report in October on the links between illegal betting exchanges and the Asian crime world.

Harsh Penalties for IGA Act Perpetrators

The BET also warned operators they face harsh penalties under the newly-passed Internet Gambling Amendment Act, which was passed by the Australian Senate in early August. When it goes into effect, Australia’s law enforcement agencies will have more leverage in punishing illegal operators.

A key tool for enforcing compliance is the imposition of tax liabilities on participants and agents for the illegal betting exchanges. It sounds like the BET will instruct Australian law enforcement to fine players and affiliates who operate in the Australian black economy. If so, it would be the first time Australian punters have faced consequences for breaking the law. Of course, tax liability is a different matter than fines and seizures — such economic measures would involve players’ winnings on sports betting exchanges.

Large Competitive Disadvantage

Michael Andrew sounds serious about the coming new era of illegal gambling enforcement in Australia. Mr. Andrew said in the Morning Herald’s interview, “Illegal gambling undermines the integrity of our racing and sports entertainment industries. It makes no economic contribution to social infrastructure, state taxation nor to the cost of the racing product. It puts legal betting operators at a large competitive disadvantage especially with high volume professional punters.”

Protecting Domestic Gambling Operators

Critics of the new program will say that Michael Andrew and Australian officials are forcing Aussie punters to play at domestic gaming operators who charge exorbitant 15% fees. In such a case, players find the offshore operators to offer a better product, even if some are not as trustworthy or reliable. To players charged 15% on each sporting event instead of 1%, the complaint they might be contributing to organized crime falls on deaf ears.

That has been the general outcry about the Internet Gambling Amendment 2016. Players say the IGA 2016 is a protectionist law which helps the executives and shareholders of Australia’s gaming monopolies and duopolies, but few other people. Because foreign gaming companies offer better deals, many players see the domestic Australian operators as far more predatory than the unlicensed offshore operators.

Michael Andrew Urges Compliance

Despite that, the BET is urging businesses, professional gaming organizations, and religious groups to find new ways to punish and marginalize the illegal betting operations. The suggestion that the betting exchanges are tied to Asian crime gangs might drive away some players, while energizing efforts by third parties to stop the illegal gambling economy. How such groups might help to stop illegal gambling activities is another question, outside of informing on fellow citizens.