Authorities across the Asian continent are gearing up to police illegal World Cup betting, which begins next week. Those same officials say illegal sports betting syndicates also are preparing to handle a huge volume of sports wagers, because the World Cup always is a four-year high for betting turnover on sporting events.
It hardly matters whether sportsbooks are legal or not in an Asian country, illegal sports bets are a major part of the gaming scene. In countries like Malaysia and Thailand, where sports betting is banned, fans flock to illegal gaming operators to place their World Cup bets.
Even in jurisdictions like South Korea and Hong Kong, though, where registered sportsbooks exist, illegal bookmakers take a huge volume of sports bets. In fact, the illegal sports gambling has a far larger turnover than the registers bookmaker operations.
The fact is, bookies are easier to find and closer to home. And if the sports bettor wins, they do not have to pay taxes on their winning.
Punishment for Illegal Gambling
In Asia, though, those who get caught betting illegally can face stiff sentences. In North America and Europe, sports bettors do not face punishment if they are caught at an illegal betting operator. They might have their funds confiscated, but it is the operator who is punished.
In China, Vietnam, India, and other Asian countries, authorities punish both the gamblers and the gaming operators — at least when they are citizens of the country. Thus, the stakes are high.
Chinese Illegal Gaming Operators
Hong Kong and Macau officials say that illegal sports betting rings often use WeChat, China’s equivalent to Facebook, to arrange sports bets. In the east as in the west, local illegal bookmakers now place wagers through online sportsbooks to hide the activity from police investigators.
Bitcoin and other crypto-currencies make it harder to track online transactions, too. The Hong Kong Jockey Club, which oversees European football betting and horse racing, says that Bitcoin and other blockchain payment methods have increased the difficulty in tracking illegal sports wagering. Interpol says the same thing.
Much of the wagering is done through illegal offshore gaming sites in the Philippines. For the first time, though, Philippine authorities might take measures to crack down on illegal World Cup football betting. PACGOR, the Philippine gaming regulator, began a general crackdown on illegal gambling in 2016.
Alfredo Lim, president of PACGOR, said the government is motivated to find and stop illegal sports betting. Lim said, “We lose millions [in tax revenues] from unlawful gambling.”
Asian World Cup Betting Estimates
Martin Purbrick, the director of the Hong Kong Jockey Club, said, “There is a need to develop and execute a sustainable enforcement strategy for a lasting impact against illegal betting and related transnational organized crime.”
The Jockey Club released estimates for the volume of World Cup sports betting in each country. Purbrick says Hong Kong will see $68 billion or more in World Cup turnover. The whole of South Korea will have even more: an estimated $79 billion. The city-state of Singapore should have around $6.5 billion in World Cup betting action, according to the Jockey Club.
Hong Kong’s government regulates and taxes gambling revenue, which accounts for about 5% of the city’s tax revenue. Thus, illegal sports betting represents a drain of tax revenue for Hong Kong. The Jockey Club estimates Hong Kong will lose as much as US$1.7 billion in tax revenue, due to illegal sports bets placed on the 2018 World Cup.
Hong Kong Bookies’ Take
Martin Purbrick believes Hong Kong illegal bookmakers will take home about $750 million in winnings during the month-long World Cup. Readers might wonder how $68 billion can be wagered and only $750 million is collected in winnings. Turnover or “action” indicates the amount wagered on a sports bet, while the winnings are the total the bookmaker wins from the players — a much smaller percentage of the turnover.
In 2014, Hong Kong authorities launched “Operation: Crowbreak“, a large-scale anti-gambling crackdown. Crowbreak II anticipates the large volume of World Cup wagers and wants to flush out illegal operators while they are busy.
Mainland China launched anti-gambling raids in March, in which they collected 100 illegal gaming operators. Macau plans similar raids. In 2014, Asian gaming regulators and law enforcement agencies conducted a 6-week gambling crackdown in anticipation of the 2014 World Cup. The raids were conducted in mainland China, Hong Kong, Macau, as well as Malaysia, Singapore, and Vietnam. Authorities estimate they busted $2.2 billion of illegal sports betting. Those same authorities plan to break that record in 2018.