Illegal gambling markets discussed at 36th Asian Racing Conference
The rising tide of illegal gambling was the topic of the eighth business session for the 36th Asian Racing Conference in Mumbai on Thursday. Greg Purcell, Chief Executive Officer, New Zealand Thoroughbred Racing, served as chairman for the session. “There is a saying that ‘where there is money there is corruption,’ and this is true in all walks of life and across all commercial environments,” said Mr. Purcell. “While legitimate legal wagering operators work within the laws and confirm with prohibitions and restrictions set out by regulators, not to mention paying fees to the sports on which they wager, illegal operators don’t.”
Comparatively, Mr. Purcell continued, “the illegal, unlicensed and unregulated gambling operators exploit markets where there is an absence of a legal wagering framework, work outside jurisdictional laws to meet unsatisfied demand, don’t pay fees to the sports on which they take bets and fall outside most of our current integrity systems.”
Martin Purbrick, the Hong Kong Jockey Club’s Director of Security and Integrity briefed delegates on the growth of illegal betting in Asia, and the expanding reach of those operators beyond the region, serving as a driver for a host of criminal enterprises.
“In just the past month, we heard of massive match-fixing syndicates in tennis, an international cricketer from South Africa charged in similar scandals, and that half the Canadian Soccer League’s matches this season have signs of suspicious betting activity,” said Mr. Purbrick.
Estimating global betting revenue is US$716 billion of which $500 billion is estimated to be illegal, Mr. Purbrick noted that Asia is clearly the driver for all channels. “The global illegal betting market is likely to be as big as US$500 billion in transactions, with Asia as the driver. The world’s largest legal and illegal betting outlets worldwide are headquartered in Asia, and they are likely responsible for 70 to 80 percent of that illegal market.”
With a series of customer friendly, mobile and responsive displays using convenient online payment methods, circumventing banks, “a full suite betting website can be established for roughly $140,000, and the Philippines leads the way in these offerings,” added Mr. Purbrick.
To understand the scope of the illegal influence, Mr. Purbrick cited findings that indicate one illegal site is estimated to handle the equivalent of eight percent of the turnover of the Australian horse racing betting market, while estimating their total turnover on Hong Kong racing was equivalent to nearly 57 percent of the legal market.
“The growth of illegal betting in Asia has led to global expansion of the operators, the consequent spread of criminal involvement in racing and other sports betting markets, as well as being a driver for other criminal problems such as sports corruption and money laundering.”
Rupert Bolingbroke, Head of Trading for the Hong Kong Jockey Club, provided insight to the customer targets of illegal gambling sites and identified key areas required to combat their influence.
“There are at least 2,500 illegal bookmaking websites in Asia, of which 20 to 30 are major players. While they have a huge existing client base, there is an increasing focus on youth gamblers,” said Mr. Bolingbroke. “We must collect data to aid policy makers’ understanding of the overwhelming influence and reach they have, while informing the public that the illegal operators are using match fixing for profitable gains.” But realistically, Mr. Bolingbroke added, the situation requires as much direct attention from the legal operators as possible.
“At the end of the day, we must improve our product to compete with the illegal market. That means improving our technology, our mobile reach and our customer service so as to change our customers’ criteria of purchasing,” Mr. Bolingbroke added.
“Even worse, many of these illegal operators are also specifically targeting youth, teenage gamblers, through virtual gaming and a series of token-based games,” said Mr. Bolingbroke. Focusing specifically on the impact in Hong Kong, he added that a single 12-month period yielded more than seven million unique page views from Hong Kong to betting websites which are not legally accessible by those residing there. “These operators get larger and larger every year.”
Neil Paterson, Assistant Commissioner, Intelligence and Covert Support Command, Victoria Police discussed law enforcement’s approach to illegal gambling, and its ties to organized crime. “Illegal gambling is the perfect operating environment for organized crime and illegal gambling goes hand in hand with match fixing,” said Mr. Paterson. “Whilst traditionally organized crime has targeted illicit markets for revenues, they are more and more corrupting licit markets. Where there is big money to be made, you will find organized crime. The size of the illegal markets are so large, the exact numbers are almost irrelevant,” added Mr. Paterson.
Tim Moore-Barton, Chief Executive Officer, Betfair Australia discussed the legal operator viewpoints and agreed with quantification of the issue from his fellow presenters. “Evidence has clearly shown that Australian law cannot be enforced on [illegal operators] outside Australia. Betfair is strictly regulated, and subject to direct supervision. Licensed bookmakers have a symbiotic relationship to racing,” Mr. Moore-Barton said. “Illegal operators are getting a free ride and taking billions of dollars away from our industry. One country race from New South Wales saw volume ten times larger than our legal exchange, the world’s largest. These operators are the biggest single risk to racing worldwide.”