Betting can be used both for the generation of illegal proceeds from game fixing and for pure money laundering purposes.
The OECD Financial Action Task force today released a report (available to download from this site) which explores money laundering in football.
In this extract, the relationship between betting and sport is explored
"There is an ambiguous relationship between betting and sport. On the one hand, betting has historically been an important revenue source for sport in many countries. On the other hand, betting has also been associated with attempts to fix matches and alter the results of sporting competitions.
"The FIFA Task Force “for the Good of the Game” has observed that “due to its particular structure, as well as the considerable need to finance the system at short notice, football offers a tempting platform for irregular betting activities. As the media and the public eye focus on fixtures in top competitions and top leagues, irregular betting activities can frequently be observed in less important fixtures (including lower divisions of domestic championships), where the environment can be manipulated more easily. Recent scandals in which betting has resulted in the manipulation of matches have brought the game into serious disrepute”.
"While problems linked to betting are not new, it appears that betting in sport has reached new levels of sophistication with various operators involved across several countries and continents and new offshore betting companies being established. Moreover, the use of the Internet for online betting further increases the risk of money laundering.
SOGA I and II
Illegal soccer gambling is a serious problem in Asia. A recent Interpol operation, SOGA II, provides an idea of the scale of illegal soccer gambling in that region. Interpol announced that 1 300 people were arrested on the suspect of illegal soccer gambling and USD 16 million in cash were found during the operation (Interpol, 2008). 1 088 gambling dens were identified of which most were associated with organised crime. It is estimated that these dens handled bets which were worth nearly USD 1.5 billion. This is however not the first time Interpol has taken action in this area. In 2007 SOGA I resulted in 400 arrests, 272 illegal gambling dens and confiscation of USD 680 million worth of bets (Interpol, 2008). It is of course not said that the gambling sites are only used for money laundering. However, illegal soccer gambling is according to Interpol often related to money laundering.
Source: Interpol.
"UEFA has called on the police organisation Europol to investigate possible match-fixing by Asian betting syndicates in top-flight European football. Meanwhile, Europol has recognised the danger emanating from corruption in sports. “The phenomenon of game fixing in organised sport is one of the areas that Europol has on the radar as a crime on the increase”.
"However, illegal football gambling does not necessarily only involve Asian criminals. On the contrary, most of the Asian bookmakers are professional and well organised companies with a lot of expertise in the field. They do not deal with the gamblers directly, but only by means of a network of intermediaries. In other words, they do not know the individuals or organisations that are placing the bets.
"The problem is often situated elsewhere. International organisations or syndicates in Europe, for example, are trying to secure their investments in the Asian betting market by manipulating games through clubs players or referees. Other parts of the world are also associated with match-fixing gambling scams.
"According to UEFA, there is an international network of organised crime behind certain European matches believed to have been fixed for betting reasons. Money traded on a single website can surpass EUR 100 000 for a third division football match. The UEFA however reports even higher stakes of EUR 1 million to EUR 2 million per match and stakes that can even increase for large tournaments
"Due to the fact that most countries have different gambling regulations, the gambling market isnon-transparent and is a heterogeneous market with a mix of private and state companies acting both nationally and internationally. Providers are often established in countries which allow the organisation of gambling activities or in countries that do not regulate or supervise gambling. It is however not easy to take legal action against providers who offer their services online and are established abroad. This in combination with the non-transparency of the gambling market makes betting an interesting money laundering vehicle for criminals."
To read the entire report please go to the Financial Action Task Force website