Asia at heart of match-fixing - Ex-Fifa man
Gambling houses in Southeast Asia form the foundation for organised crime gangs to generate huge profits from sports match-fixing, according to Chris Eaton, ex-FIFA head of security and director of Qatar's International Centre for Sport Security.
European police shone a spotlight on the region on Monday when they announced a Singapore-based syndicate had directed match-fixing for at least 380 football games in Europe alone, making at least €8 million ($NZ12.8 million pounds).
The number paled in comparison to the gang's profiteering in Asia, Eaton told Reuters in a telephone interview today.
"It's infinitesimal compared to what was made in the Asian market. You can probably multiply that by a hundred," he said.
The known cases of match-fixing occurred mostly in the West, but the real profits for the syndicates were in Southeast Asia, where the size of the gambling market completely dwarfed that of Europe.
The region's lax regulation coupled with the sheer scale of the betting market made it far more attractive to people wanting to manipulate it, such as those accused of match-fixing by Europol.
Gone were the movie images of people entering smoke-filled rooms with bags of money and betting slips. Today's gambling institutions most closely resembled international finance, with its banking, derivative trading and commodities trading, according to Eaton, a former Interpol operations manager.
"It's all done with algorithms and machines, almost like any commodity house in the US or London. The three largest houses each transact $2 billion a week - a hell of a lot of money."
To put this into perspective, Eaton said this sum could purchase four international-standard hospitals or pay for a thousand police officers for a year.
Although recent match-fixing scandals have struck South Korea, China and Italy, corruption in football has long been a global problem.
Eaton believes the real facilitator of this is the opportunity it provides to commit betting fraud and the susceptibility of the Southeast Asian betting market, where most betting fraud is committed.
LACK OF WILL
"If you don't focus on betting fraud, then you won't be able to properly address sport corruption. Sport corruption is borne of betting fraud - it's a cycle" he said.
"It could just as well be betting on tiddlywinks, or on flies crawling up a wall."
Eaton said that, instead of governments and agencies targeting betting, they targeted corruption in the sport itself, which was simply a means to an end.
"There's no will to regulate gambling houses in Southeast Asia. There's a lack of commitment. Their responsibility isn't just to attract business but to properly regulate business," said Eaton.
"This is bigger than Coca-Cola, which is a trillion a year. This is a global economy, a growing global economy, and it needs to be regulated and supervised, and governments aren't doing this."
Italy was one of the major targets of the match-fixers identified by European police forces, despite having what Eaton considers to be one of the best gambling regulators in Europe.
The international nature of the betting frauds meant the Italian authorities' supervision ultimately amounted to little when deterring corruption in sport.
Eaton estimates that 30 percent of all gambling on sports in Italy goes through registered Italian bookmakers. The other 70 percent is unregistered, often channelled through Southeast Asian websites.
"If they focused on transparency in gambling houses in Southeast Asia, being able to see who did what, when and how, this alone would have a major effect on addressing the issues of sport corruption," he said.
"You have under-regulated, grey-area gambling where the regulators are not really serious, transparency rules are not to best practice and government oversight is almost non-existent."
This "grey area" gambling lies between legal betting and "black area" gambling, which Eaton identifies as illegal, cash-based betting with a trusted clientele known to the bookmakers.
The grey gambling market's lack of oversight undermined the efforts of countries such as South Korea, where 41 players from its K-League were banned for life by FIFA for match-fixing, and authorities have allied with sports agencies and police to combat the corruption.
"The grey-area betting businesses, particularly out of Manila, are the biggest concern to us. We don't know enough about them and the government has an under-regulated environment," said Eaton.
"It's almost impossible to measure how they do business and what weaknesses they have that allow organised crime to take advantage of them."
The three largest gambling houses in Asia, IBCBET, SBOBET and 188BET, are all in Manila in the Philippines. Eaton describes their operations as "very opaque" and said what was known of them came purely from talking to people familiar with their workings, as there was no government record.
Their huge profits made them ideal for exploitation by organised crime syndicates. These online businesses operated as an exchange, rather than a traditional risk-taking bookmakers which would bet against the gambler themselves.
Instead they took a commission and farmed out the bets to bookmakers around the world, seeking to make slightly more than a one percent turnover, according to Eaton.
"They're turning over so much money the organised crime is almost invisible to them," he said.
Because the bookmakers were the ones taking on the risk, there was little incentive for the Manila-based exchanges to work against match-fixing.
The match-fixers were also able to exploit the gambling house system by writing computer programs to place hundreds of bets at the house's maximum limit in a matter of seconds, mostly while the rigged matches were still being played.
Typically this occurred late in the game, to lessen the odds of alerting the gambling house to the fraud.
"These are very sophisticated frauds. They're not very easy to disguise, so the fixers have to time it in such a way as to get it past the houses," said Eaton.
Eaton believes that until governments and authorities work to close these lucrative channels of profit for organised crime, match-fixing will continue to be a global problem for all sports.