500 BILLION DOLLAR industry
Betting and sports have been bedfellows for centuries. But the relations between the two have been deteriorating. The biggest setback has come from the rise of illegal betting. The industry has grown not just in terms of revenue, but also in its reach, and there are now fears over its influence on the outcome of sporting events. The allegations of match-fixing across various sports have once again got sporting bodies and lawmakers across the globe worried and they are trying to find ways to counter the sector’s growing might. In this article we will cover some of the main aspects of this huge illegal betting industry that is worth well over 500 BILLION dollars and we will present you some interesting statistics regarding this topic.
It’s massive. In fact it is huge. According to some estimates, the industry could be worth as much as $500b per year. To put that in context, it is more than 50 times the annual profit of Toyota, the world’s biggest carmaker. Most people believe that a huge part of those betting revenues are generated in Asia. However, because much of the industry is illegal, and there are no official transaction records, it is difficult to give an accurate estimate of its total size.
For example, Nevada’s Gaming Control board reported a record $4.8 billion bet at its sports books in 2017, with the house keeping $248.7 million in revenue. But legal betting is just the tip of the iceberg, and nobody really knows how much money is bet illicitly. A 1999 study commissioned by Congress put the range at $80 billion to $380 billion annually. Research firm Eilers & Krejcik Gaming puts the number at $50 billion to $60 billion and estimates that bookies keep up to $3 billion of that.
There are various reasons behind it. But in most cases it is a combination of factors that attracts the gamblers. In some countries, the most basic reason is a ban on sports betting. Meanwhile, in others some of the illegal betting syndicates offer better odds for a sporting event, making the payout in case of a winning bet, more attractive. In some cases social stigma also plays a role, especially in countries where online betting is barred.
If a gambler wants to place a bet through the legal channels in those countries, then he or she would need to go a physical location. In doing so, there is always a chance of the gambler being noticed by someone who they may not want to know about their gambling habit. On the other hand, most illegal syndicates operate in a very discreet manner, not least to protect their own identities. And once a mutual trust has been established, many syndicates even agree to take bets over the phone and then collect or deliver the cash later on.
There are many and at various different levels. To begin with, it is against the law. At the same time, all the transactions are unaccounted for and cost the government’s hundreds of millions of dollars in lost tax revenue. They also hurt revenues and profits of legal bookmakers, as better odds attract gamblers away from them.
But perhaps, the biggest concern that has emerged in recent years has been that illegal betting syndicates are increasingly indulging in ‘match-fixing’ to influence the result of a sporting event.
The fear is that these syndicates use financial rewards as a means to get players, or in some cases even teams and officials, to play in a such a way that they achieve a pre-determined result.
The bookmakers, having prior knowledge of the final outcome, can then influence the odds in a way that it nets them maximum profit.
“It is the equivalent of having insider information,” says James M Dorsey, a scholar at S. Rajaratnam School of International Studies in Singapore.
“If you already know what the outcome of match is going to be, it becomes a different ball game altogether.”
Not only is this illegal, but also against the very spirit of playing sports. These fears have been fanned further after Europol alleged that 680 football matches played around the world have been fixed by criminal networks. It said that some 425 match officials, players and criminals were suspected of being involved in the fixing.
Over the past years, there have also been allegations of match-fixing in sports such as cricket.
The fear is that if not controlled, illegal betting and subsequent match-fixing may do irreparable damage to various sports.
One of the biggest ones is that there are no records of any transaction taking place. It is all based on mutual trust. Though most bookies do end up giving the payouts — they have to do so to remain in business — but there is always the chance of someone refusing to pay up if a bet goes drastically wrong.
There is no channel of appeal for a gambler who has lost the money as the bookie is their only contact and they cannot go to the police for obvious reasons. At the same time, there is always the risk of becoming too greedy, especially if one is placing a bet over the phone. A gambler may bite the bullet and place a bet well beyond their means in the hope of winning. But if the outcome goes against them, the pressure from the bookies to pay up can be relentless and in some cases extreme.
Finally, given the spread of match-fixing, the gamblers never know if they are being enticed into a making a bet, the outcome of which has already been decided to be against them.
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