Illegal betting and organised crime in Asia

Martin Purbrick
Director of Security & Integrity, Hong Kong Jockey Club
Illegal betting and organised crime in Asia
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.
• Legal and illegal betting in Asia
• Criminal involvement in Asia betting
– Asian Illegal Bookmakers
– Asian Betting Exchanges
– Casino junkets and illegal betting
Legal and illegal betting in Asia
Illegal betting is causing sports corruption
‘Entire rogue league corrupted
by match-fixing‘
(Telegraph, 18th January 2016)
‘Cricket-Ex-South Africa international
Bodi charged in match-fixing scandal’
(Reuters, 14th January 2016)
“Almost half of First Division
matches in current Canadian
Soccer League season have
signs of suspicious betting
activity, resulting in estimated
£4.5 million in potential
fraudulent betting profits”
“Cricket South Africa said in
December investigating an
"intermediary" for betting syndicates
and had laid charges”
‘Australian Open: Tennis rocked by allegations
of widespread match fixing among top players’
(Sydney Morning Herald, 18th January 2016)
“The match fixing was orchestrated by
gambling syndicates in Russia and Italy,
targeted prominent players in their hotel
rooms at major tournaments
and offered them $US50,000 for each fix”
Legal and illegal betting in Asia
The largest illegal betting companies are from Asia
Asian
Bookmakers
Asian Betting
Exchanges
Asian Casino Junket
betting operators
Legal and illegal betting in Asia
Globally, legal and illegal betting markets are huge
Ronald Noble, Interpol
Secretary General, 2011
“When widespread, illegal and
irregular betting will create a
shadow economy possibly
enormous in size and depth. In
Asia alone, illegal betting is
estimated to provide revenues
for almost US$500 billion.”
(EUR 446 billion)
Sorbonne-ICSS, 2014
“The estimated volume of the
global market (legal and illegal)
of sporting bets is somewhere
between €200 and €500
billion, more than 80% being
illegal bets.”
Legal and illegal betting in Asia
The global illegal betting market is likely to be as big
as USD500 billion in transactions with Asia the driver
Market
Illegal Turnover
Hong Kong racing +
other sports
USD64 billion
(Football $40b, Racing $12.78b, others $12b)
Asia racing + other
sports
USD350 billion
Global racing + other
sports
USD500 billion ++
(Source: HKJC analysis)
Legal and illegal betting in Asia
Illegal betting operators have a strong online user
interface that is attractive to customers
Legal and illegal betting in Asia
Illegal betting website setup is easy and cheap.
First Cagayan in the Philippines leads the growth
Total cost of setting up a licensed betting website in the Philippines
Sports betting
website
Full-suite betting
website (e-casino +
sports betting)
License application fee
USD26,000
40,000
License annual renewal fee
USD15,000
40,000
Annual ‘Gaming Tax’
USD60,000
60,000
Legal and illegal betting in Asia
Illegal betting operators have an agent system that
facilitates customer growth
Agent system of IBCbet (Maxbet)
master agent
Credit granted
Master agent
Agent
Customers
Commission increases
Super
Legal and illegal betting in Asia
Illegal operators use new convenient online
payment methods, which circumvent banks
Other online payment
service providers
•
Established in 2001, currently the
largest digital wallet in the global
online gambling and gaming
market
•
Supports 40 different currencies
and 100 payment options
•
Currently the only digital wallet to
have money transmission licenses
in every U.S. state, as well as DGE
approval in New Jersey to operate
in the state's online gambling
market.
•
Founded in 1999, Neteller is
used by millions of consumers
in more than 200 countries and
is especially popular in the
foreign exchange and online
gambling sectors.
•
In 2005, it provided payment
services to more than 80% of
gaming merchants worldwide.
•
It is accepted by nearly all
online gambling operators,
except for those in the US.
• Legal and illegal betting in Asia
• Criminal involvement in Asia betting
1. Asian Illegal Bookmakers
2. Asian Betting Exchanges
3. Casino junkets
• Combatting illegal betting strategy
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Criminal involvement in Asia betting
Asian betting operators are closely tied to
transnational organised crime
Asian
Bookmakers
Sports
Match
Fixing
Transnational
Organised
Crime
Macau
Casino
Junkets
Asian
Betting
Exchanges
Criminal involvement in Asia betting
1) Asian bookmakers have close links to
transnational organised crime
SBOBET and MAXBET have links through company
structures and principals
Criminal involvement in Asia betting
IBCBET (Maxbet) is a major betting operator, owned
by Paul Phua, arrested by the FBI in 2014 in Las Vegas
*Choice of 13
languages
*Customer
support
numbers in
Philippines
Criminal involvement in Asia betting
IBC and SBO ownership is linked, opaque, and may
involve multiple Asian bookmakers
‘Online gambling guru and '14K triad member'
Paul Phua snared in Las Vegas arrest’
‘Accused of operating an illegal soccer gambling
ring in Las Vegas hotel suites that United States
prosecutors allege netted billions of Hong Kong
dollars during the World Cup’
(SCMP: 27/7/2014)
‘Accused gambling kingpin Paul Phua assisting
Malaysia on matters of national security'
‘Malaysian citizen who used to be Macau's top
junket operator is not a triad member, Kuala
Lumpur's Minister of Home Affairs tells FBI’
(SCMP: 30/12/2014)
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Criminal involvement in Asia betting
FBI evidence shows links between IBCBET, multiple
offshore betting websites, and casino junkets
•
Son arrested by FBI and claimed that Phua owns IBCBET
•
‘Settlement Channels’ include casino junkets, Internet
payment channels, and Montenegrin bank
•
Phua Macau arrest: “Let me know if I need to activate the
prime minister or San Marino ministry of foreign
affairs…We just received a call from Macau saying that the
one who arrested Paul is a friend and they are negotiating
now. Hopefully they want money only”
FBI Exhibit
Criminal involvement in Asia betting
Illegal betting operators should worry us because of
the threat to racing integrity
2014, Phua’s associate, Richard
Yong, arrested in Las Vegas and
pleaded guilty to ‘Accessory to
Transmission of Wagering
Information’, fined USD100k and
forfeit USD400k in cash & property
1997, Yong arrested and convicted
in Hong Kong of charges of illegal
betting relating to race
manipulation
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Criminal involvement in Asia betting
2) Asian betting exchanges are illegal betting
operators, and a great concern for racing integrity
•
The betting exchange concept is well established
– People bet against each other, not against a bookmaker
– The exchange charges the winner a commission
•
Customers can place a ‘Lay’ bet against a runner/player/team
– This is a bet on a runner / player / team to lose
•
Citibet and Aastar are two of the most famous unlicensed and illegal Asian
betting exchanges
Criminal involvement in Asia betting
Citibet uses multiple domains (citibet, lk988, ctb988)
Criminal involvement in Asia betting
Citibet has multiple betting
products
•
Spread Betting - Bet on the price movement of
Forex, Commodity, Stock Indices
•
In-Running Bets - Bet after the start of a race
•
Fan Tan - Bet on number of buttons in a pile
divided by croupier
Criminal involvement in Asia betting
Citibet spread betting on Foreign Exchange
Asian betting exchanges
…and Stocks Indices
Asian betting exchanges
…and Commodities
Asian Betting Exchanges
Citibet is estimated to have turned over around
AUD 929.57 million on Australian races in 2013/14
Australia legal betting on racing Citibet turnover
turnover
AUD11.26 billion
(USD7.81 billion)
AUD929.57 million
(USD645 million)
Asian Betting Exchanges
Citibet is estimated to have turned over around
HK$61.5 billion (US$479.7 million) on Hong Kong
races in 2014/15
Hong Kong Jockey Club
Citibet turnover
HKD103 billion
(USD13.17 billion)
HKD61.5 billion
(USD479 million)
Criminal involvement in Asia betting
3) Casino junkets are linked to criminals, they
dominate Macau casinos, some operate betting
portals, they are expending internationally
Criminal involvement in Asia betting
Casino junkets facilitate money laundering for
criminals and threaten racing and sports integrity
Carson Yeung, convicted in 2014
in Hong Kong of laundering
USD88m from Neptune Casino
Junket in Macau, operated by a
major criminal
Peter Pannu, former Hong Kong
Police Inspector arrested in 1993
for accepting bribes from a major
criminal
Criminal involvement in Asia betting
Casino junkets are known to be investing in racing in
Australia and diversifying assets
…and operating online betting
Combating illegal betting strategy
HKJC taskforce works to combat illegal betting
Executive Director,
Sponsor
Customer & Marketing
- Director of Security & Integrity
Managers
- Director of Trading
Management Office
Functional Support
Security & Integrity
Public
Affairs
Media / government
Security
Marketing
Police / research
Marketing
Treasury
Finance sector
Combating illegal betting strategy
We need to engage with multiple stakeholders to convince
them that illegal betting is a social problem
Police & other
government
organisations
Media
Opinion shapers
Financial Institutions
Telcos / ISPs / Web
firms
Legislature
Police
Home Affairs
Bureau
Betting &
Lotteries
Commission
Newspapers
TV
Radio
Academics
Think Tanks
NGOs
Banks
Credit card
companies
E-payment
platforms
Telcos / ISPs
Advertising
platforms
Search engines
Legislators
Summary
•
Illegal / unlicensed bookmaking websites are expanding from a strong base in Asia
•
Criminal groups control illegal bookmaking operations in Asia
•
Illegal bookmaking has become a transnational organized criminal problem
•
Horse racing is doing better than other sports dealing with betting related
corruption, but we need to maintain our focus on racing integrity
•
Legitimate racing and betting operators need a strategy to combat illegal betting,
and competitive racing betting products and pricing
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