The Murky World of Illegal Asian Gambling

Viewpoint: The murky world of illegal Asian gambling
By Declan Hill
July 17, 2010
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Every four years, during or after the World Cup, there is some breathless report of an "unprecedented" police raid on Asian illegal bookmaking operations.

Now, yet another one is being announced in the world's press

One should not take them too seriously. It is not that individual policemen are necessarily corrupt, but it does mean that, overall, an elaborate game is being played out for everyone's benefit. Here is how it works.

The best way to understand much of the Asian gambling market is to think of prohibition-era America.

In that time, a significant part of the US population was doing something that the government had declared illegal - drinking alcohol.

So an enormous illegal industry grew up that corrupted many of the United States institutions and laid the foundation for the strength of its organised crime.

A similar situation exists today in many Asian countries: a large segment of the population wants to gamble; the governments say that they cannot.

'Huge illegal market'

Most of the people who were arrested in this week's police raids were merely doing what is perfectly legal in many countries of the world; they were having a small gamble on the outcome of a sports event.

To satisfy that market, a vast and ostensibly illegal industry has grown up. At its top are some of the richest men in Asia; underneath them is a network of bookies and agents who go all the way down to the corner stalls on most city blocks and villages.

This market is huge. It dwarfs the European and North American gambling markets by several factors.

Because much of it is illegal it is difficult to give an accurate estimate of its total size, but the American journal Foreign Policy estimated in 2006 the total size of the Asian gambling market at $450 billion.

For comparison, the entire Asian pharmaceutical industry is worth roughly $100 billion. This vast and mostly illegal gambling market has corrupted police forces, institutions and sport leagues across the continent of Asia.

A British gambling executive, speaking of his experiences in the Asian gambling world, told me what happened during a business trip to Thailand.

"When I got off the plane there was a police officer at the airport with my name on a board. And when he saw me, I thought: 'Oh no, what is happening?'

"He took me straight through customs, and my luggage had been put to the front of the plane, and we are escorted into the centre of Bangkok by a three-police-car cavalcade."

The executive said he was taken to the bookmaker's office for a meeting, and that a senior police officer then joined them for dinner. "If that is not the message: "I've got protection", I don't know what is," he added.

'Vast illegal industry'

There is so much corruption in sport there that the stories just seem extraordinary. Here are a few examples:

The Chinese soccer league is a national disgrace. Those are the words of Chinese President Hu Jintao, who declared in 2009, that there was so much match-fixing in their soccer league that it embarrassed China.

The same circumstances can be seen in soccer leagues across the region: Vietnam, Hong Kong, Indonesia, Cambodia, Hong Kong, Laos, Thailand, Malaysia and Singapore have all faced similar scandals in their own leagues.

In Malaysia, the corruption was so bad in the 1990s that a cabinet minister estimated that 70% of matches in its leagues were fixed. That means it was more usual for spectators to watch a corrupted match than a regularly played game.

The Taiwanese Baseball League has shrunk to four teams, from nine in the last five years, all of them lost to match-fixing scandals. And in Japanese Sumo the corruption is so well-reported there are academic papers written about it.

The vast illegal gambling industry has corrupted sports leagues and also many police forces across Asia.
Cash and equipment seized in Hong Kong raids Police found cash and betting slips during gambling den raids in Hong Kong on Friday

I spoke to a number of Malaysian policemen, gamblers and bookmakers who told me about the staged raids that go on. One told me: "Occasionally the bookies will give the police a gambling house to raid. Just for show: keep the system turning. Not make anyone look too bad."

Asia is not alone in this type of shadow puppetry. To get some perspective on organised crime and illegal gambling, I contacted Joe Pistone. Pistone is one of the heroes of the North American anti-mafia fight.

For six years, he worked as an undercover agent using the name Donnie Brasco and managed to infiltrate one of the five big New York crime families - the Bonannos. We spoke about his experiences when he was running an illegal bookmaking operation.

"We were paying off police officers, sure. Look, gambling doesn't exist without pay-offs," he said.

"It's not something that you can hide. Because you have to go somewhere to place your bets, and the bookie has to be somewhere. You know, he's got to be hanging out on a corner or in a bar or a restaurant."

I began to tell him about the Asian police sometimes making staged raids on gambling houses, but he stopped me before I could finish.

"Right, and they make a bust. I mean, that happens here in the States too," he told me.

"They make a bust and they arrest some nobodies, so it looks like they're doing something. That's the old game, that's not something new. . . . It keeps the newspapers happy, it keeps the people happy, the citizens happy, that the police are doing something.

"Somebody gets arrested. You know, somebody of no consequence. And they make sure that there's not that much money there at the time. That game's been around forever."

The press release on the current arrests speaks of £10m ($15m) being confiscated and 5,000 people being arrested. This is relatively small potatoes.

I visited one clearing house for big-time Asian gamblers during the Manchester United versus AC Milan game in February 2010.

One of their operators had placed just one bet for £10m on the game, from a rich gambler in Taiwan - and that was just one punter, making one bet in one company. You can be sure that customers like him have not been arrested in these recent 'raids'.

So do not believe the press reports. Nothing much has changed. Tomorrow morning tens of millions of people across Asia will do what they do every day: go and see their bookie and place a bet.