The Asian Racing Federation (ARF) has sent out a warning over the extent of the damage being caused by illegal gambling in the Asian continent. ARF also stated that match fixing and money laundering have gone rampant and needed to be curbed while gambling-related suicides will continue to increase unless the government takes immediate action.
Martin Purbrick, chairman of ARF’s anti-illegal betting task force and who also serves as head of security and integrity for Hong Kong Jockey Club, also said illegal gambling helps in facilitating international organized crime.
The ARF has released a research paper highlighting the rapidly growing illegal gambling market and the threat it poses to racing and other sports.
Governments Urged to Take Action
Purbrick is calling on racing administrators to urge Asian governments and regulators to implement a more effective approach to combating illegal betting, saying failure to do so could kill the sport.
The jurisdictions highlighted in the report are Singapore, Hong Kong, South Korea, South Africa, New Zealand and Australia. In all of these territories, the growth rate of illegal betting is higher than that of legal gambling, generating total profits of at least US$4.2 billion each year spread across all six.
In every jurisdiction, sports corruption related to illegal betting has been identified.
Gambling Disorder Highly Apparent Among Illegal Bettors
Compared to legal betting, illegal betting leads to excessive spending and gambling disorders at a much higher rate. Evidence to support this finding has been identified in every jurisdiction. Gambling disorder is a costly problem affecting families and the society as a whole, and even results in higher incidence of suicide.
In Hong Kong, where most of the activities are run by triads, illegal betting profits generated in 2016 of up to HK$13 billion were remarkably higher than the HK$11.45 billion recorded by the Jockey Club in the 2016-2017 financial year. International crime gangs operating casino junkets in Macau are also contributing to the magnitude of the problem, the report found.
Billions of Taxes Lost to Illegal Operators
Unauthorized operators offering services to the six jurisdictions also manage to get away without massive taxes due to unregulated markets, putting legal operators at a huge disadvantage. Hong Kong is losing US$1.2 billion in taxes every year to the grey market, with Australia also missing out on US$273 million in taxes and product fees.
South Korea takes the brunt of the problem, reporting US$7.9 billion in lost revenue annually. Illegal betting occupies 62 percent of the entire gambling market in the country.
In Australia, illegal betting has taken a huge toll on punters, as 78.5 percent of them are identified as either problem gamblers, moderate-risk or at-risk. This is relatively higher than the percentage of legal gamblers who fall into the three classifications (59.7 percent).
In Hong Kong, credit betting is the main reason behind depression among gamblers as well as family breakdowns which can ultimately result in suicide. Credit betting is allowed and facilitated by illegal operators in the country where 73 percent of illegal bettors are classified as at-risk or problem gamblers, compared to just 39 percent of legal gamblers. Illegal online betting also provides a convenient environment for money launderers, as gambling criminals can operate behind the guise of anonymity while giving out higher payout rates.
Lack of Regulation Sustains Grey Market
Illicit operators are clearly benefiting more than their legal counterparts as they offer a wider range of betting options, facilitating match-fixing and other illegal activities across several sports. The report suggests that a lack of regulation is partly to blame for this. The problem is made even worse by the fact that the controversial Asian betting exchange Citibet allows punters to back horses to lose, placing the racing industry’s integrity in jeopardy.
Citibet has been at the center of an investigation as it was found to have links to organized crime. The betting exchange takes massive profits from racing in Hong Kong, and also operates in the other five jurisdictions mentioned in the report.
The report concludes by considering illegal betting as a global crime, affecting markets and economies all over the world. ARF is sending out a strong message to government authorities to deal with these problems promptly, to better protect gamblers, and to ensure these illegal operators are stomped out of the gambling market as soon as possible.

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