Corruption in Gambling

Corruption is rife in the EU according to a recent study published by the BBC, and with anti-gambling campaigners in the US correlating gambling and corruption, what is the real story behind corruption and gambling?

Recent studies have shown that the EU economy is losing at least EUR 120 billion per year, according to the European Commission. While most of the corruption falls under the form of bribes, there are those who connect corruption to gambling.

In the US, many states like to point the finger at casino and legalized gambling as being the cause of corruption in the states, with groups lobbying against online gambling sites in the US from springing up.

So to what extent do gambling and corruption correlate with each other?

Match-Fixing: The Dark Side of Sport

It’s impossible to discuss the link between gambling and corruption without mentioning the topic of match fixing and its effect on sports corruption.

While corruption in sports might not be akin to having politicians literally gambling the public’s money away, sport has the ability to teach us some of life’s most important lessons on fair place and honesty.

Transparency International, an organization that works to fight corruption around the world sees corruption in sports as being an important issue, and has even launched their own project with a focus to combat match fixing.

As the online betting market has reached a net worth of $700 billion annually, it’s easy to see why match fixing and money laundering are becoming an issue in the area.

To sum up, match-fixing is essentially getting someone who is an insider in a sporting game, like a player or an official, and getting them to either accept a bribe or intimidate them to lose a game or a race.

The rise of betting exchanges has helped to facilitate two-way betting, where people can also bet on a horse or a team to lose, which is easier to fix than a win.

Sam Sodje, formerly of Portsmouth, was caught on camera saying that he can arrange for players to be sent off in exchange for a GBP 70,000 fee.

While bookmakers in Europe and the UK keep an eye out for irregular betting patterns and any signs of match fixing, the problem stems from overseas, from the lucrative Asian gambling market.

The many illicit gambling dens in East Asia are in a dire need of a crackdown, but until that happens, there is the danger that its gambling activities will spill into the European Football league games.

The temptation for the players to take bribes is also one to consider, since many European players have not received their salaries on time, with the number running around the 40% mark, and yet 12% are approached with financial enticements for match fixing.

Another form of match fixing is having a player sent off with a red card, where bets in the Asian markets are made on knowing when a player will be sent off exactly.

However fixing is not only limited to football, since cricket and tennis have also been victims of sports corruption.

Corruption and Casinos?

Match fixing might be the first thing that comes up when corruption and gambling are strung together in a single sentence, but another topic is the US subject for debate that links state corruption to casino gambling.

Often the dialogue in the US on the topic of corruption in gambling is a difficult one to objectively decipher, since much of the noise being made comes from objections based on religious grounds.

However, recent studies looking into the causality between casino gambling and corruption show a possible link between the two.

Economists Douglas Walker and Peter Calcagano say their study showed that corruption convictions increased after casinos became legalized, but their analysis also showed the corrupting influence of casino interests one to two years prior to their legalization.

Notable match-fixing scandals:

• Nigerian football player for Portsmouth was arrested for match fixing, after claiming he was deliberately sent off for GBP 70,000.

• A British man was arrested earlier in January for feeding courtside information to a foreign syndicate at the Australian Open.

• The Black Sox Scandal of 1919 saw several members of the Chicago White Sox conspire with gamblers to fix the World Series.

• In 2013, during the Indian Premier League, 3 cricket players were banned from playing after being caught match fixing by using towel signs in bowling.

According to Walker and Calcagno, the increase in public corruption convictions before casinos are approved in the state stems from the “evidence” that the industry is already attracted to states that already have an existing “culture of corruption.”

The study appears to be rather circumstantial in its observation, not to mention crosses between the chicken and the egg syndrome on whether casinos cause corruption or whether casinos are put in place in already corrupt states.

The states that showed the highest annual rates of public corruption came from the casino states, with the lowest five states in terms of corruption still had not legalized casino gambling.

Although, the study aims to show causation through correlation renders the actual relationship between the two as being vague.

Macau’s Dirty Little Secret

Macau has established itself as the new gambling capital of the world, even overtaking Las Vegas, with it’s impressive casino resorts and elaborate skyline.

Macau is a special administrative region of China, where gambling is legalized, unlike the rest of China where gambling is illegal.

However, that hasn’t stopped Chinese officials from crossing the border to gamble away public money.

The biggest corruption scandal in the area came to light when Ma Xiangdong, the deputy mayor of Shenyang, was caught gambling with public money with his senior cadres in 1999.

Ma had lost over 30 million Yuan that he embezzled from public funds, causing his city to experience grave problems. He had also gambled away 10 million Yuan in 3 days.

His economic negligence and his acceptance of bribes led him and public property chief Guo Jiuci to be executed in 2006.

Ma was not the only Chinese official caught gambling away public money. Party propaganda chiefs Zhang and Zhang lost $12 million of Chongqing public funds at the Lisboa Casino in 2004, and Zhang Jiuan who lost $18 million and Li Weimin totaling $11.5 million in losses.

It appears that casinos and sports betting certainly attract corrupt officials, but the gambling industry still has the chance to cut down on match-fixing and illicit gambling. The real question is how can gambling officials crack down corruption?