Betting is an ancient activity that has always attracted customers of good and bad faith. In an ever-evolving industry, a number of factors have contributed to a rapidly growing illegal betting market, such as the diversity of gaming products (online or land-based), advances in technology, including the Internet, blockchain, live betting where bets are placed after a game has begun, and the challenge of detecting market movement and possible manipulations in real-time. Additionally, different countries follow different regulatory systems – monopoly, licensing, prohibition – as already mentioned.
During the global pandemic lockdown, one reason for the growth suspicious betting activities has been attributed to a higher level of risk-taking and vulnerability of athletes and sport stakeholders, as a result of reduced playing and earning opportunities.
Additionally, an article by the Asian Racing Federation Council on Anti-Illegal Betting and Related Financial Crime, now the IFHA, looks at evolving technologies such as third-party betting software, anonymous website registration, cryptocurrencies, and “spam bots”, all of which have made it easier to become an illegal bookmaker, and an illegal bettor.
The article notes that since late 2019, spam advertising of illegal betting in Hong Kong through social media apps, such as Whatsapp, Telegram and Signal and via platforms including Facebook, Instagram and Twitter has grown and reaches smartphones directly, across Asia, including India, Mainland China, Malaysia, Singapore and South Korea.
What has also been witnessed since the end of the pandemic across Asia is the use of social media influencers to promote illegal betting operators, evidenced by the arrest of an influencer in Hong Kong for betting illegally, as well as promoting an offshore illegal betting operation. This is especially problematic because such social media influencers overwhelmingly target youth bettors, normally those who are underage (and therefore cannot bet legally).
Asian illegal betting actors have also become more brazen in luring customers to their online platforms, using overt and direct marketing techniques outside sporting events, as well as distributing free gifts to passers-by. The wider growing acceptance of cryptocurrencies as a means of a near-anonymous medium to facilitate illegal betting transactions is also a growing temptation for eager punters.
The use of such advertising by illegal betting operators is of particular concern given that younger, new customers, who are prevalent users of major social media channels will inevitably be targeted. Some of these players may have issues with gaming addiction or may be otherwise vulnerable. This is another aspect of illegal betting that needs to be understood by governments and countered.
In line with these trends, the 2021 Global Report on Corruption in Sport, by UNODC4, estimates that global illegal sports bets total up to US 1.7 trillion each year and are often used by organized crime groups for money laundering.
In the case of Asia, where betting is very popular, most forms of sports betting are either illegal under national law, or heavily regulated. This has resulted in a substantial illegal betting market. In this region, legal sports betting services are often managed by the state or by licensed non-profit organizations that have heavy restrictions on the type and form of products they can offer. For instance, Singapore’s only legal sports betting option is the Singapore Pools, while the Hong Kong Jockey Club is the sole licensed operator for betting on football and horse racing in Hong Kong.
Often, illegal operators cater to demands that are not being met by the legal market, by providing a broader range of betting products and more attractive payouts. Given that illegal operators are not subject to the financial and regulatory controls of the jurisdiction, including taxes, their betting offers have diverse advertising options and are harder to trace.
Online gaming operators can take advantage of the globalized financial system and place their illegal profits in tax havens and investment funds without consideration for national legislation. Additionally, cryptocurrencies have made it easier for illegal betting operations to launder money at a low cost with a high payout.
The impact of illegal sports betting on the integrity of sports
Online sports betting has become a vast, transnational industry. The different regulations across jurisdictions mean that much of the activity takes place in jurisdictions where it may be illegal or unlawful. The use of online gambling for money laundering and the financing of terrorism has long been recognized. When illegal betting profits are funneled into “official” enterprises – whether a shell company, legitimate sports team, through the transfer of athletes, or by placing many legitimate, smaller bets, money laundering creates an organic link between legal and illicit economies, where the ultimate aim is to distance the dirty money from its illegitimate source.
Financial crime connected with sports betting and sports integrity is complex and can involve many people in global operations, who may be difficult to identify. Authorities must consider different aspects, including cross-border online gambling, eSports betting, foreign regulatory developments, and cryptocurrency gambling.
There are different types of money laundering operations:
- A money launderer, in collusion with an operator of an offshore gambling website, deposits funds obtained from criminal activities in the gambling account and withdraws such funds as winnings. The website operator keeps a percentage of the proceeds as a commission while the launderer declares the winnings to the tax authorities and then uses the funds for legitimate purposes.
- A money launderer sets up a company in an offshore jurisdiction through various front men. The company then applies for an online gambling license in the offshore jurisdiction. Funds deriving from criminal activity are then laundered through the online gambling website which is controlled by the launderer.
- A criminal colludes with other persons
acting as beneficial owners of a company that is used to obtain an online gambling license. Illegally obtained funds are then mixed with the legitimate profits of the company and deposited in a bank account. - A money launderer sets up an online gambling website without registering the website or obtaining a license. The website is not made available to the public but is used to place funds obtained from criminal activities which are then distributed as winnings to various front men. The website is then disconnected citing failure to make a profit as the primary reason for the disconnection.
Restrictions that could be established to curb the use of online gambling for money laundering and the financing of terrorism purposes include:
- Limitations on the amount of money that can be gambled
- Limitations as to the amount of time that can be spent gambling
- Restrictions on the number of gambling accounts that can be held by a player (usually one per player)
- Prohibition to provide credit to a player
- Prohibition to accept stakes from a player if no funds stand to credit of the player
With the rapid growth of online betting and the types of bets offered, the work of ULIS has never been more relevant.
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Illegal operators may find themselves in a position of considerable power as sponsors of athletes, teams or aspects of sports events, if due diligence is not carried out on potential sports sponsors. This Macolin Convention covers this and specifies in Article 16.3 that authorities should consider including the manipulation of sports competitions in money laundering prevention frameworks by requiring sports betting operators to apply customer due diligence, record keeping and reporting requirements.
Other issues that may arise with illegal operators include the abuse of inside knowledge when offering betting products, conflicts of interest and their ability to negatively influence sports competitions.
United States and Central America
In the article by Jacob Davis, Pocket Sportsbooks: Mobile Sports Gambling in the Modern Era, 51 Fordham Urb. L.J. 843, 869 (2024) it is explained that illegal bookies have taken advantage of lax or non-existent laws in places like Antigua, Costa Rica, Latvia, and Panama to set up online sportsbooks that target American consumers. Though there are claims in these countries of regulation and licensure, these sportsbooks are illegal in the United States. Following the Supreme Court decision in Murphy vs. NCAA and nearly half of the states legalizing sports betting, these operators continue to take advantage of the unsuspecting public.
Sports betting is highly regulated at state level, with rigorous licensing regimes to ensure game integrity and consumer safety. Sportsbooks and operators that offer sports betting outside of these licensing regimes – whether in person or online – are illegal. This is in line with the Macolin Convention definition of illegal sports betting.
Federal law makes it a crime to participate in the business of illegal gambling. The AGA article SIZING THE ILLEGAL AND UNREGULATED GAMING MARKETS IN THE UNITED STATES remarks that several statutes stipulate that it is illegal to operate or participate in financial transactions related to an unlicensed sportsbook in the United States, including the Wire Act, the Illegal Gambling Business Act, the Travel Act, and the Unlawful Internet Gambling Enforcement Act. Beyond federal statutes aimed specifically at gambling, a variety of broader criminal laws targeting organized crime have also been the basis for the prosecution of offshore gambling rings.
Macao and Hong Kong
In Hong Kong and Macao, recent developments highlight the mounting challenges posed by illegal sports betting, as authorities intensify their crackdown on related crimes, as described in an article in the South China Morning Post.
During UEFA EURO 2024, Hong Kong police arrested 735 individuals and seized HKD692 million (USD 89.7 million) from a crackdown on illegal soccer betting. Â
Illegal betting operators also corrupt local sports, as shown by several match-fixing charges in 2024 and early 2025 being brought against football club owners, players, coaches, and three associates for match-fixing in order to facilitate illegal betting syndicate, as described in a press release by the Independent Commission Against Corruption (ICAC), Hong Kong Special Administrative Region.
They also continue to create criminality within Hong Kong as demonstrated by the arrest of 21 individuals who enticed foreign domestic helpers into opening virtual bank accounts to launder HKD 74 million (USD 9.5 million) in illegal betting profits, as described in an article in The Standard.
Authorities in Hong Kong, Macao, and Mainland China have collaborated more closely to tackle cross-border illegal gambling activities, as seen in an article on the Hong Kong Police Force website.
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International and regional efforts
The importance of effective intelligence broadens the reach, understanding and visibility of sports integrity units.
It also increases the potential for identifying cases that originate from other non-sport sources and might be relevant for tackling criminal acts. Often law enforcement agencies lack time and resources, however, they can benefit from involvement in cross-sectorial projects specifically addressing intelligence gathering.
The INTERPOL Financial Crimes and Anti-Corruption units worked with the Asia-Pacific Expert Group on Organized Crime, the INTERPOL Match Fixing Task Force and partner UEFA, on Operation SOGA X. During the 2024 UEFA Men’s European Football Championship, specialized officers across 28 countries targeted organized crime groups looking to earn millions from illegal gambling and related money laundering activities.
Operation SOGAÂ X resulted in the shutting down of tens of thousands of illegal websites, and to the rescue of trafficked workers and the exposure of money laundering syndicates.
An EU financed project under Integrisport Erasmus, known as the Integrisport Next project aims to enhance law enforcement and prosecution activities of sport-manipulation-related crime. It involves ULIS and the lotteries of the jurisdictions within the participating countries. In 2020, Finnish law enforcement authorities exchanged information with the Finnish lottery Veikkaus and learned about the threats that legal betting operations face in the context of sports manipulations. Thanks to this project, further-specialized units have been established.
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Cryptocurrencies in online betting
As the online betting market grows, so does the number of operators that accept cryptocurrency.
The FATF defines virtual currencies as “a digital representation of value that can be digitally traded and functions as (1) a medium of exchange ; and/or (2) a unit of account ; and/or (3) a store of value, but does not have legal tender status (i.e., when tendered to a creditor, is a valid and legal offer of payment) in any jurisdiction”.
Virtual currencies are not issued, nor are they guaranteed by any jurisdiction. They are distinguished from the real or national currency, or coin and paper money of a country, designated as its legal tender. It is also distinct from e-money, which is a digital representation of a national currency used to electronically transfer the value of the national, legal currency.
Cryptocurrency uses blockchain technologies, which enable anonymous, simple, fast, cross-border payments. This entices people who want to place corrupt bets on fixed sporting events, and poses a great threat to the online gaming and betting industry.
A February 2024 International Federation of Horseracing Authorities Council on Anti-Illegal Betting and Related Crime bulletin warned that the use of cryptocurrencies is now increasingly the norm in illegal betting markets, with the number of these licensed but under-regulated illegal betting websites accepting cryptocurrencies increasing by 26% since 2020.
Cryptocurrency is even more popular with unlicensed illegal betting websites often run by organized crime. These typically not only accept deposits in cryptocurrency but actively encourage them by providing attractive bonuses and rebates.
The main reason for this is obvious – cryptocurrency is much more convenient for the moving, processing, and mixing of funds from illicit activity than fiat (traditional) currency.
The IFHA Council also notes that nearly one-fifth of over 4,000 betting websites accept one or more cryptocurrencies, which does not include unlicensed websites. A growing number of bettors use them to access betting agents such as Citibet, cryptocurrencies facilitate race-fixing or match-fixing. In unregulated marketplaces, betting agents have no obligation to report suspicious activities, which enables illicit gaming to flourish.
