3 minute read
LAST WORD
Change in the air?
Sharon Singleton | Managing Editor, AGB
The FIFA World Cup will trigger football frenzy across the globe and a sports betting bonanza along with it, but governments in Asia are still not benefiting, seeking to crackdown on gambling activity rather than regulate and reel in the tax revenue.
The last event was held in 2014 in Brazil and generated a record volume of bets. It also triggered a massive crackdown across Asia, with governments showing a rare degree of collaboration to stamp out black market gambling.
Interpol teamed with nine countries, including China, Malaysia, Thailand and Vietnam to shut down illegal gambling rings, arresting about 1,400 people who were estimated to have handled more than $2.2 billion in wagers.
In reality, given the growth levels in the region, that’s likely to have been the tip of the iceberg. For example, the amount bet on a game by game basis during the European Championship in 2016 was 50 percent higher than during Euro 2012.
This year the World Cup will be in Russia, kicking off in Moscow on June 14th, and Asian authorities are once again expected to gear up to stamp out illegal activity. Vietnam already has announced major busts, with one involving a former high-ranking police officer.
However, there are glimmers of hope around the region that the regulatory tide may be beginning to turn.
Before the end of June, the U.S. Supreme Court is expected to rule in a case brought by the state of New Jersey, which could result in the lifting of a ban that prevents betting on sports in all but a handful of states.
The American Gaming Association estimates the illegal market there at $150 billion. According to Global Market Advisors those figures could potentially translate to $8.25 billion in taxable gaming revenue, assuming an average 5.5 percent hold for sports books.
Although not necessarily directly relevant to Asia, it’s a major domino to fall and some experts have speculated that it will ultimately hasten the advent of regulation elsewhere.
One interesting recent development was China’s announcement that it was exploring the possibility of more sports betting on the southern island of Hainan amongst other options to boost tourism numbers. Few details are available, but the government has said it will support horse racing and “explore the development of sports lottery and instant lottery on large-scale international games,” the state news agency Xinhua reported.
The country does allow betting through its state-run Sports Lottery, although online betting was outlawed in March 2015 due to rampant abuse. In theory, the government is drawing up new regulation, but it has been a long time in the works.
Still, the idea that they may open the door a crack is an interesting one and will likely be viewed with interest elsewhere.
In India, another giant potential market, the Law Commission has been asked to analyse the potential impact of legalizing gambling and to provide a recommendation to the federal government. The country has been dogged by sporting scandals involving its prized cricket team and proper regulation has been touted as one way of cleaning up sport as well as providing a significant revenue stream.
The Commission is expected to provide its response before July, however, industry participants are concerned thateven if it does returns a favorable verdict, its recommendation will include a considerable number of restrictions.
Vietnam last year introduced new rules that will allow betting on soccer, horses and greyhounds. The rules were far from perfect and didn’t go as far as the industry would have liked -- they don’t allow online gambling for example and restrict football betting to a handful of FIFA-recognized matches -- but it is another step in the right direction.
In some jurisdictions around Asia, such as the Philippines and Cambodia, casinos are able to offer sports betting options to their clients and they are proving highly popular. Okada Manila recently expanded its sports book offering though an accord with platform provider FSB (UK), Paddy Power and Jade Entertainment and Gaming Technologies to take advantage of strong demand.
Operators in Macau would love to introduce sports betting lounges, but are prevented from doing so under the law. Macau Slot, an affiliate of SJM Holdings, holds the monopoly on sports betting and provides a far from modern experience for punters.
At G2E Asia in 2017, MGM China chief operating officer, gaming, John Shigley acknowledged the wide desire to bet on sports in Asia. “We would love to have a piece of it and pay a whatever tax rate is most relevant to develop reinvestment and pay the best salary for our employees,” he said.