Analysis | China should make its peace with sports gambling

China’s illegal gambling industry is worth a staggering USD600b annually

China is mad for football, and the proof is with the bookies. In just the past month, police have seized tens of millions of dollars and arrested more than 500 people in crackdowns on gambling rings that surged in popularity during the UEFA European Championships. If they’d wanted to arrest more, they probably could have: China’s illegal gambling industry is worth a staggering USD600 billion annually, according to one estimate, making it by far the world’s largest.
Those numbers would be troubling in any country. But they’re particularly so in China, where tycoons are busy buying up some of the world’s most storied clubs and talented players, and even proposing a well-funded alternative to the Champions League. China’s history of corruption in its own leagues, combined with all that illicit betting, is leading to legitimate worries that those acquisitions might further taint the global business of football.
Addressing this problem will require more than periodic crackdowns on bookies. Instead, China needs to make peace with its love of gambling – and legalize it.
For two decades, football and corruption have been largely synonymous in China. Its domestic leagues, and their underpaid players and referees, have long been easy marks for organized crime and well-heeled punters. It was no secret, either: For years, whenever a Chinese team failed to perform up to expectations, fans and even state-owned media would simply assume somebody was paid off.
They weren’t necessarily wrong. In 2009, the government began a multiyear crackdown that resulted in dozens of referees, sports officials and players getting convicted – including two stars from the 2002 national team that reached the World Cup. Xi Jinping, who oversaw the crackdown prior to becoming China’s top leader, didn’t see it simply as a matter of law enforcement. He saw it as laying the groundwork for China to build a world-class football program.
Since 2012, Xi has tried to boost youth and amateur leagues while tacitly encouraging the country’s new tycoons to pour money into the top-level Chinese Super League. Those tycoons haven’t let him down, with everyone from Alibaba’s Jack Ma to Wanda’s Wang Jianlin buying teams.
In theory, all that state-
approved money should’ve made its way into the pockets of players, referees and officials, thereby reducing the financial incentive to fix matches. But things still aren’t as clean as China might like. In March, the Hong Kong Jockey Club, the city’s official gambling operator, announced that it had banned bets on Chinese Super League matches, citing the need to “safeguard the interests” of its customers. Meanwhile, an official with the International Centre for Sports Security, a watchdog group in Qatar, flatly stated that “we still see suspicious betting on some matches.”
The solution to this shadiness is to bring the gambling business into the light. Since 1989, China has had a national “sports lottery” that allows small bets on international matches, but not on the Chinese Super League. That might not have been a problem when the CSL was a football backwater. But as the league becomes a destination for top players, punters should be allowed to bet on it as easily as they can on European leagues.
That would be a crucial, if counterintuitive, first step toward cleaning up the sport. Illegal bookies and their untraceable cash are far more likely to fix matches than regulated bookmakers who have a stake in keeping the marketplace clean. And for punters, the prospect of a legal, transparent transaction – including a guaranteed payout – should be incentive enough to shift money from dirty bookies and the crime syndicates behind them.
Gamblers should also be able to place bets online. Last year, the government banned doing so due to fraud in several internet lotteries. In the absence of legal options, and in search of convenience and anonymity, Chinese punters have gone digitally underground and formed thousands of illegal groups where they make (theoretically) untraceable bets. In recent weeks, WeChat, China’s most popular social media service, has restricted more than 8,000 groups suspected of gambling, and placed limits on online payment systems to control wagers.
That’s a losing battle. Better that the government legalize the whole enterprise and keep a watchful eye on it. That won’t erase all doubts about the integrity of Chinese football. But a commitment to go beyond periodically purging bad actors, and to sensibly regulate the source of the problem, would alleviate the worst concerns. As China continues its push to become a football superpower, that’s a goal that everyone in the game should want to score. Bloomberg