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The Case of Illegal Bookmakers

26 October 2016 Bojan Leave a comment Uncategorized

Sports and sports betting have gone hand in hand since the beginning of organized sports (and beyond). So, why is that today most of the sports betting turnover worldwide is made on, so called “illegal bookmakers”? What exactly are illegal bookmakers?

When mentioning the term “Illegal bookmaker” most people (including myself) think of some illegal, even criminal activity held in dark places, with suspicious audience (mostly featuring gang members, ex convicts and soon-to-be convicts). Those include some brutal “sports”, like dog fighting, cockfighting and MMA fighting. Although even these “sports” have a long tradition, today these events are considered inhumane and brutal by most of general public in western culture (cockfighting is very much alive and welcome in southeast Asia). Bookkeeping has no set rules or regulations, and no formal body overlooking bets and customer satisfaction.
Would You place a bet under these circumstances?

The level similar (although less brutal) would be contacting your local bookie, that gives you your on-demand odds. Just be careful You don’t get real-life Sopranos knocking at Your door.
But seriously, the most of the turnover called “illegal” is generated by some well known, high profile companies. Most of them are closely related to certain sports, teams and individuals. They invest millions of $ in sponsorship, giving a part of their profit back to sports that generated them in the first place. Why are they “illegal” then?

Well, it’s about sports betting being banned, or restricted in certain countries. Countries that ban sports betting mostly state that sports betting leads to match fixing. But, does banning legal sports betting truly eradicate all forms of betting? In most cases, it doesn’t. It just leads to the form of betting mentioned in previous paragraph – taking bets at your local Sopranos.
In countries that restrict sports betting, sport betting is legal, but only for licensed companies in the county. Number of licences can vary – from just a state owned bookmaker being able to take bets, up to dozens and more bookmakers operating in the same country. Still, even in countries that offer almost unlimited number of licences(there are just a few of them), there are numerous Illegal bookmakers operating. Big bookmakers, like Bet365, Bwin, Pinnacle etc.

There is a reason for that, and as usual,the reason is – money.

First of all, years of bad publicity led to the ban of sports betting in a number of countries. It has been equalized with match fixing and other criminal activities. That led to the fact that most countries that do allow sports betting of some kind tend to use strict rules for applying for licences to take bets. Also, as this companies are generally not welcome (considered a lesser evil), taxes for those companies are extremely high.
As most bookmakers operate using the internet, and are accessible in most cases, they do not feel the need to register in a certain country and pay taxes there. Vast majority of bookmakers are registered at tax oasis like Curacao, Gibraltar etc.

Operating a business without paying taxes is considered illegal in most (if not all countries), and this is the main reason why the majority of bookmakers in most countries are considered illegal. It’s not about the possibility of match fixing, or bad social influence. Money is the key, again.
What does that mean for punters? Well, it’s all about how strict are your country’s financial controls (or your banks). there are numerous ways to deposit and withdraw funds from and on your account(s) without any trouble or need to pay any taxes.
But, that’s the subject of another article.
All in all, we hope that someone else’s interests (those of your country) and tendency to scoop money from this vast market of sports betting won’t stop you from taking your own piece of the cake.
Be wise, and you’ll be fine!

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