Bookies, Bettors Bonkers over Beijing

22 July 2008

As Beijing makes its final preparations before hosting the Olympic Games in August, the issue of online gambling has become more prominent in China. The country will be the focus of world attention for the duration of the Games, and Chinese authorities are keen to present the best possible image. This has seen a purge on undesirable activities, from spitting through to gambling.

Traditionally, the Olympics have not been a major betting event compared, for example, to an international football tournament. But the Olympics have not been held in China before, and a combination of the host’s hugely patriotic citizens and their love of gambling could mean that sports books attract substantial turnover on certain events.

Having been second in the medals table in Athens four years ago, behind the United States, China is desperate to top the table at the Beijing Games. Simon Shibli, a professor with the Sport Industry Research Centre at Sheffield Hallam University, United Kingdom, has produced some analysis that predicts China will top the gold medals table with 46. His study suggests China will win 39 gold medals based on past performance and a further seven for "home advantage."

It is unlikely that most Chinese punters will have studied Dr. Shibli’s research, but instead will have used national pride as the basis for their selection. China is the odds-on favorite with both European and Asian sports books to be the country that wins most medals of any type in Beijing, but it is interesting to note the discrepancies in prices available.

The current price in Asia for China to top the medals table, 1.35, is noticeably shorter than the price available in Europe, 1.85. The United States and China are much more closely priced with European operators, 1.85 and 1.90 respectively, and both are odds-on. But in Asia the United States is much easier to back at 2.25.

China-based sports books, or any operator with a high number of Chinese clients, are likely to see a weight of money for Chinese competitors, meaning the odds will have to be shortened to a price that is lower than reflects their true chances of winning their respective events.

In many of the events where Chinese athletes performed well in Athens, the prices being offered by Asian sports books for the Beijing Games are particularly short.

Top of this list is the 110-meter hurdles where Liu Xiang holds one of China’s best chances of a gold medal on the track. He won gold in the 110-meter hurdles in 2004 and has become a superstar in China as a result. He trades at as short as 1.8 with the Asian sports book to win again in Beijing, despite the fact that Cuba’s Dayron Robles beat his world record in June 2008, lowering it to 12.87 seconds. Robles was trading at a price of 2.05. If both men make the final, it could eclipse the 100-meter as the track’s showpiece event in the Bird’s Nest, certainly with Chinese spectators.

Elsewhere, Chinese competitors dominate the men’s table tennis betting, holding the first three places in the market with the Asian bookmakers, while China is also odds-on for a number of the diving events. China-facing sports books will be hoping that the weight of expectation is too much for a few of the Chinese athletes, as they could be facing some sizeable payouts if they all win their events.

Of course, in China, fixed odds sports betting is currently not permitted. The Chinese authorities used the 2008 UEFA European Football Championship in June to step up their campaign against online gambling.

Police in the southern city of Guangzhou arrested eight people during the tournament and found betting receipts worth $1 million in raids on gambling "dens" in various parts of the city.

The China Daily, a state-run paper, reported that the venues were being used to place bets on Euro 2008 matches via the Internet. The newspaper quoted one unnamed official as saying that the arrests had "dealt a heavy blow to those involved in online gambling and underground soccer betting events." The same article includes police estimates that $4.4 million was placed on the tournament using Internet betting sites, but this figure seems a gross underestimation.

Hong Kong, which will host the Olympics’ equestrian events, has also been cracking down on illegal activities. As part of a broader crime-prevention operation called "Thunderbolt 08," carried out by the authorities in Hong Kong, Macau and Guangdong between June 1 and July 16, 2008, 20 gambling dens were shut down, with football and racing betting records seized.

In the first six months of the 2008 calendar year, Chinese media have reported on a number of online gambling prosecutions and there are signs that China is toughening its stance on illegal Internet gambling.

The key figure in an online betting operation in Liaoning province was recently handed a 15-year prison sentence and a $5.9 million fine for his crimes. In addition 42 other members of the operation received combined fines amounting to a staggering $22.1 billion.

State media reports carried comments from a vice procurator general who said: "Fighting against online gambling is a new challenge. It spreads quickly and is often well concealed."

Ahead of the Olympics, online gambling remains a cause for concern for the Chinese authorities. The strategy for tackling the issue, just as with spitting, has been to increase the punishment for doing it. The chances that either activity will be stopped by the harsher penalties are slim.

Lorien is a research analyst with Global Betting and Gaming Consultants, and currently resides on the Isle of Man. Prior to this, he spent three years at a leading United Kingdom gambling firm, providing regulatory and market research for its various international e-gaming ventures.