Jean Mballa Mballa, Executive Director of CRADEC, is installed at the VAR until February 11. Kick-off with sports betting

With just a few days to go, the 34th edition of the African Cup of Nations (CAN), the great showpiece of the continental game, will finally take up its quarters in the land of the Elephants. This global event is more than ever the center of attention. Fans, TV channels, talent seekers and recruiters all have something to gain from the event. The same goes for financial and economic networks, in this case through sports betting. Sports betting offers a great opportunity for profit and money laundering, to the disadvantage of a continent already in such need of resources for its development and its people. Newspaper Intégration and the African Regional Centre for Endogenous and Community Development (CRADEC) are taking advantage of the opening of the competition on January 13 to put on their awareness-raising jerseys. They have already shown the red card to a practice that is booming in Africa, and which has a high potential for fuelling illicit financial flows (IFF) on the continent.

Talking about this phenomenon, which is still largely underestimated, is just the beginning of a long series of publications and denunciations. With the CAN of Integration, it will be possible to learn about all the corruption and other scandals that have shaken the planet of sport in general, and soccer in particular. Jean Mballa Mballa, Executive Director of CRADEC, is installed at the VAR until February 11. Kick-off with sports betting.

 

Sports in general, and especially soccer, are known to make a lot of money. The African Cup of Nations 2024 in Ivory Coast will be no exception. However, do you have the feeling that soccer managers and the governments organizing these continental competitions have enrolled in the school of transparency that you would like to see?

CRADEC is committed to the fight against illicit financial flows in Africa. We have just spoken out on corruption during the International Days for the Fight against Corruption and the Protection of Human Rights. Sport in general and soccer in particular are theaters of illegal and illicit practices, giving rise to cases of organized financial crime against young people, corruption at matches and money laundering. We want the African Cup of Nations 2024 in Ivory Coast to take place in a framework of fair play, financial transparency and sports integrity.

To answer your question, transparency in the world of sport, including soccer, is an important issue. Many organizations and governments have been called upon to strengthen transparency in the management of sports events such as the African Cup of Nations and others, and the associated funds (ticket sales, television rights, sponsorship and investments).

Concerns have been raised about the management of financial resources, decision-making processes and the accountability of the players involved.

FIFA (the International Federation of the Football Association) has set up a Global Football Integrity Program, aimed at increasing transparency and accountability. However, the implementation of these measures to fight against match manipulation and organized crime in the world of soccer can differ from one region to another, and depends often on the will of national governing bodies and governments.

The Confederation of African Football (CAF), in partnership with the African Union (AU), runs joint programs focusing on education, good governance and the fight against corruption, the exploitation of young athletes, and safety and security at soccer matches. It is reasonable to think that the results and effects of such programs can benefit the preparation and realization of the African Cup of Nations 2024 in Ivory Coast.

Cameroon’s qualification for the last World Cup in Qatar has generated tensions between Algeria and Cameroon over suspicions of corruption. All this at a time when sports betting has become part of our daily routine, and often gives the impression of taking soccer players hostage by fueling the opacity surrounding Africa’s king of sports. What do you think is the current level of threat posed by sports betting as a fuel for illicit financial flows (IFF)?

The link between sports betting, corruption and illicit financial flows (IFFs) is a global concern in the field of sport, and this includes soccer in Africa. Sports betting can become a potential vehicle for illicit financial flows, notably through match manipulation, match-fixing and corruption activities linked to the world of soccer.

This can lead to a loss of integrity in the sport, suspicions of match-fixing and, in some cases, a loss of credibility for federations and tensions between the nations involved.

Illicit financial flows, which include activities such as corruption, money laundering and other criminal practices, are fueled by a variety of sources, with sports betting being one of these potential sources.

Transparency, international cooperation and effective monitoring mechanisms are key to fight against these problems in the world of sport.

From sports betting to FFIs and money laundering, how do you see this mechanism working in practice? And what consequences might this have for the continent and our country?

The mechanism that can lead from sports betting to illicit financial flows (IFFs) via corruption and money laundering can be complex, involving several stages and players. Allow me to present a general description of the process for your readers’ understanding:

  1. Match manipulation: Malicious individuals or groups may attempt to influence the outcome of matches by bribing players, referees or other sports players.
  2. Placing illegal bets: on rigged results via illegal channels or unregulated betting sites, concealing their activities by evading control institutions.
  3. Financial gains: If they are successful in manipulating the results, these illegal players reap illicit financial gains from the bets placed, which constitutes the first stage of illicit profit.
  4. Money laundering: To dissimulate the illegal origin of these gains, individuals may use money laundering. This can involve complex transactions designed to make illegal money « clean » by passing it through several stages, for example using shell companies, international transactions or fictitious investments.

The decision by the Ivorian authorities to ban a sports betting site like 1XBET can be seen as a measure aimed at strengthening regulation of the sports betting sector and combating possible illegal activities, including money laundering. However, the effectiveness of this measure depends on various factors, including practical implementation, monitoring capacity and cooperation with the relevant stakeholders.

  1. Illicit financial flows: Once money has been laundered, it can be used to finance other illegal activities or transferred abroad, thus contributing to illicit financial flows.

The consequences of this process for the African continent, including Cameroon, can be serious. We can mention just a few:

  1. Integrity of sport: Match manipulation and related activities compromise the integrity of sport, undermining the confidence of fans and sponsors.
  2. Economic impact: Illegal activities in sport can lead to significant economic losses, particularly in terms of public revenue, investment in sport and potential sports tourism. When these illegal activities are proven, the potential funds associated with sport or soccer are also negatively affected.
  3. International reputation: Corruption and money-laundering scandals can have a negative impact on a country’s international reputation, affecting diplomatic and trade relations.

In a 2013 publication, experts Pim Verschuuren and Christian Kalb wrote « Money laundering, a new scourge for sports betting ». In it, they note that no comprehensive study exists in Europe, and set out to fill this gap. Before we look at some of the figures published since then, can we find out whether Africa in general, and Cameroonian civil society (Cradec) in particular, have already taken the measure of the threat and set about documenting the phenomenon, with figures to back it up?

Money laundering and illicit financial flows are global concerns, including in Africa. The African Tax Justice Network and many others have taken steps to combat these phenomena. National authorities, regulators and international organizations often collaborate to put in place regulations and monitoring mechanisms aimed at preventing and detecting illicit activities. A Memorandum of Understanding is currently being implemented between the Network and the AU.

Considering the cross-border nature of online sports betting, cooperation with other jurisdictions and participation in international efforts can strengthen regulatory capabilities and contribute to the prevention of money laundering.

In the case of Africa as a whole, and Cameroon in particular, awareness of these issues should be stepped up, given the importance of sport in general, and soccer in particular, on the one hand, and the level of risk and economic vulnerability of African youth on the other. Sports federations and other associations, governments and civil society players have a crucial role to play in collecting data and documenting the phenomenon. This can include studies on the links between sports betting, money laundering and illicit financial flows, as well as efforts to raise public awareness of the associated risks.

The establishment of solid regulations, effective monitoring mechanisms and international collaboration can help mitigate these threats. Civil society organizations engaged in the fight against illicit financial flows, such as CRADEC (African Center for Endogenous and Community Development) in Cameroon, can play an important role as monitoring and advocacy forces to ensure that the authorities take the necessary measures to counter these practices. They can also help to ensure that the authorities take the necessary steps to counter these practices.

According to the International Centre for Sports Security (ICSS) and the University of Paris 1 Panthéon-Sorbonne, « criminal organizations launder more than $140 billion (over €100 billion) in sports betting worldwide every year ». When you consider that today Africa loses (only) 37.5 billion dollars a year to FFIs, don’t you think we need to review our priorities?

There’s no denying that sports betting and money laundering through these activities constitute a major problem on a global scale, with potentially serious consequences for the integrity of sport, the global economy and social stability. The figures you mention, indicating that criminal organizations launder over 140 billion dollars each year in sports betting worldwide, underline the scale of the problem.

When we compare these figures to Africa’s annual losses of $37.5 billion from illicit financial flows (IFFs), it’s clear that the continent also faces significant challenges in terms of money laundering and economic losses. These losses can have profound consequences for economic development, governance and stability in African countries.

In addition to the reasons mentioned above, there are two others that are essential to placing greater emphasis on the issue of money laundering, particularly in relation to sports betting. These are security and national governance. Money laundering activities can have security implications ranging from organized crime to terrorism, as they can be linked to criminal networks and other illegal activities.

The fight against money laundering therefore requires solid governance, transparency and international cooperation.

What solutions would you recommend at this stage of the phenomenon, which could already be used in Ivory Coast?

To fight against the phenomenon, here are a few solutions that could be considered in the context of Côte d’Ivoire:

  1. Awareness-raising and education: Before, during and after the CAN, raise awareness among sports players, punters, the media and the general public of the risks associated with illegal sports betting, money laundering and illicit financial flows. Set up educational campaigns to promote sporting integrity.
  2. Strengthen regulation: Adopt and implement strict laws and effective regulations on sports betting to prevent match manipulation, money laundering and other illicit activities. Ensure rigorous enforcement of these regulations.
  3. Capacity reinforcement: Invest in training and capacity building for law enforcement agencies, sports betting regulators and other stakeholders to better understand, prevent and investigate illegal activities.

If expert studies find that a residual tax of 25% (the General Tax Code 2023 speaks of a tax of 15% destined for the Communes) is largely underestimated, civil society can advocate a review of the tax structure to ensure that revenues from sports betting are fair and sufficient. It can also call for a regular assessment of the tax’s regulatory function, in line with the needs of the public interest and the evolution of the market.

  1. Accumulated sports betting monitoring: Set up effective monitoring mechanisms to track unusual betting patterns that might suggest match manipulation. Although Ivorian authorities keep the 1XBET site suspended or banned, collaborate with gambling operators like LONACI (including sports) to share information and quickly detect suspicious activity.
  2. International cooperation: Collaborate with other nations, international sports organizations, and regulatory bodies to share information, implement best practices and combat money laundering on a global scale.
  3. Financial transparency: Encourage financial transparency within sports organizations, particularly national federations, to prevent corruption and ensure that funds are used legitimately.
  4. Collaboration with civil society organizations: Involve civil society in the process by encouraging the active participation of non-governmental organizations (NGOs), independent media and other civil society actors to monitor and report suspicious activities.

8.Whistleblower protection: Put in place mechanisms to protect whistleblowers who report cases of corruption or illicit activities in the field of sports betting.

These measures should be implemented in a collaborative manner with the active participation of all parties involved.

So, do you think that the decision by the Ivorian authorities to ban 1XBET is a viable solution in line with this logic, or is it just a smokescreen?

The decision by the Ivorian authorities to close down a sports betting site like 1XBET can be seen as a measure aimed at strengthening the regulation of the sports betting sector and combating possible illegal activities, including money laundering. However, the effectiveness of this measure depends on a number of factors, including practical implementation, supervisory capacity and cooperation with the parties concerned.

In other words, if the 1XBET interdiction is part of a broader strategy to strengthen the regulation of sports betting in general, it could help create a more transparent environment and reduce the risks associated with illicit activities. We have learned that regulations are converging towards LONACI, which should ensure that gambling, including sports betting, is carried out transparently and responsibly.

It is important that the interdiction is applied consistently and fairly to all players in the sports betting sector, to avoid discriminatory treatment and ensure fair competition.

Prohibiting a site may be one step, but it is also important that the authorities put in place alternative measures to oversee and regulate the sector as a whole. This could include the adoption of stricter regulations, ongoing monitoring of betting operators, and raising public awareness of the associated risks.

Given the cross-border nature of online sports betting, cooperation with other jurisdictions and participation in international efforts can strengthen regulatory capabilities and help prevent money laundering.

The Ivorian authorities should communicate transparently on the reasons for the ban and the measures taken to improve the regulation of sports betting. Open communication can help build public confidence and dispel any suspicions of opacity.

Ultimately, to determine whether this measure is a viable solution, it would be necessary to monitor the evolution of the situation, the effectiveness of the measures put in place, and assess whether they contribute effectively to protecting the integrity of sport.

Apart from money laundering, sports betting presents two other problems in Cameroon: regulation and taxation. On the first point, warnings for holders of concession contracts are set at 50 and 100 million FCFA, with no mention of actual ownership and no questioning of the origin of the funds. As for the second, we are not aware of any provisions in the Finance Act for the 2024 financial year that regulate this aspect. Since 2017, there has been talk of a residual tax of 25%, largely underestimated according to some experts. How do you position yourself, as a civil society organization, in relation to this loss of revenue for Cameroon?

It’s fair to say that gambling operators, which include sports betting, are subject to corporate income tax. We can now question the regulations on the transparency of sports betting, including the setting of sureties for holders of concession agreements.

Questioning the origin of funds is also essential for civil society organizations towards concession holders. This can help prevent money laundering and ensure greater integrity in the sports betting sector. In the same way, the transparency requirement must be addressed as part of the implementation of beneficial ownership or beneficial profit disclosure.

If expert assessments show that a residual tax of 25% (the 2023 General Tax Code refers to a tax of 15% to be paid to the Communes) is largely underestimated, civil society can advocate a review of the tax structure to ensure that revenues from sports betting are fair and sufficient. It can also call for a regular assessment of the tax system’s regulatory function, in line with the needs of the public interest and market developments.

In short, civil society can help ensure transparent, fair and accountable governance in the sports betting sector by advocating robust regulations, fair taxation and judicious use of the revenues generated. It can also promote citizen participation in the decision-making process to best represent the interests of the population.

What other message would you like to pass on to FIFA, CAF, sports federations, governments and young Africans to ensure that the Ivorian edition of the CAN is a success, free from match-fixing, corruption and money laundering?

For a successful Ivorian edition of the CAN 2024, free of corruption, match-fixing and money laundering, here are a few points to highlight in the key messages:

To FIFA and CAF:

  1. Strengthen monitoring mechanisms: Encourage FIFA and CAF to strengthen their monitoring mechanisms to detect any suspicious activity, including match manipulation and illegal betting.
  2. International collaboration: Call for close cooperation between FIFA, CAF and national authorities to share information, implement security protocols and ensure transparency.3. Deterrent measures: Encourage the imposition of severe sanctions to deter those involved in illegal football-related activities.

To sports federations participating or not in the CAN 2024:

  1. Integrity of competitions: Stress the importance of encouraging and preserving the integrity of competitions and implementing robust security protocols to protect players, referees and the image of the sport.
  2. Financial transparency: Call for greater financial transparency within sports federations, with rigorous accountability to ensure funds are used legitimately.

To governments:

1.Strong legislation: Encourage the adoption of strong legislation to regulate sports betting, set high ethical standards and prevent corruption within the sporting world.

2.Inter-institutional cooperation: Promote collaboration between different government institutions, law enforcement and regulatory bodies for a coordinated approach against corruption and money laundering.

 

To African youth:

  1. Promotion of sporting values: Encourage young people to embrace the values of fair play, honesty and respect in sport.

2.Risk awareness: Campaigns to educate young people about the risks associated with illegal betting, match manipulation and criminal activities, highlighting the negative consequences for sport and society.

3.Civic engagement: Encourage citizen participation as a force for vigilance, encouraging young people to report any suspicious activity or corruption related to sport.

In short, the key message would be to promote a collective and multidimensional approach, involving international bodies, sports federations, governments and youth, to ensure a successful edition of the CAN, free from illegal practices and beneficial to the development of soccer. in Africa.

Interview conducted by

Théodore Ayissi Ayissi

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