Game Over - UNODC Report Sport Corruption and Money Laundering

It is nothing new that the sports sector, and in particular the professional football sector, is gradually becoming the focus of attention when it comes to preventing money laundering*.

A highly interesting report by the United Nations Office on Drugs and Crime (UNODC) now also shows how strong the links between sport and organised crime can often be and how criminal networks exploit precisely this sector in order to launder the illegally obtained proceeds.

Why is the football sector particularly attractive for money laundering?

According to a FATF report, which only refers to money laundering in the football sector (FATF, Money Laundering through the Football Sector), the structure of football clubs is already vulnerable to being exploited for money laundering. The structure is easy for criminal groups to penetrate, as there is often a lack of strict regulations. Football involves significant flows of money, particularly through high-value transfers, which makes the sector an attractive target for money laundering activities. Culturally, football's image as an "innocent sport" reduces the likelihood of management reporting suspicious activity, which further facilitates money laundering. The unpredictability of the sport and the potential for massive profits from transfers and talent development also contributes to the tolerance of irrational payments and increases the risk of financial crime.

This entanglement between football and money laundering is also addressed again in the new report. According to the UNODC, the transfer of athletes, primarily the trafficking of young football players, is often used to facilitate trade-based money laundering (TBML). The number and value of transfers are high, and the often opaque financial structure makes it possible to conceal illegal funds. This particularly affects football academies and tournaments, which can be easily infiltrated due to their less stringent regulation and lower public profile. Statistics from the Fédération Internationale de Football Association (FIFA) show that in the 2022/2023 football season, 10,000 transfers were only made up to the middle of the season, generating agent fees totalling 696 million US dollars.

While football continues to be the sport most affected by organised crime, the activities of criminal groups are also increasing in other sports, particularly boxing, tennis, table tennis and basketball.

Other methods of exploiting sport for money laundering

The manipulation of sports competitions and illegal sports betting, especially via unregulated online platforms and through disguise using cryptocurrencies and prepaid cards, are still a frequently used way of laundering money, according to the UNODC report. Illegal betting is growing rapidly and accounts for almost two-thirds of the global betting market. As such, they are a significant source of income for organised criminal groups and undermine the integrity of sport.

Often, the majority of these activities are inconceivable without corruption. Officials from sports organisations are often the target of bribes and incentives from organised crime. Predominantly financially unstable sports organisations are particularly susceptible to corruption and are therefore often exploited, e.g. for competition manipulation.

Case studies sport and money laundering

The report presents various case studies. These include a few that illustrate how the sports sector is exploited for money laundering in various ways.

Operation Mursal was a Spanish-led, international investigation into a criminal network that laundered money through match-fixing. The perpetrators specifically manipulated third division football matches in Romania and a table tennis tournament in Eastern Europe. They used large satellite dishes to receive signals directly from the pitches and exploited the delay to analyse matches ahead of time. This allowed them to place accurate bets and realise high profits.

These illegal proceeds were then laundered through several bank accounts in Spain, all of which were linked to the main suspect. In the meantime, he was staying in Dubai and was eventually arrested and extradited to Spain, which illustrates the international dimension of the money laundering operation.

Recommendations to specifically prevent money laundering in sport

The report makes a number of recommendations to make it more difficult for organised crime to infiltrate the sports sector and thus also to prevent large-scale money laundering activities.

Increased international cooperation is of central importance. This includes greater information sharing through centralised databases and platforms that facilitate real-time tracking of suspicious betting patterns, financial transactions and other indicators. The report also proposes far-reaching disclosure requirements for all parties involved in player transfers, including financial conditions and details of third-party owners, in order to prevent covert transactions.

It must gradually become easier to recognise and apprehend criminal networks by tracking financial flows. This would require the development of advanced financial monitoring and reporting systems to track transfer payments in order to automatically recognise suspicious transactions.

You can find the full report here: UNODC Report

*In particular since this sector was included in the new EU Anti-Money Laundering Regulation (EU AML Regulation). Regulation (EU) 2024/1624 of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (EU AML Regulation), which means that certain actors will be regarded as independent obliged entities from 2029. To this end, we have our blog has already published a number of articles.