With the Rio Olympics just weeks away, there are still many anxious questions to be answered. A political and economic crisis has engulfed Brazil. The country’s president has been suspended on charges of corruption. The police are on strike. The mosquito-born Zika virus is scaring off the athletes. Will the city be ready? Will the Russians be allowed to participate? Will Brazil have to play Germany at soccer again?

 Rio 2016 Olympics Sports Betting Could Break Records

Place Your Bets: The Olympic Games in Rio are just a few weeks away and the betting markets are expected to be huge. (Source: insidethegames.biz)

We can be fairly sure of one thing, though: the betting markets on the 2016 Summer Olympics will be huge. Four years ago, at the London Olympics, the UK sports betting sector handled some £80 million during the two-week period. That’s compared with £4 million from the Beijing Games.

Of course, these figures show how vitally Brits were engaged, as host country, by the proximity of the Olympic Games, but it also points to the extraordinary growth of sports betting over the last decade, as well the fact that there’s nothing quite like a giant global sporting event to get people betting.

The World Cup, of course, is by far the biggest betting event in the known universe, and the 2014 tournament in Brazil was the biggest ever. The UK industry alone handled over £1 billion on the event, with William Hill reporting a record 22 million individual bets through all its channels.

New Blood

Global sporting events, it’s fair to say, are the bookies’ delight, and in the years they do not occur their absence leaves gaping holes in annual financial reports.

This is because of their ability to emotionally engage people who do not habitually follow sports, and, more importantly, people who don’t usually make bets. A survey by the bookmaker Coral just prior to the London Olympics found that 3 million people said they planned to place their first ever bet at the games.

Usain Bolt Breaks 100 meters world record at London Olympics

Not much time for in-play betting when this guy’s around. Usain Bolt sets the 100 meters world record at the London Olympics. (Source: dailymail.co.uk)

Betting ramps up the customer’s engagement level in the spectacle, and, when it comes to global sporting events, the recreational bettor tends to go with his heart rather than his head and bet patriotically. Before the recent Euro 2016 soccer tournament William Hill said that it expected to handle around £500 million on the event, with some 20 percent of all bets going on England for outright winner, reflecting its large UK customer-base.

Needless to say, this serves the UK industry very well when every soccer tournament comes around, as England predictably go crashing out in the group stages / Round of 16 / Quarter Finals / delete as appropriate. Should England ever win a major soccer tournament again it would be an absolute disaster for the UK bookmaking industry.

The Betting Landscape

This year’s Olympics is unlikely to overshadow the World Cup, or even Euro 2016, in betting terms, but it does have a good chance of challenging London 2012, and that has everything to do with the rise in popularity of sports betting. In the years from 2011 to 2014, gross gambling yield (the amount won minus the amount paid out) has risen steadily in the UK, with the exception of a tiny dip in the 2013/14 fiscal year, which didn’t witness a global sporting event.

This rise has been driven largely by mobile and its upward trajectory broadly mirrors the rate of mass smartphone adoption. Betfair announced last year that mobile now accounts for 70 percent of all its betting business. Technology and innovation, such as the rise of in-play betting, have increased customer engagement and added greater liquidity to the betting markets.

It’s now easier to make a bet than ever and the range of bets to choose from is staggering, from the amount of goals, yellow cards or corners in a soccer game, to double faults or aces in a tennis match, while live feeds update the bettor on every possible statistic and even stream the event live to your device.

Having said this, we’re not sure there’s much scope for in-play betting during the nine-odd seconds it takes to run the men’s 100 meters final, which, incidentally, is expected to be the most widely bet-upon Olympic event this year, as it was in 2012.

But do expect there to be a wide range of esoteric betting markets on the games in Rio. At the London Olympics, for example, bookies were offering odds on which athlete would attract the most Twitter followers during the games. William Hill, meanwhile, offered 1,000-1 against a UFO turning up at the opening ceremony, far shorter odds, incidentally, than you could have got on Leicester City winning the English Premier League at the beginning of last season.

Global Markets

Of course, we’ve looked largely at the British betting sector so far because, as a matured, liberal, regulated market, it throws up some of the most meaningful statistics. But it’s worth mentioning that by far and away the most money bet on the Olympics this year will be conducted through unregulated markets, and therefore the figures are unknown and unknowable.

Estimates of the size of the unregulated global betting markets vary wildly depending on who you talk to, but everyone agrees they are huge. Independent betting expert Patrick Jay recently told a meeting of the UN office on Drugs and Crime that they could be worth as much as $3 trillion per year, although more conservative estimates put the figure at $450 billion. Much of this illegal gambling occurs in East Asia, where sports betting is largely illegal, despite the huge demand.

More than 4,000 people were arrested worldwide and over $13 million (£9.8 million) seized across Asia by police targeting illegal gambling during Euro 2016, and it’s reasonable to expect a similar gambling crackdown during the Olympics.

The extraordinary liquidity coupled with complete unaccountability of these unregulated markets leads to anxiety about the possibility of match-fixing whenever any big sporting event comes around. The risk at the Olympics is thought to be relatively low, as illegal gambling syndicates prefer to avoid suspicion and target games that aren’t scrutinized by global TV audiences, often lower level soccer and tennis.

What Do You Want, a Medal?

The scandal that engulfed women’s badminton at the London Olympics, where eight players from four teams, including two Chinese world champions, were thrown out of the games for attempting to lose deliberately, was not thought to be linked to a sports betting scam. Instead, it appears the top Chinese team attempted to throw the match for tactical reasons, in order to avoid playing the Chinese number-two team in the following round. Their opponents then tried to subvert the Chinese plan by playing even worse, as the audience looked on and booed.

Chinese badminton match-fixing, London 2012

Chinese badminton players were accused of match-fixing in London 2012. (Image: dailylife.com.au)

But, as the scandals that have rocked the world of professional tennis recently have shown us, there is always a chance that match-fixing might occur, and all eyes will be on the tennis players, in particular. The European Sports Security Association recently revealed that a startling 83 percent of all suspicious betting in the second quarter of the year involved tennis.