The Offshore Game

One of the more startling developments in recent years has been the takeover of football clubs by owners who would not, on the surface, have any interests in the sport.

We are not specifically concerned here with private equity companies, bookmakers and offshore beneficial ownership schemes but rather with ownership emanating from specific industry sectors e.g. the oil industry.

We are also interested in the territorial, business and black market cooperations between these new breed of owners and a global network of competing criminal enterprises, gangs and syndicates.

Recently, an oil company chief executive with links to the underground betting markets has been assessing the purchase of a leading Premier League club. As the oil price has plummeted, this CEO (wearing his oilman's hat) seeks oil market sector consolidation. But the gambling side of this future operation is entirely unaffected by the current market conditions for oil. The two sectors are not correlated in any manner whatsoever.

This is a primary reason why numerous mainstream sectors seek out football club ownership - global financial returns move in lockstep holistically but football leagues are something else entirely.
A secondary reason for the ties being established is that football matches are linked to very liquid global betting markets that are hyperreal in their structure i.e. insiders and matchfixing consortia are able to fix match outcomes to warp the global markets for significant proprietary gain.
The third reason for the takeover of football clubs is inversion capitalism and the financialisation of what were community-based football clubs into entities to promote efficient yet illicit flows of monies via Offshore Financial Centres (OFCs).
The fourth reason for the presence of oil companies is diversification. If Peak Oil is real then oil companies must think outside the box regarding future flows and profits.
The fifth advantage for oil companies is creative hedging of risk - many football markets share parallels with futures and options markets and strategies may easily be transferred. Additionally, the very liquid global betting markets are voluminous enough to accommodate the hedging of mature sector entities.

When clubs as diverse as Hartlepool United, Hamilton Accies and AFC Bournemouth are owned by or sponsored by oil executives/companies, there is evidently a pattern to be found in the data.

The oil industry is conversant with many of the infrastructures that have developed around the football industry in the last two decades - monopolies, cartels, fragmented cartels, black market operations etc.
The leap from price-fixing to matchfixing is but a small bound - once one has sold out to antisocial speculation, the move to abusive market control is always likely to be more tempting.

Additionally, the modes of powerplay and market abuses associated with a competitive oil market price established by a fragmented cartel are very similar structurally to the setting of market prices in football matches where global underground and Dark Pool operations establish the prices on offer based on key parameters that are absolutely not in the public eye (or interest).

Historically, as market sectors aged, they matured towards monopolistic/duopolistic/fragmented cartel structures e.g. the Big 4 accountancy firms but inversion capital is leading to a wider consolidation not only within a sector but also between loosely associated sectors. The integration and dovetailing of these operations is accommodated by the similarity in structure and form.

There is an absolute parallel between strategies in mature oil sector and in the maturing football sector.

Over the last quarter century (and even longer in South Asia), numerous global underground groups have exerted malicious control over the integrity of sporting events.

The Dawood Company (cricket matchfixing globally from their base in Dubai) and football operations like Sun Yee On (China), Ah Kong (Singapore), Luen Group (Hong Kong), Ghao Pho (Thailand) and Kuratong Baleleng (Philippines) have incorporated gambling operations into criminalised entities of far greater stature. The full range of illegalities (murder, smuggling, bribery, corruption, drug trafficking, extortion, film finance, gunrunning, contract killing, money laundering, counterfeiting and even terrorism in certain cases) run alongside allegedly legitimate businesses like real estate and bank overhaul transactions.

These underground operations have since morphed into real betting businesses located in selected OFCs with structures that are entirely akin to the Dark Pool/Public Markets model that exists in more legitimate bookmaking operations.
The consolidation then continues with linkages developed between the public entities of variable background (for instance the one between Victor Chandler International in Gibraltar and Thai bookmaker 138.com - Chandler were the first European bookie to enter Thailand in the mid-nineties under control of current Brighton and Hove Albion owner, Tony Bloom).

The complete graphic dynamic of the consolidated sector is highly complex.

a) Asian bookmakers matchfixing in both underground and legitimate markets and hiding their illicit gains via proxy OFCs globally (Chinese bookies utilise British Virgin Isles, for example).
b) European bookmakers matchfixing in both Dark Pool and legitimate markets and utilising a different set of OFCs for money laundering.
c) Club ownership structures that avoid tax via the utilisation of a variety of complex ownership arrangements in OFCs globally.
d) Football agents behave in exactly the same manner as above but choose OFCs that are suitable both culturally and financially.

Agents, as lubricants to all phases of the corruption process, provide us with another aspect of the solution.

Corrupt infrastructures are similar to water flowing down a hill. Given the various obstacles in place, there is always a preferred route for the liquid to flow. Over time, these chosen routes become river beds and exceptional circumstances (meteorological or geological) are needed to upset this status quo.

And so it is with corruption in football.

Whether football is being corrupted by matchfixing, illegitimate ownership structures or criminalised agents, the one feature that exists in each case is illicit money flows in OFCs.

The Offshore Game is a project under the auspices of the Tax Justice Network which will be launched in the near future to address these issues.
All illicit money flow participants have a preferred route of laundering and will persist with such proxy flows for a range of robust reasons.
The Offshore Game, if successful, will make incremental gains against these corruption flows making it markedly more difficult for the launderers to wash their money easily.
The Offshore Game will also improve the integrity of football by putting the matchfixers and rogue owners on the defensive.

And, although football can never be football again, it will hopefully become more than the illegitimate love child of horseracing and poker that it has become.

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