Qatar’s plan to host the 2022 World Cup might be in jeopardy after the head of soccer’s international governing body, Joseph “Sepp” Blatter, said he would resign.
The odds on Qatar, a country about the size of Connecticut, losing rights to the world’s most-watched sporting event were slashed to 5-4 from 5-1 on Tuesday at U.K. bookmaker William Hill. That means a successful $4 bet would return $5 plus the original stake. William Hill set odds of 4-7 that it still takes place in the desert state.
Qatar is spending about $200 billion on infrastructure for the event. The selection stirred controversy because of the country’s limited soccer tradition and the extreme temperatures in the June and July period when the tournament is usually held. Blatter’s FIFA changed the dates, which will force major leagues in Europe to change their schedules. Qatar has also been criticized by rights groups over the conditions for migrant workers building the new stadiums.
Swiss prosecutors have opened a probe into the awarding of the 2018 and 2022 tournaments to Russia and Qatar respectively, after a U.S.-led investigation that focused on alleged corruption in earlier decisions over venues.
“The big issue now is if the event doesn’t happen in Qatar,” Bloomberg Intelligence analyst Sonia Baldeira said in an interview before Blatter’s announcement. “Many infrastructure projects that have already been awarded can be at the risk of being canceled or delayed.”
Qatar’s benchmark QE Index for equities dropped 4.1 percent in the two days after the FIFA probe was announced last week, with declines driven by real estate and bank stocks. Shares recouped most of the losses this week, and rose 0.1 percent on Tuesday.
A spokesman for the Qatari committee in charge of World Cup preparations declined to comment on Blatter’s resignation and said it was a separate issue from hosting the tournament. The committee said in a statement on Friday that it “fully complied” with investigations of the World Cup bidding process and plans to host a “successful” tournament in 2022.
Blatter was re-elected to a fifth four-year term as president of FIFA last week but said Tuesday he will call a special congress sometime between December and March to elect his successor.
The organization has been under scrutiny after U.S. authorities unveiled a criminal investigation into bribes and tax issues of several FIFA executives with a raid on a Swiss luxury hotel last week.
Qatar’s plan includes at least eight new stadiums and a $35 billion metro and rail system. New highways are being laid and a city for 200,000 people is rising north of Doha, the capital.
Slowing the pace of construction and scrapping plans for expensive stadiums that won’t be needed after the championship may create “efficiencies” that benefit Qatar, according to John Sfakianakis, the Riyadh-based director of the Middle East at Ashmore Group Plc.
“Losing the World Cup wouldn’t have a catastrophic impact on the economy,” Sfakianakis said before Blatter’s decision. “Qatar will still need to spend on infrastructure, but instead of doing it by 2022 it can do it by 2030.”