Tag: world cup

Odds of Qatar Hosting the World Cup Slashed After Blatter’s Resignation

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.”

Separate Issue

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.

Not ‘Catastrophic’

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.”

Source: Bloomberg


The surprising reason the US is prosecuting the FIFA case

Source: VOX

The United States is pursuing corruption charges against 14 current and former officials from FIFA, the global governing body for international soccer, federal prosecutorsannounced Wednesday.

There is some irony in the fact that this case is being brought by US federal prosecutors. The United States is famously uninterested in soccer, which lags behind (American) football, basketball, and baseball in popularity. So what’s this case doing in a Brooklyn court?

Part of the explanation is that many US federal laws have a global sweep — especially those that involve financial wrongdoing. As long as there is some “nexus” with the US to provide jurisdiction, such as the involvement of a US financial institution or a US citizen, then US attorneys often can and do prosecute wrongdoing that took place primarily overseas. For instance, in 2014 former Guatemalan president Alfonso Portillo was sentenced to six years in US federal prison for laundering money through US banks. The corruption at the core of the case took place in Guatemala — Portillo was accused of using the office of the president as his “personal ATM” — but the nexus with US banks was enough for him to be prosecuted by US courts.

That’s why the indictment focuses so much on what it refers to as the “centrality of the US financial system” to the alleged crimes: the use of US financial institutions gives prosecutors jurisdiction to prosecute the cases.

But the FIFA case actually has much stronger connections to the United States than one might have guessed.

The New York Times reports that the indictment was built on information obtained from former FIFA executive Chuck Blazer — a US citizen. Blazer, who was the general secretary of CONCACAF, the regional organization governing soccer in North America, Central America, and the Caribbean, secretly pleaded guilty in 2013 to charges including wire fraud, racketeering, money laundering, and tax evasion. Bloomberg describes him as a “former Westchester soccer dad.” Several other defendants are US citizens. And one of the corporate entities that already pleaded guilty is a US company, Traffic Sports USA.

CONCACAF  has its principal administrative office is in Miami. And soccer is growingmore popular in the US, which has raised the value of the marketing rights that were obtained through bribes.

In other words, this isn’t just a case of a federal prosecutor aggressively targeting conduct overseas. This is a case in which US individuals and a US company conspired to commit crimes with foreign co-conspirators, using US financial institutions, in order to exploit US and foreign markets. Viewed through that lens, it’s not surprising that the Justice Department decided that this was a good use of US federal resources.