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Police said that Raza, who is now a first class umpire, and six others were arrested at a shopping mall in the upmarket Gulberg district during a late night raid on Saturday.
Police said the seven men were running a den that was taking bets on the Indian Premier League Twenty20 tournament in India.
“One of the arrested men has been identified as Akram Raza, a former Pakistan player,” an official at the Gulberg police station told reporters.
The 46-year-old, who played nine tests and 49 one-day internationals from 1989-95, is on the Pakistan Cricket Board (PCB) first class umpires panel and has supervised top matches.
Four years ago, several former players raised concerns over the board’s decision to name the former off-spinner on the first class umpires panel.
Their fears emerged after Raza was among six players fined by a judicial commission in 2000 for non-cooperation in a 18-month long inquiry into match fixing allegations surrounding the Pakistan team.
Police added that the seven men, from whom they had recovered cash, computers, mobile phones and telephone numbers, would appear before a magistrate on Monday.
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