Money for sports clubs in Wales is being diverted to fund training facilities elsewhere in the UK, a BBC investigation has found.
Cash for grassroots clubs is being diverted to develop training centres around the UK, the Week In Week Out programme found.
Despite claims to get people more active, no new sport facilities in Wales are planned by the Olympics.
But organisers say there will be a legacy fund of £40m after the event.
Lord Sebastian Coe, chairman of the organising committee of the London 2012 Olympics, said there would other benefits.
"It's very important there is a softer legacy as well," he said.
"It's about coaching, it's about parental involvement, it's about using sport as a bridgehead into educational and cultural values."
But according to Dr Calvin Jones, an expert on the economics of major sporting events, no Olympic city or nation has managed to see a growth in participation levels.
Dr Jones, from Cardiff Business School, said: "In Sydney, Barcelona, in Athens, no Olympic City or nation has seen any upward swing in participation levels, in Olympic or non-Olympic sports following hosting of the games."
"Not a single sporting event has ever been shown to have a long-term economic benefit for the country or region in question that hosted that event"
The cost of the Olympics has risen from £2.4bn to £9.3bn, with extra cash coming from the public purse and the National Lottery.
Lord Coe said the Olympics was a "UK-wide project".
Lottery funding
It is estimated that Wales is losing £70m of National Lottery funding for good causes, according to recent reports.
Guy Roderick, of Wyeside Arts Centre in Builth Wells, said the rising costs of the Olympics was having an impact on existing organisations.
"Wyeside is 30 this December and we're not sure if we can make it stay open until our 30th birthday," he said.
"I think a lot of arts organisations like us are going to be facing a much tougher future because there's going to be less and less money."
The Arts Council for Wales has seen £8m of its lottery grant diverted to pay for the Olympics.
But it is expected Wales will benefit in other ways such as staging some of the Olympic football matches at the Millennium Stadium in Cardiff and by providing training facilities for athletes, for example.
But Dr Jones said: "Not a single sporting event has ever been shown to have a long-term economic benefit for the country or region in question that hosted that event.
"I think lots of quite clever people in sports consultancies, marketing companies and sports organising bodies have become very adept, very clever at getting lots of money out of the public sector on the basis that there will be long-term benefits that will never be actually measured," he added.
Week In Week Out is on BBC1 Wales at 2235 BST on Tuesday.
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