"I don't want it in cricket I think it is terrible, disgusting," Waugh told reporters on Monday at the Laureus sports awards in Barcelona on Monday.
"But what do you do to stop it? I don't think the ICC (International Cricket Council) or anyone knows how to stop it or it would have been stopped before.
"They formed a committee years ago and nothing too much seems to have changed.
"Really it's about the players, they have to put their hands up and say I'm 100 percent or sign declarations but something has to be done because it is damaging the sport. Something serious has to happen now or the game will be damaged for ever."
The cricket World Cup in the Caribbean has been overshadowed by the death of Pakistan coach Bob Woolmer, who Jamaican police say was strangled.
Speculation has been rife that his death more than two weeks ago could be linked to match fixing.
Waugh said that it would be wrong to believe that the problem was just confined to Pakistan.
"It would be pretty naive to say it was just one or two countries. I don't know who is involved but the odds are it is more than one or two countries.
"With security for players and coaches such a live issue, Waugh said he would not advise the Australian team to tour Zimbabwe later this year.
Australia has long been a vocal critic of Zimbabwe President Robert Mugabe and question marks remain about whether the tour will go ahead in the light of the political violence in the country.
"It's easy for me to say that because when you're a player it's your career and you don't want to get too involved in things like that," Waugh said.
"But I think it will be tough for them to go in that environment with what's happening in Zimbabwe. I've got the feeling they probably won't go.
"It's a difficult question for (captain) Ricky (Ponting) but I feel the Australian players probably generally feel they don't want to go. I might be speaking out of school, but I've got the feeling they think it is not the right think to do."
