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The fight against illegal gambling

the-fight-against-illegal-gambling

In his new column for Yogonet, iGaming industry consultant Ron Mendelson shares details of the negative effects illegal gambling has, and how the regulating authorities across the world have tightened their restrictions throughout 2021 to fight against illegal gambling. Finally, he goes on to advise operators on what they should do and explains how important it is that they stay compliant with the established norms.

Illegal gambling, whether it takes place online or offline, relates to any form of betting or gambling that takes place when the operator is not authorized to do so. This could be for various reasons, such as gambling being illegal in that jurisdiction or because they operate without a license. Some illegal gambling operators use proceeds of crime to funnel through such entities or avoid taxes with the profits they take from players. Illegal gambling comes in many forms and motivations, but the negative impacts are the same across the board.

Firstly, illegal gambling impacts players. When an operator is licensed, they are obliged to meet specific standards. For example, not offering services to underaged players, authenticating identity, ensuring fair games, and offering recourse with complaints are just some of the benefits of using a licensed and legal gambling operator. With illegal sites, players have no way of getting a solution if anything goes wrong. Furthermore, their data including name, ID documents, and even card details, could be at risk.

Secondly, illegal gambling impacts legitimate operators as authorities and regulators seek to crack down on illicit activity. Obligations become tougher, monitoring more intense, and scrutiny on the sector increases overall. This can make the bureaucracy around operating a legitimate site costly and time-consuming for operators and even put some off. Furthermore, the prevalence of illegal sites and negative experiences will damage the sector’s reputation, making players less likely to bet. This will ultimately harm revenue and risk the industry losing potential customers.

Key moments from 2021

One of the most significant moments from the last year was INTERPOL’s arrest of over 1,400 suspects in Asia and Europe for involvement in illegal gambling and betting. As a result of multiple operations, more than $7.9 million was seized, along with equipment used to facilitate some $465 million in illegal bets. Some 28 countries were involved in the action, including Hong Kong, Singapore, Italy, and Malta.

In China, authorities stepped up their fight against illicit online betting with the arrest of tens of those suspected to be involved. In Macau, police arrested 11 people allegedly involved in illegal cross-border gambling, including a well-known iGaming magnate. 

Australian gambling authorities also acted by blocking websites they identified as driving traffic towards online casinos. In the first-ever action of its kind, the Australian Communications and Media Authority asked some internet service providers to block affiliate sites, particularly those that publish supposedly independent reviews of various gambling activities.

Similar mass-anti illegal gambling operations, for both online and offline, were carried out in Austria, the Philippines, various US states, Poland, and the UK. 

Then, at the end of 2021, the American Gaming Association called on the Department of Justice to crack down on those manufacturing illegal gambling machines. Drawing attention to the “issue of unregulated gambling”, they implored the authorities to work towards eliminating illegal gambling devices from communities.

Other countries worked to combat the phenomenon by introducing new legislation or announcing reviews of existing laws. For example, the Norwegian government presented a new law that would ban websites that offer gambling to the local market. DNS-blocking orders could be issued if operators offer services locally without a license. In addition, the UK announced upcoming changes to the Gambling Act, Germany issued its first foreign licenses, along with Buenos Aires, the autonomous capital of Argentina.

These are just some examples of the crackdown on illegal gambling, both online and offline, in 2021. 

What can you do as an operator?

As an operator, you need to be a part of the solution, not the problem. This means getting an online gambling license and complying with its requirements. While each jurisdiction has different rules, these can include conducting KYC and DD on customers, having proper supervisory processes in place, remaining compliant with AML/CFT rules, and submitting to monitoring and periodic reporting. 

Staying compliant and on the right side of licensing laws will help bolster the sector’s reputation. It will also make you stand out against other, less reputable sites. Other tips for boosting your image include displaying licensing information on your website, providing multiple customer service channels, and offering self-exclusion and support to those that need it. 

Fast Offshore has worked in the online gambling sector for 24 years. We work only with legal and licensed entities and have helped countless companies get their license and stay compliant. Our portfolio of services includes company incorporation, license acquisition, structuring, payments, and ongoing maintenance. To find out more, contact Fast Offshore without delay.

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