L’Autorité Nationale des Jeux (ANJ), a gambling regulator from France, works hard to prevent illegal gambling in the country. The regulator recently warned all players about the fraud that is occurring in the industry: various illegal gambling operators use the brands of popular licensed operators to advertise their services on social media platforms, especially Facebook.

Risks for players

That way, even those looking to gamble legally can be tricked into placing illegal bets. Now, the regulator has joined forces with Meta to monitor and resolve the issue.

So far, ANJ has found about 400 illegal websites, which resulted in 137 user accounts on Facebook being blocked. The main operators that were used for illegal operations were Barrière and JOA groups. The profiles of these operators have been created and their brand image was used to attract potential customers to the illegal website. They also created mobile apps that players were led to from Facebook images.

Online casinos aren’t legalized in France. However, some operators are allowed to offer online sports betting and horse racing betting services to French players. Also, land-based casinos that have appropriate licenses are also legal.

According to ANJ, players are at huge risk due to betting on illegal sites. They risk not being paid when they win, as well as various payment frauds and the risk of stealing personal data.

The regulator commented: “If in doubt about the legality of the gambling site on which you are about to bet, consult the list of sites approved by the ANJ. You can also consult the blacklist of sites that have been administratively blocked by the ANJ. We invite anyone who notices the presence of fake advertisements to report them.”

Worth of illegal betting market

In December 2023, ANJ said that the illegal betting market in France was worth up to €1.50 billion (£1.28bn/$1.62bn), which is more than 10% higher than the wagered amount in the country on a yearly basis.

According to research conducted by ANJ, 510 illegal websites are active. About 60% of all traffic comes from 21 of them.

PwC published a study with concerning data: the gross gaming revenue illegal casinos earned is somewhere between €748m and €1.5bn, which is between 5% and 10% of total gambling in France. The record was set in 2022 when it was €12.9 billion.

Source:

“French regulator issues warning over illegal online casinos on Facebook”, igamingbusiness.com, January 31, 2023.

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An advertisement post for Buzz Bingo that contained cartoon Halloween imagery caught the attention of the Advertising Standards Authority (ASA), the regulator in charge of advertising in the UK. The post appeared back in October on Buzz Bingo’s Facebook page, promoting a campaign that promised £50,000 ($63,000) on Mondays throughout the month.

The animated footage included a full moon on top of a scene with pumpkin heads grinning. Moreover, the ad featured a church, flying bats, a spider and a tombstone with a cross in a graveyard. The advertisement’s text read “MONSTER MONDAYS – £50,000 MUST BE WON EVERY MONDAY IN OCTOBER” and it was written with a font that resembled slime. Along with the text, the advertisement included the logo of Buzz Bingo and “18+ – BeGambleAware.org” details.

Scrutinizing Buzz Bingo’s ad, the ASA sought whether or not the cartoon imagery using a Halloween theme was likely to appeal to children. Currently, the advertising rules in the UK prohibit any gambling content to appeal to children. In other words, gambling operators cannot use imagery, characters or personas that are likely to appeal to underage individuals.

According to the ASA, Buzz Bingo “acknowledged the concern that the Halloween imagery could appeal to children.” However, the operator stated that the advertisement was promoted via its social media page on Facebook which was restricted to users under 18. Additionally, Buzz Bingo explained that the advertisement in question targeted only audiences who were 25 or older and had shown interest in bingo games. “They therefore believed they had acted and had taken precautions to prevent children and young people being exposed to the ad,” explained the advertising watchdog.

The ASA Upholds Its Decision against the Operator

Despite the actions taken by the operator, the ASA upheld its decision. According to the watchdog, the ad in question breached the CAP Code rules related to gambling, 16.1 and 16.3.12. Moreover, the ASA reiterated the section of the code which states that gambling marketing materials “must not be likely to be of strong appeal to children or young persons, especially by reflecting or being associated with youth culture.” It said that under the rules animated graphics or other similar content may “contribute to the impression that material was designed to appeal to under-18s.”

Upholding its decision, the ASA said that Buzz Bingo’s ad must not appear again in the form that was observed previously. Additionally, the advertising watchdog urged the operator not to use imagery or themes that are likely to appeal to underage individuals. Upon receiving the query of the ASA, Buzz Bingo voluntarily removed the aforementioned advertisement.

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According to Australia’s ABC News, residents there are being targeted by at least one online casino through Facebook even though the operator has been formally warned not to solicit business there.

Australians are free to play wherever they wish with no fear of criminal penalties, but harsh civil and criminal penalties can be levied against operators that are not licensed there. No online casinos have been licensed since the law was amended to codify such penalties.

Several years ago, Facebook changed its policy of not allowing any entity to advertise online gambling services on its platform to allow “authorized gambling partners”. For a company to be considered for “partnership” it is purportedly required to show that its advertising is lawful in the target market.

BTC Casino Finds Ways to Reach Australian Customers

The online gaming site behind the controversy is Bitstarz, one of the first and most successful BTC casinos online. The Australian Communications and Media Authority (ACMA) found in 2021 that BitStarz provided a “prohibited interactive gambling service” to Australians and the authority issued a formal warning to the company.

Since the Gambling Act Amendment of 2001 was given prosecutorial teeth in 2017, the ACMA has blocked over 700 websites from appearing on the internet for residents with Australian IP addresses.

For some background, Facebook advertisers are given access to a backend system that allows them to create a variety of metrics in order to target ads to highly specific groups of users, including particular regions. In an effort to stem the tide of misinformation targeting specific users, viewers are able to bring up information about “why am I seeing this?” and one of the metrics identified by the news outlet was a direct target of viewers in Australia.

According to the report, the ads also included images of the Australian flag, “leaving little doubt about the intended audience.”

Professor Daniel Angus, from the Queensland University of Technology, is a chief investigator for the Australian Ad Observatory – a project run by nine Australian universities.

“Meta needs to do a whole lot more here,” Professor Angus says. “There are several civil society organizations, universities, and others, regulators indeed, who would be willing to help them come up with stronger protections … to ensure these kinds of ads don’t make it out into public.”

“If I was a regulator, I would certainly be asking Meta [Facebook]

.”

Australian Broadcasting Corporation (ABC) is an Ad Observatory project partner as well as the national broadcaster of Australia. It is funded by direct grants from the government and administered by a board appointed by the government.

Does Facebook Actually Breach Australian Law?

In most countries, including Australia, the US, and other large markets, Facebook enjoys certain potential immunities from prosecution or other liability as it is considered a “platform for ideas” rather than a publisher. So, while Bitstarz would appear to be directly violating Australian law, it is much more difficult to determine whether or not Facebook is as well.

Whereas it would be clearly illegal for a radio or television company in Australia to air such ads, “there’s a bit of a loophole when it comes to the digital media platforms that are based overseas in the US,” said Professor Christine Parker from the University of Melbourne law school, a participant in the Australian Ad Observatory.

Dr. Charles Livingstone, a gambling researcher at Monash University argues: “If ACMA doesn’t have the power to block these ads or take them off, then I think the reality is that we have to give them that power,” according to the report.

Most national regulators that block residents from viewing “illegal websites” often use other tools of determent as well such as France delisting online casinos from search engines like Google or even prosecuting financial service providers when they assist in deposits or withdrawals. Australia is also one of the very few outside of the Muslim world that doesn’t hold a monopoly or a revenue-positive benefit through taxes or other financial incentives to steer residents away from unlicensed sites and through government-sanctioned casinos.

It doesn’t take much imagination or skill for Australians to get around simple ISP blocking, especially when an operator such as Bitstarz runs at least 8 website URLs “mirroring” the main site. In a report on the ACMA and French regulators earlier this week, we counted at least three operators in the French market that had about 50 different iterations each.

In markets with particularly harsh penalties where the operator might face prosecution if caught out, we’ve seen “rotating mirrors” with only about a dozen addresses out of several more dozen active at any given time – presenting a cat-and-mouse chase for regulators who are more likely to visit a “dead” websites as a “live” one at any given hour of any day.

“Some illegal online gambling services attempt to circumvent blocking by setting up alternate websites, but the ACMA continues to monitor for and take action against, such websites,” a spokesperson for the ACMA told the ABC.

Offshore Casinos Can Operate with Impunity

While regulators are not shy about issuing official warnings or using some of the tools at their disposal to deter Australians from gambling at unauthorized sites, even potential criminal penalties or civil penalties as high as A$10.3 million a day do not seem to stop offshore companies that are beyond the reach of local prosecutors.

According to the ABC, Bitstarz‘s parent company, licensed in Curacao, has been issued 48 formal warnings by the ACMA for breaching the Interactive Gambling Act. According to one affiliated website, the company runs as many as 70 different core labels, white labels, or online storefronts before and that number is before counting any variations on the URL, obfuscating iterations, or mirrors.

An online gambling inquiry by parliament is currently underway and expected to be completed and handed down later this year. One inquiry focus will reportedly be the effectiveness of Australia’s current efforts to keep residents away from unlicensed gambling websites.

Source: Online casinos based offshore are illegally targeting Australians on Facebook. Who is responsible? The ABC, March 21, 2023

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