Chris Cylke, vice president of government relations at the American Gaming Association (AGA), has pointed out that attractive promotions, better odds, and the ability to gamble with cryptocurrencies are some of the things that lure people into illegal gaming.

Illegal Gaming Threatens Consumers and Undermines the Legal Industry

Different aspects are included in illegal gaming such as offshore online casinos, unregulated slot machines and illicit sportsbooks. These hidden activities present significant threats to customers and undermine the legal gambling sector.

However, Cylke further noted how important it is to educate consumers about the risks associated with these illegal platforms, reported local media outlet Vegas Inc. According to him, illegal gambling is not a victimless crime as many believe. Users may expose their personal and financial details to unregulated entities which could be located anywhere since there is no oversight over them and customers do not know where their money ends up.

Legalized operators face stiff competition from such illicit operations which do not incur costs like getting licenses or paying taxes. In 2022 alone, reports indicate that illegal betting houses took in more than $510 billion worth of bets while legal establishments lost over $44 billion due to this unfair competition. The legalization of sports betting in numerous jurisdictions in the US has led to a decrease in illegal sports betting, but online casino gaming remains a major issue, with over $337 billion transacted illegally.

Illegal Sports Betting: A $13.3 Billion Tax Drain

Cylke reiterated on consumer education saying that sometimes individuals unknowingly visit sites considered illegal because they appear prominently on search engines. He further stated that some users knowingly choose these sites to avoid scrutiny, a practice that further complicates the problem.

Alan Feldman who is UNLV’s director of strategic initiatives highlighted the absence of consumer protection safeguards found within unauthorized gaming websites together with the fact that they do not pay taxes and thus deprive state coffers of revenues meant for local economies. An AGA report also pointed out that state governments lost $13.3 billion in tax revenue due to illegal and unregulated sports betting.

Feldman called upon all US states where gambling has been legalized to acknowledge the damage caused by unlicensed gambling establishments arguing that legalization of sports betting was primarily done with an aim to generate additional tax dollars for public use. Additionally, he mentioned that people affected negatively by illegal gambling rarely come forward thereby complicating matters even further.

To fight against the illegal gaming industry leaders are calling for stricter law enforcement coupled with creating awareness among the general public. Feldman cited Nevada as an example where they have employed GeoComply technology among others which help to identify and block unauthorized betting activities whilst Cylke commended the Michigan state government’s move of issuing cease-and-desist letters to major illegal sites.

The post How Illegal Gaming Operations Undermine the Legal Industry in the US appeared first on Keno Wizard.

The Commission for the Regulation of Gambling and Lotteries (KRAIL), Ukraine’s gambling regulator, has taken decisive action against illegal gambling activities in the country. Recently, KRAIL blocked 371 websites offering illegal gambling services as part of a joint effort with the Security Service of Ukraine. This move was formalized through Order No. 451/2256, which targeted the domain names of these unauthorized gambling sites.

The order mandates electronic communication service providers to block the specified websites using their Domain Name System (DNS) servers. Between April and May, KRAIL and the Security Service issued over 1,000 orders to restrict access to various domain names and subdomains on DNS servers, further intensifying the crackdown on illegal gambling operations.

Uncertainty Over KRAIL’s Future

KRAIL’s recent actions come at a time when the future of the regulator is in question. In April, the Verkhovna Rada, Ukraine’s parliament, voted to dissolve KRAIL after more than a year of contention over its effectiveness in regulating the gambling industry. The opposition to KRAIL’s operation stemmed from dissatisfaction with its regulatory performance, particularly its delays in processing license applications.

KRAIL is currently composed of a collegial body with a chairman and six members. Meetings are only valid if at least five members are present. However, some commission members were mobilized for military service following Russia’s invasion of Ukraine, causing significant delays in regulatory processes, including the issuance of licenses.

The legislative bill that includes KRAIL’s dissolution also proposes stricter measures on gambling advertising and other regulatory controls. This bill is set for a second reading, and if passed, it will become law upon the signature of President Volodymyr Zelenskyy.

Future of Gambling Regulation in Ukraine

Should KRAIL be dissolved, the responsibility for regulating gambling will be transferred to the Ministry of Digital Transformation. Alina Plyushch, a partner at Kyiv-based law firm Sayenko Kharenko, highlighted the uncertainty surrounding the future structure of gambling regulation. “This is pending a further government decision on the creation of a new regulator under the digital transformation ministry’s umbrella,” Plyushch said.

She also noted the possibility that the Ministry of Digital Transformation might retain regulatory functions indefinitely. The exact duration and structure of this transitional regulatory framework remain unclear, leaving the future of Ukraine’s gambling industry in a state of flux.

As KRAIL continues its efforts to combat illegal gambling, the impending legislative changes pose significant questions about the long-term regulatory landscape for gambling in Ukraine. The outcome of the legislative process and subsequent government decisions will determine the next steps for ensuring a well-regulated and compliant gambling market in the country.

Source:

“КРАІЛ про обмеження доступу до 371 вебсайту, через які надавався доступ до нелегальних азартних ігор”. The Commission for the Regulation of Gambling and Lotteries (KRAIL). June 5, 2024.

Ukraine regulator blocks 371 illegal gambling sites. iGaming Business. June 6, 2024.

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A cease-and-desist letter has been issued by the Michigan Gaming Control Board (MGCB) against Bovada, an offshore online gaming operator registered in Curaçao. The move comes after an investigation found that Bovada.com and Bovada.lv were both available to Michigan residents without proper licensing.

Executive Director Williams Warns Illegal Online Gaming Will Face Strict Enforcement

Executive Director of the MGCB Henry Williams said this was a significant step because regulators around the world have become increasingly concerned with online gaming platforms. He added:  

“This action serves as a stern warning to overseas companies that flouting local regulations will not be tolerated. The MGCB remains steadfast in its commitment to upholding Michigan’s laws and regulations and will continue to actively monitor and enforce compliance within the state to ensure a fair and secure gaming environment for all.”

Bovada is run by Harp Media BV and has been accused of violating several state statutes such as the Lawful Internet Gaming Act and Michigan Gaming Control and Revenue Act. These laws specify that only internet gambling establishments which are licensed by the state (including federally recognized tribal casinos) may provide such services within Michigan. Running an unlicensed betting operation in this state can lead to imprisonment for up to 10 years or fines amounting to $100,000.

Harp Media BV has 14 days from receipt of notice of the cease-and-desist order issued by MGCB to prevent access to its gambling offerings from any device located anywhere within the geographical boundaries of the state of Michigan. However, should it fail to do so then legal proceedings shall be initiated against them by the MGCB.

MGCB Stresses Consumer Safety in Crackdown on Unlicensed Online Gambling

The MGCB also emphasized the need for consumer protection. The regulator pointed out that unauthorized websites lack the necessary measures specified by Michigan’s rules to assist players in managing their gambling habits. According to the organization, such systems’ absence can pose a significant danger to people with gambling-related problems.

Despite this fact, MGCB cannot directly enforce its rules against a company like Harp Media B.V., which is based outside the country. However, previous experiences show that regulatory pressure may work in this case. 

Last year, Virtual Gaming Worlds stopped operating in Michigan after being warned by regulators about the same issue. 

It is unclear what Bovada will do next given these legal obstacles. The recent action taken by the MGCB is intended to make internet-based gambling more secure and fair, especially for residents within Michigan.

For their part, people living in Michigan should be careful when selecting where they gamble online. The Regulator advises them to only use platforms licensed by the MGCB, a list of which can be found on its website.

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Peter-Paul de Goeij, director of the Netherlands Online Gambling Association (NOGA), is calling for a “rigorous” response from Kansspelautoriteit (KSA) after research revealed that illegal operators are allowing minors to gamble. The findings, shared by Keurmerk Responsible Affiliates (KVA) and Licensed Dutch Gaming Providers (VNLOK), highlight a significant issue within the Netherlands’ gambling industry.

Research Findings on Underage Gambling

The research conducted by KVA uncovered that minors in the Netherlands can easily gamble with offshore operators. The study showed that these operators do not require the necessary age verification, allowing anyone with an email address or telephone number to create an account. This lack of oversight enables those below the legal gambling age of 18 to deposit and gamble, often using cryptocurrency for anonymous transactions.

Further, the study found that illegal casinos use the logos of banks and legal operators to mislead minors into believing that their deposits are safe. This practice is particularly concerning as it exploits the trust and security associated with these financial institutions.

Previous Research and Industry Concerns

KVA’s recent findings build on previous research from 2023, which indicated that illegal sites were targeting players attempting to bypass Cruks, the Netherlands’ self-exclusion scheme. This ongoing issue highlights the need for stringent regulatory measures to protect vulnerable groups from the risks associated with illegal gambling.

De Goeij emphasized the heightened risks for underage gamblers, noting their increased susceptibility to addiction and related mental health and financial problems. He urged the KSA to take decisive action to address these issues and fulfill its mandate to protect consumers.

“The Kansspelautoriteit (KSA), the Dutch Gambling Authority, is expected to address these issues rigorously,” De Goeij told iGB. “The KSA is likely to enhance monitoring and enforcement actions against unlicensed operators, imposing hefty fines and blocking access to these websites. Educating the public, especially minors and their parents, about the risks of unlicensed gambling and how to avoid these sites can be an effective preventive measure.”

Recommendations for KSA Action

De Goeij advocates for increased collaboration between the KSA and other jurisdictions, sharing intelligence and best practices to combat illegal operators. He also suggests that the KSA should work closely with financial institutions to block illegal transactions and cut off revenue streams to offshore operators.

“The KSA should employ advanced technologies like geolocation blocking and AI-driven monitoring to detect and shut down access to offshore gambling platforms,” De Goeij added. “Working with internet service providers (ISPs) to block unlicensed gambling sites could significantly reduce access.”

Broader Issues in the Dutch Gambling Market

The timing of KVA’s research coincides with growing industry concerns over regulatory changes in the Netherlands. Recently, a coalition agreement proposed increasing the gambling tax from 30.5% to 37.8%, aiming to generate an additional €202m in tax revenue. NOGA has expressed concerns that such measures could push operators towards the black market, undermining the regulated market’s integrity.

Earlier this year, the house of representatives voted to ban “high-risk” gambling, including online slots, and to prohibit online gambling advertising. These regulatory changes, combined with higher taxes, could drive more players to unlicensed sites, where consumer protections are minimal.

De Goeij is particularly worried about the potential impact on the legal market, warning that higher taxes and advertising restrictions might reduce revenue for the Dutch government and legal operators. This shift could lead to increased fraud, addiction, and other harms associated with unregulated gambling.

NOGA’s Strategic Recommendations

To combat the potential rise of the black market, De Goeij recommends that the KSA and the government adopt evidence-based regulations that do not overly burden legal operators. He believes that encouraging innovation and improving customer experiences in the legal market can help retain and attract players.

“The KSA and the government should encourage innovation and better customer experiences in the legal market to retain and attract players,” De Goeij said. “They should also be continuously researching market trends and player behavior to adapt regulations and strategies dynamically. Only by taking a proactive and balanced approach, the Netherlands can protect its citizens while maintaining a robust and attractive legal gambling market.”

Source: “NOGA urges rigorous KSA response after research finds illegal operators accepting bets from minors”. iGaming Business, May 23, 2024.

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Ukraine is on the offensive once again with the Ukrainian Prosecutor’s General Office launching a new investigation into online gambling platforms that have been operating illegally and are tied to Russia.

At the onset of the 2022 war, which Russia declared on its neighbor, Ukraine sought to stem the tide of cash outflow that could be fueling the aggressor’s warm machine.

Gambling sites with ties to the Russian Federation were an immediate target of Ukrainian efforts to root out illegal gambling in the country, and the latest identified but unnamed websites are among those.

Gambling Is Important for Ukraine’s National Security

Parimatch, a prominent platform, was mistakenly caught in the crossfire. Luckily, Parimatch was removed from the Presidential list of banned gambling companies later on. The new allegations levelled against Russian-based individuals and illegal platforms though will stay.

Ukraine has not shied away from levelling accusations against individual operators, and most recently in February, the country went after Cosmolot, accusing the platform of tax evasion.

The Office also outlined some of the steps that have already been taken to combat illegal gambling in the country with more than 2,500 illegal gambling sites blocked since last year, as reported previously. Right now, 450 criminal offenses are related to illegal gambling as well.

Gambling Encroaching on Military Capabilities

The country is also going after individuals whom it suspects of wrongdoing related to illegal gambling. Meanwhile, the military has had its fair share of problems with gambling and gambling-related harm.

Apart from undermining the country’s war-waging capabilities, gambling within the army has also taken a toll on the mental health of soldiers.

The Verkhovna Rada has now issued a ban on gambling in the army, with lawmakers worried about the problem as well and how it might reflect on the battlefield. Efforts to curb the spreading of illegal and irresponsible gambling have been well underway.

In the meantime, the country has also benefited from the regulated gambling sector, with online gambling outpacing expectations and generating a steady stream of tax revenue for the state coffers.

All of this is happening at a time of intensified interest in the gambling market in Ukraine. So much so that the country approved 150 new licenses in early April. Yet, there have been some headwinds as well, including the proposed dissolution of the state regulator, KRAIL, which has been deemed unfit to carry out its duties.

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The Philippine Amusement and Gaming Corporation (PAGCOR) announced that a dozen people have been arrested for involvement in illegal online gaming operations. According to the Philippine regulator, the operation was carried out on February 16 in Parañaque City.

A total of 12 people were arrested in the operation which was carried out by the National Capital Region Police Office (NCRPO), the Anti-Cybercrime Group of the Philippine National Police (PNP) and the PAGCOR monitoring team.

Alejandro Tengco, PAGCOR’s chief executive officer and chair, commented on the matter, saying that the authorities searched a den and caught suspects red-handed while operating the illegal gambling platform The Big Bet (tbb888.com). According to Tengco, The Big Bet offered illegal gambling products, such as slot machines, live casino products and esports bets, among others. 

In addition to arresting twelve people, the raiders also seized eleven computer sets, 21 mobile phones, 2 ipads, 5 laptops and multiple flash drives.

PAGCOR Wants to Eliminate Illegal Competition 

According to PAGCOR’s senior vice president for security and monitoring cluster, Raul Villanueva, the seized devices confirmed the group’s involvement in the operation of illegal online gambling. Villanueva also confirmed that cases will be filed against the suspects before the Parañaque Regional Trial Court.

Villanueva further addressed the matter, saying that the operation was a part of the Philippine authorities’ unified efforts to crack down on illegal gambling activities. He said that the regulator vows to continue working together with law enforcement authorities such as the PNP and the National Intelligence Coordinating Agency to put a stop to such operations.

We are also working closely with the Cybercrime Investigation and Coordinating Center under the Department of Information and Communications Technology because we have a lot more targets under surveillance.

Raul Villanueva, senior vice president for security and monitoring cluster, PAGCOR

Villanueva asked the public to stop interacting with and spending money on such illegal platforms and said that, sadly, most of the victims of such illegal sites are Filipino players. He said that consistent monitoring and reporting is needed in order to protect bettors and ensure that revenues from regulated gaming are channeled back to the government.

The SVP concluded that there used to be close to 5,000 illegal online gaming websites operating in the Philippines. Luckily, most of these have already been blocked, he added.

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Two 2023 police raids at Mt Lawley and Cloverdale gambling dens helped authorities seize almost $190,000 in cash, along with gambling cards and chips usually found at Monte Carlo casinos.

The two underground locations used for illegal gambling were allegedly run by a number of Crown Casino workers. 

The casino chips and blocks of cash will be destroyed as police efforts continue toward targeting more underground venues. 

$130,000 Seized from Mount Lawley

Last April, police raided a Mount Lawley business where it seized close to $130,000 from an alleged illegal game, along with tens of thousands of dollars worth of casino chips, a baccarat table cover, and gaming cards.

An ex-Crown Perth employee is believed to have allegedly recruited three additional dealers from the same casino and instructed them to run games that would allegedly target members of organized crime or problem gamblers.

All three dealers had their licenses canceled.

$60,000 Seized from Cloverdale Home Raid

At the end of 2023, during a raid on a Cloverdale home, police allegedly discovered 16 players who had been previously banned from the casino plus $60,000. 

The respective home was suspected of allegedly operating a game without a permit or license. 

A 35-year-old man pleaded guilty to money and property laundering.

While gambling activities in charities and clubs are permitted in Western Australia via a permit, police allege the respective operations did not have one.

“Eventually They’ll Pop Back Up”

According to Gaming and Regulation executive director Jennifer Shelton in an interview for 9News, these Australian criminal organizations that are targeting vulnerable individuals “who are then using it for other criminal gains” are currently laying low. 

However, Shelton is confident that “eventually they’ll pop back up either in the same location or same premises.” 

The director added that organizers were interested in targeting Crown Casino employees and recruiting both problem gamblers who are patrons at the facility, as well as dealers.

The vulnerable players are either self-excluded players or individuals who are no strangers to the world of organized crime or who have accumulated “unexplained wealth.”

At the start of the year, Crown Resorts revealed that illegal online gambling websites had been using their intellectual property to deceive consumers.

Police and Gaming Minister Paul Papalia issued a statement regarding the events, saying the tighter supervision, casino monitoring, and organized crime prevention in casinos will get, the more likely we are to see people “try and get around it.”

Gambling is considered a serious public health risk in the context of hundreds of millions being lost to the activity each month. 

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The Australian Communications and Media Authority (ACMA) has taken action against more unlicensed gambling websites in the country. The watchdog’s latest ban wave saw it block another dozen websites.

According to the authority, the sites in question included Playzilla, Wazamba, Zet Casino, Slots Palace, Nomini, Casinia, SG Casino, Fez Bet, Buran Casino, Spin Better, Golden Bet and Clash.gg. The ACMA explained that had violated Australia’s Interactive Gambling Act 2001.

For reference, website blocking is one of several enforcement options available to the ACMA and is designed to protect Australian consumers from exposure to illegal gambling services. Unlicensed sites undermine the integrity of the legal market and expose their customers to financial risks and gambling harm.

The ACMA is allowed to block websites that provide prohibited interactive gambling services (such as online casino games) to Australian players, provide an unlicensed regulated interactive gambling service or publish ads for such services.

The Watchdog Continues to Shield Australian Consumers from Illegal Content

The ACMA has been working hard to protect the Australian market from unlicensed competition ever since November 2019 when it issued its first blocking request. Since then, the Australian watchdog has issued blocking requests against a whopping 926 illegal gambling and affiliate websites.

In addition, ACMA’s actions have convinced more than 220 illegal operators to willingly pull out of the Australian gambling market.

The ACMA reminded consumers to be vigilant and make sure that they don’t engage in illegitimate gambling activities. The regulator warned that offshore operators rarely offer sufficient levels of consumer protections, exposing customers to higher risks of gambling harm.

In addition, Australian authorities cannot intervene if an unlicensed operator decides to not pay out winnings or if something else goes wrong. The ACMA urged Australian players to familiarize themselves with its register to make sure that they are familiar with the legal gambling operators in the country.

In other news, the ACMA recently slammed the gambling giants Entain, bet365 and Sportsbet over violations of its in-play betting rules. For reference, Australia prohibits in-play betting on sports matches, save for a few limited exceptions.

However, the ACMA decided not to impose sanctions on the three operators as it acknowledged their quick reaction.

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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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The Florida House of Representatives has taken a significant step in combating illegal gambling operations within the state by advancing a bill aimed at cracking down on such activities. However, despite its progress, concerns linger regarding potential unintended consequences and the clarity of certain provisions.

Rep. Michelle Salzman’s Bill Advances in Florida House Despite Concerns

House Bill 189, sponsored by Rep. Michelle Salzman, garnered approval from the House Appropriations Committee following a thorough debate that highlighted various concerns, reported media outlet Florida Politics. 

One major issue raised during the discussion was the possibility of inadvertently ensnaring unsuspecting individuals, particularly night managers, into legal trouble due to the broad language of the bill.

The proposed legislation seeks to impose harsher penalties for operating illegal gambling establishments, including those housing unauthorized slot machines. Additionally, it aims to deter such activities by prohibiting the advertising of unlicensed betting venues. 

Rep. Salzman emphasized the importance of protecting consumers from the dangers of unregulated gambling, citing its links to illicit trades such as drug trafficking and human exploitation.

While the bill received committee approval, several members expressed reservations about its potential ramifications. Rep. Dan Daley, Christopher Benjamin, Mike Gottlieb, and Patricia Williams raised concerns ranging from the broad scope of the language to the potential impact on unwitting individuals, such as low-level managers, who may not be aware of violations occurring on the premises they oversee.

Rep. Salzman Defends Controversial Bill Amidst Criticism Over Unintended Consequences

In response to these concerns, Rep. Salzman defended the bill, highlighting provisions intended to protect managers who are unaware of illegal activities taking place under their supervision. However, critics argued that despite potential legal defenses, the mere accusation of involvement in illegal gambling could have severe repercussions for individuals, affecting their future prospects and reputations.

Representatives of the amusement machine industry echoed these concerns, emphasizing the potential strain on local resources resulting from legal disputes arising from unintentional violations. Jonathan Zachem, representing the Amusement Machine Association of Florida, warned against the detrimental effects on small-scale operators caught in the crossfire of enforcement efforts.

Despite opposition, supporters of the bill argue that enhanced penalties and stricter enforcement are necessary to curb illicit gambling practices. Rep. Randy Fine emphasized the importance of maintaining regulatory oversight to prevent the proliferation of unregulated gambling activities.

As the bill progresses through the legislative process, it faces further scrutiny and deliberation. With similar legislation progressing in the Senate, the issue of illegal gambling remains a focal point of legislative action in Florida.

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