61% of betting websites illegal in most countries, with only 39% licensed and regulated

The Asian Racing Federation (ARF) Council has released the State of Illegal Betting report which outlines the current state of illegal betting markets on horse racing and other sports, and the future threats from illegal betting.

According to the findings from the report, 61% of betting websites examined are effectively illegal in most countries, while only 39% were licensed and regulated. In addition to this, betting licences issued in three jurisdictions – that is Curaçao, Malta and the Philippines – account for 62% of these websites that are effectively illegal in most countries.

The report is aimed to act as a regular review of what is happening in regard to illegal betting and related financial
crime so readers can understand the impact of this continued serious problem. Illegal betting is constantly
evolving, and indeed growing, and hence regular fresh analysis of the negative impact of this phenomenon is

“The State of Illegal Betting’ report is intended to assist government policy-makers, regulators, law enforcement
officers and those involved in the governance of horse racing and other sports, as well as people in the racing
and betting industries, to comprehend the present scale, scope, and harm to society of illegal betting and related
financial crime,” states Winfried Engelbrecht-Bresges, Chairman, Asian Racing Federation.

In the report, the ARF Council highlights the current state of illegal betting. The ARF Council’s analysis of online
betting websites has found that 61% of betting websites examined were effectively illegal in most countries as they
are either Licensed but Under-regulated or Unlicensed and Unregulated.

“Only 39% were Licensed and Regulated, and just three jurisdictions were responsible for 62% of the online betting licences that were Under-regulated. This means that almost two-thirds of online betting operators are taking bets in jurisdictions where they do not hold a licence. The problem of questionable legality of certain betting operators is becoming increasingly complicated by a handful of jurisdictions that specialise in issuing licences to Under-regulated betting operators, who then take bets from outside of these jurisdictions,” states Engelbrecht-Bresges.

“Clearly the issuance of gambling licences to companies taking bets in jurisdictions where they are not licensed
involves no standards and no boundaries. This is in marked contrast to the effective local regulatory systems that
govern legal betting operators within the jurisdictions where they take bets. It is only when operators have full
legal authority, by being licensed in the jurisdictions where they take bets, and by taking bets only from customers
located in those jurisdictions in which they are licensed, that harm to customers can be prevented and the integrity
of racing and other sports protected.”

The ARF report notes that even though both legal and illegal betting on racing and other sports has increased during the pandemic, it is illegal betting operators and not legal betting operators who are the threat to integrity as they do not share information regarding suspicious betting patterns with sports authorities or cooperate with law enforcement agencies.

The report reviews key issues relating to illegal betting such as the hybridisation of betting markets with increased
‘white labelling’, corruption in racing and other sports, organised crime involvement, notable developments in
sports law, and problem gambling.

“Illegal betting is multi-faceted and relates to grey areas of legality across the betting industry. For some years,
there has been growing convergence of illegal and legal betting as illegal operators expand outside their home
regions and legal betting operators seek new customers in markets which are ‘grey’, which essentially means
where the legality of the acceptance of a wager is questionable,” notes the report.

The report also provides an analysis of online betting websites that has shown a ‘hybridisation’ of betting markets, a  term which refers to an increasing convergence of illegal and licensed betting operators in jurisdictions where both are operating illegally, but the licensed betting operators claim legality based on a licence held elsewhere.

The grey area leaves customers unsure of which online betting websites are legal and which are illegal, leading to
ambiguity. The uncertainty has been worsened by the growth of offshore betting licence issuers that deliberately
provide a semblance of legality to online betting operators which are Licensed but Under-regulated, and hence are
illegal at the point of sale in jurisdictions where they do not hold a licence.

“The problem of illegal betting remains. There are changes taking place in the global betting markets indicating that
illegal betting will continue to grow if governments cannot take more co-ordinated and effective action to combat
illegal betting operators,” adds the ARF Council report.

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