Are we doing enough to tackle illegal gambling sites?
There is no doubt that illegal gambling sites pose a threat not just to legitimate gambling sites but particularly individuals who may be trying to self-exclude from gambling. As this latest investigation from ‘follow the money‘ makes clear there are dozens of online casinos operating illegally, making millions of euros a year without any regard for player safety. The illegal gambling market is estimated to be a staggering USD 1.7 trillion globally. This latest report identifies a software company in Bulgaria and two Israeli businessmen as being just one of may behind a number of these sites.
We should not underestimate the complexity of this problem and it should not be regarded simply as a gambling issue. At its heart is the exploitation of vulnerable people via the internet and many of the criminals behind these illicit gambling sites are the same criminals who are also exploring people through child pornography, human trafficking, extortion and other areas of organised criminality. In the article below I explore some of the points raised in the follow the money article and pose various questions to consider whether we (as a society) are effectively using existing tools at our disposal before we look at whether we need to think afresh. As will become clear this is not something that can be tackled by one organisation alone, it will require collective will and action to tackle organised global criminality.
Regulation
This particular article identifies an IT software company as being behind a number of the illicit sites identified. It states that this company uses letterbox companies in Curaçao and Malta as operators. The use of such companies and techniques will be all to familiar to those of us who have had to investigate any type of organised criminality. That IT company is apparently a software developer and service provider for online casinos and bookmakers. Both the Spanish and Dutch regulators have taken action against the company for operating illegal sites targetting Spanish and Dutch citizens. The fines of €6,000,000 are a small fraction of the profits being generated and remain unpaid! The article implies that the company has its own licences to provide online gaming software in a number of jurisdictions. A murky link between regulated and unregulated markets is actually recognised by the United Kingdom Gambling Commission (UKGC) in its latest industry warning issued on 20 January 2025. However if IT companies such as the one cited by follow the money have legitimate IT service provider licences why can’t these licences be removed? It may be that these licences are just a front to provide legitimacy- it would be interesting to know how much of these companies’ revenue is derived from contracts with legitimate operators. We know that criminals like to operate in plain sight and therefore could removing a layer of legitimacy be a partial step towards tackling the problem?
The article suggests that many of these sites operate under licences issued by Curaçao. Curaçao is not the only gambling authority to have questions raised regarding its effectiveness, particularly in countries where there is great dependency between gambling revenues and a country’s GDP. It would also appear that gambling regulators across the globe do not necessarily have a shared vision of what constitutes illicit gambling.
This problem is further complicated by the fact that as stated at the beginning of this article this is not just a gambling issue. This is a societal issue arising out of exploitation of our use of the internet. Globally there is much debate about the role that internet service providers should have in better protecting us from online harms. In the UK the Online Safety Act 2023 (the Act) is a new set of laws aimed at protecting children and adults online. It puts a range of new duties on social media companies and search services, making them more responsible for their users’ safety on their platforms. This includes removing illegal content. However what constitutes illegal content in the context of illegal gambling would need much further clarification and agreement than currently exists. At first reading of the Act it does not appear that illegal gambling is one of the priority offences at which the Act is aimed. Unless it is explicitly covered in legislation I think there is little hope or expectation that the Act will offer any protection particularly given recent announcements from a major service provider in the US. It also remains to be seen how the regulator charged with enforcement (OFCOM) will be able to deal with the extra-territorial reach of the Act.
A fragmented and ineffective global regulatory system will be music to the ears of the criminals.
Law enforcement
As Interpol have pointed out, illegal gambling is often linked to other organised criminality such as human trafficking, child pornography, and child prostitution. There has been some successes for law enforcement, for example operation SOGA X in 2024 which led to thousands of illegal sites being taken down. This however is still a drop in the ocean and it is all to easy for new sites to spring up overnight to replace the ones taken down. Also the focus for much of this activity is aimed at sites providing services to countries where gambling is illegal, or to counter illegal betting rings. Whilst these are both legitimate aims one wonders where sites such as those exposed by Follow the Money, aimed as they are at countries where gambling itself is legal, sits on Interpol priorities? There is also the vexed problem that there is no clear global definition of what constitutes illegal gambling activity. There are some who might argue that the types of site referenced in the follow the money article are not in fact illegal offerings!!
With such confusion and inconsistency in how such matters are viewed globally from a criminal justice perspective then there is perhaps little hope of more successful law enforcement action. The need for law enforcement itself would also suggest that the battle has already been lost by that point. From both a legal and regulatory perspective therefore should we not be focusing more on the prevention side rather than the enforcement side. Such an approach would be consistent with other areas of criminality where we look towards greater investment in prevention rather than investigation.
Following the Money
One area that has been used in other areas of economic crime is the identification of the flow of illicit funds. However given the tiny proportion of criminal funds subjected to any kind of confiscation globally we might be forgiven for being slightly cynical about how effective we are being in disrupting the criminals! That said I for one am not going to say we shouldn’t keep trying – we just need to get better at it! So from a Proceeds of Crime perspective this leads us to those caught by global anti money laundering legislation which in some jurisdictions (including the UK) places a requirement on many sectors (including online casinos) to report any suspicions regarding possible proceeds of crime. This then begs the question – are any regulated operators using IT service providers such as the one mentioned by ‘Follow the Money’? If so would the evidence from ‘Follow the Money’ provide suspicion of involvement in criminal activity to warrant a Suspicious Activity Report (SAR) under anti money laundering (AML) requirements? Indeed if they didn’t report would that potentially put them in breach of their own licence conditions or worse still make them guilty of facilitating actual money laundering – a criminal offence in its own right.
Outside the gambling sector how can we get better at truly following the money. In this type of case it is more complicated because the money flowing to these sites will often be legitimate (i.e. non-criminal ) funds which end up at criminal enterprises through these sites? Traditional AML policies therefore will not be sufficient or appropriate. The flow of legitimate money to illicit destinations is more akin to corruption, terrorist financing or financial sanctions. I have said before in order to tackle such financial flows we don’t just need to look at source of funds checks, we need to do more destination of fund checks! There is little guidance out there on how/when such checks should be made but all organisations should be mindful of this given that anti-corruption, anti-terrorist financing laws and financial sanctions apply across all industries and many jurisdictions.
Reputational Risk
Even if the above financial crime/AML provisions don’t apply should companies be worried about continuing to use such IT companies as suppliers? Does the continued relationship with such companies expose operators (and others involved in the industry) to reputational risk and is it consistent with their own Environmental Social and Governance (ESG) policies? I have deliberately extended this beyond operators. As stated above the article suggests that many of the sites cited in this article operate under licences issued by Curaçao gaming authority. Curaçao gaming authority however still proudly promotes its services at major industry events such as ICE? Many of these sites are also promoted through affiliate marketing sites. Should we be worried by this? Should we be doing more due diligence on those we associate ourselves with?
Action for us all
Like most criminality such as this the answers are complex and perhaps overwhelming. I for one do not have all the answers. One thing I do know from years of investigating and tackling such criminality is that we all have a part we can play (however small) in trying to address the problem. Can we harness the power of the honest majority? Getting the issue into the mainstream media and not just locked away for financial crime geeks like me to read would be a great start! Please therefore help spread the word and join the conversation. I will use my connections but can we all do the same – please! This is a real world problem that is damaging lives and will require concerted and combined effort to achieve results. So my final challenge is to everyone reading this – please join the debate, share and help spread the word. If you believe you are doing something good in this space – share it with us. You can be the difference if you accept the challenge!
Neil Tyson is a leading financial crime consultant working across a number of sectors. He was also until recently a Trustee for Betknowmore UK, a UK based charity working to reduce gambling related harm through the power of ‘lived experience’. He is also an international speaker on financial crime, ethics, due diligence and financial means assessment. You can hear him next at The Ethical Gambling Forum in Gibraltar on 29 and 30 April 2025.
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