Asia’s Online Gambling Platforms Are More Than 50% Illegal, Officials Claim

Posted on: May 17, 2022, 07:39h. 

Last updated on: May 17, 2022, 08:59h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

The Asian Racing Federation (ARF) released analysis on the state of gambling in Asia late last week. In it, the organization revealed troubling statistics, including the assertion that over half of the accessible gaming platforms in Asia are illegal.

Winfried Engelbrecht-Bresges
Winfried Engelbrecht-Bresges, head of the Asian Racing Federation (ARF) and the Hong Kong Jockey Club. The ARF released a report recently that shows how illegal gambling platforms in Asia control the market. (Image: South China Morning Post)

If the ARF review is correct, Asian countries have a problem. They apparently aren’t working diligently enough to cut off access to unregulated gaming sites. It’s a challenging task, but there are ways to limit access.

The report examined 534 online gambling sites in 61 countries. The ARF’s review found that less than 40% of these were operating under a regulator’s license. Many also failed to comply with local regulations and watchdogs.

Gray Market Gambling Remains Strong

The research also revealed that most of the 534 surveyed online gambling platforms operate in gray markets. This is because they primarily target Asia, where gambling regulators often take a slow approach to addressing illegal gambling practices. In addition, they sometimes lack the resources to pursue those who do not comply with the rules.

The ARF did not only randomly select the websites it reviewed. Instead, authorities and the regional federation for horse racing organizations concentrated on global brands that are popular and trusted. The survey revealed that more than 260 of the online gambling platforms were the most popular gambling sites between 2019 and 2021.

In addition, the organization also examined a variety of websites randomly selected that might have been operating illegally or without a license. The ARF concluded that most of the unregulated online gambling platforms have operating permits from certain countries, such as the Philippines, Curacao, and Malta. Those three have issued licenses to many unregulated websites.

There are three types of industry operators, per the ARF’s classification system. The first category includes sites licensed to accept bets in the jurisdiction they are located. They are licensed and, therefore, regulated.

The second category covers those operators who are licensed by a country, but are under-regulated because they take bets from residents outside that jurisdiction. Gambling is often illegal in these countries. Sites in the third category have no license anywhere.

Curacao, Malta, Philippines Must Do More

The ARF’s data suggests that the share of unregulated gambling websites comes mainly from these three countries and their respective licensing processes. The organization revealed that Curacao was home to 31% of all offenders, and Malta 18%. The ARF called the Philippines a “global facilitator” of illegal gambling.

Although the report suggested that Asian unregulated gambling operations could account for as much as 80%, it is not possible to verify the exact rate. Over the two-year survey period, almost 40 billion visits to online gambling sites came via websites in the grey market. These visits account for 76% of all traffic to online gambling sites between 2019 and 2022.

The ARF estimates that traffic to illegal online gambling sites accounted for nearly 6.78 billion hits of all traffic. Website users and unique visitors are the most important factors. Nearly all of those surveyed (97%) visited illegal gambling sites at one time during this period.

Over the past decade, illegal gambling businesses have grown rapidly. The revenue they generate in an unethical or illegal manner has allowed them to concentrate more on marketing and branding. It also allows them to provide better bonuses and take advantage of inconsistent enforcement by regulators. Although not mentioned, another reason could be the introduction of too much regulation.

Junkets Add to the Problem

The report also states that junket operators are partly to blame for the rapid growth in the region. Some have facilitated illegal gambling growth; however, this is changing.

As junkets continue to fall out of favor, one of two things will happen. They could quit influencing illegal gambling, leading to attrition of the segment. On the other hand, because their position in the industry is under attack, they may push illegal sites more in order to recover lost revenue. If some were willing to break the rules as a legal part of the industry, they likely wouldn’t hesitate to break them as they are forced out.