Experts say teamwork, resources key to battling illegal market

A coalition of international gaming professionals gathered at ICE Barcelona on January 20 to delve into the complexities of the illegal gambling market and strategies to mitigate its impact. Among the key themes discussed were the necessity of open communication channels and the allocation of adequate resources.

The discussion, expertly moderated by David Henwood, Director of H2, featured a distinguished panel comprising:

Isabelle Falque-Pierrotin, Chair of the French Gambling Authority (ANJ)
Bashir Are, CEO of the Lagos State Lotteries & Gaming Authority
Gilbert Remulla, Director of the Philippine Gaming and Gaming Corporation (Pagcor)
Lisa Osofsky, former Director of the UK Serious Fraud Office

“Is the illegal market growing? Yes, it is in most European jurisdictions,” asserted Falque-Pierrotin, emphasizing the urgency of the situation. She pointed to the COVID-19 pandemic and increasing competition in legal offerings as primary drivers of this troubling trend. Despite the challenges, she underscored that combating this issue is essential for maintaining the integrity of regulatory frameworks.

“If we do not fight, we risk undermining the legitimacy of regulation,” she warned, estimating that the black market constitutes approximately 10% of the regulated market. In contrast, Remulla noted that the illegal market in the Philippines had been reduced to about half, from previous estimates as high as 90%.

The Crucial Role of Communication and Cooperation

Throughout the session, all panelists highlighted the significance of collaboration in addressing the global challenge of illegal gambling. Individual regulatory bodies often operate with limited resources; however, collective action enhances their overall effectiveness.

“Without cooperation, we cannot combat illegal gambling,” asserted Are. “The illegal industry is continually evolving to stay one step ahead of regulation.”

Osofsky provided valuable insights from a law enforcement angle, stressing that the challenge lies in combating an adversary that is not only difficult to identify but also highly adaptable. She presented a slide showcasing stark variations in global black-market revenue estimates, demonstrating the range of the issue.

In addition to fostering international communication, the necessity for domestic teamwork was equally emphasized. Remulla explained Pagcor’s limited police authority, yet noted significant advancements made through collaborations with other governmental entities. Responding to the illegal market’s pressures, Philippine President Ferdinand Marcos Jr. recently moved to shut down the offshore gaming sector, redirecting Pagcor’s focus solely on governance.

A Balanced Approach: Merging Business Interests with Regulation

Remulla advocated for a more supportive business climate in conjunction with regulatory backing. He argued that enticing operators with lower tax rates could be more effective than reliance on punitive measures.

Striking a balance that protects consumers while permitting regulatory innovation is paramount. The illegal market often lures players with superior odds or unique offerings not found in legal channels. This is despite the absence of Know Your Customer (KYC) protocols and associated risks, as highlighted by one panelist.

Artificial intelligence (AI) emerged as a promising technology in the dialogue, with the potential to aid regulatory efforts against illegal operations. However, consensus indicated that harnessing its full potential would require time and measured experimentation.

The Role of Suppliers in the Fight Against Illegality

Another focal point was the accountability of suppliers, with a strong emphasis on enforcing licensing and vetting practices. Are particularly emphasized that suppliers should be held to the same rigorous standards as operators to ensure a comprehensive industry-wide effort against illegal gambling.

In response to inquiries from iGB regarding the role of payment providers, Falque-Pierrotin stressed the importance of engaging all stakeholders within the online gambling ecosystem. For progress to occur, regulators must possess both the authority and resources necessary to command respect and compliance from all parties involved, including payment providers, search engines, and social media platforms.

“They recognize that addressing this issue is in their best interest as well,” she concluded.