The Asian Racing Federation has expressed its concerns over white-labeling services as the federation states that they make it hard to differentiate between legal and illegal gambling sites. “The State of Illegal Betting Report,” an analysis by the ARF, claims that the public has particular problems in distinguishing between legal and illegal sites.
The UKGC Noted That There Are Over 700 White-Label Partners in 2020
Back in 2020, UK’s gambling regulator, the Gambling Commission, noted that there are around 700 white-label partners in the gambling industry. The commission added that this model was becoming popular as it helps operators to bring global exposure to their products.
White-labelling is the process of provisioning a part of the operations of a certain online sportsbook. These operations, which include the license in most cases, are then branded and distributed by a separate website. In some cases, through white-labeling, an entire sportsbook can be provisioned and distributed by a different brand.
There are several advantages that websites experience from white-labeling solutions, one of which is the lower cost needed to set up the business. As the Asian Gaming Brief states, thanks to white-labeling, adverts direct players to mirror websites in Asia, and the sole purpose of these arrangements is to promote illegal betting.
Dr. Sally Gainsbury, an ARF council member, stated that customers are more exposed to gambling harm if they wager at offshore sites, rather than domestic sites that are regulated. This shows that offshore sites present a problem as they are breaking the law by not holding an onshore license.
ARF’s Categorization of Legal and Illegal Gambling Websites
According to the ARF, online gambling platforms that are licensed by one jurisdiction and accept wagers outside of that jurisdiction are not legal. A report found that out of 534 online casinos and online sportsbooks in 61 jurisdictions, less than 40% are actually licensed and regulated.
In the 94-page report, the ARF outlines the fact that a majority of the operators are taking advantage of the so-called grey markets that operate from Brisbane and Beirut. Sites are classified into three categories; the first category includes licensed and regulated operators, the second category includes licensed, but under-regulated operators and the third category features sites that do not possess a license at all.
Moreover, the report found that two-thirds of the sites that operate in other jurisdictions illegally come from Curacao, Malta, and the Philippines. Finally, it outlined the fact that casino junkets helped fuel the rise of illegal gambling in Asia. Junkets have proven to be quite problematic, especially in Macau, which is why they won’t be able to accept deposits anymore.
Illegal websites are a major problem to players as they are unable to determine which sites are licensed and regulated and which are not. A 2020 report in Sweden found out that only 5% of the customers know how to check the credibility of a gambling operator.
The USA is also facing a similar problem, which is why the American Gaming Association urged the DoJ to crack down on illegal offshore gambling sites. In a letter sent to Attorney General Merrick Garland, AGA stated that it believes that the DoJ is the only entity that can deal with this issue in a proper manner.