Shedding Light on Gambling Industry: Corey Plummer on the Threat of Illegal Operators

CEO of OlyBet, Corey Plummer, Dives Deep into the Underbelly of the Gaming Industry: From the Alarming Rise of Illegal Gambling to the Dire Need for Regulatory Reforms.

Why is it important to talk about the issue of illegal gambling?

The topic of illegal gambling and policies aimed to prevent it should have more focus than it does today because the activities impact a wide range of legal gambling operators and products, customers of every level, local finances and can negatively impact sovereign nations themselves.

How big is the problem within the industry?

Illegal gambling is pervasive across the industry at every level. Several industry events are sponsored and promoted by companies operating mostly in black and grey markets, using primarily unregulated currencies without responsible gaming programs or sufficient AML or KYC practices. Some of these operators have won industry awards as the best examples of companies and marketers. Major sports leagues and clubs are sponsored by illegal gambling companies and pirate sports streamers. There are hundreds, if not thousands, of affiliate sites promoting illegal gambling operators. Politicians are focused on what they and potential voters can see in their neighbourhoods, so the political focus is away from online, unregulated currencies and on to the street market.

What are the latest trends showing – has it gotten better or worse in recent years? Could you explain why.

What happens more today than before is the blatant lack of awareness and due diligence by sports leagues and clubs around this topic. There are numerous football clubs in major markets accepting sponsorship fees from illegal gambling operators, pirate streamers and sanctioned persons. There are more online operators today focusing on unregulated digital currencies under the pretence of saving the consumer. Why do consumers need unregulated currencies? If the local gaming market is legal and regulated, then it accepts local currencies and other regulated currencies like dollars, pounds, pesos and euros.

Could you bring out some regions, subsectors etc where the problem is particularly prominent.  

In Europe, nearly every football game shown on TV has sponsored illegal gambling operators on the LEDs, even the club jerseys. There are smaller island nations issuing gambling licenses that offer unlimited access to other sovereign nations where gambling regulation, player protection policies and taxation structures exist. Should it be correct that a small island nation can grant rights to any gambling operator against the will and laws of other sovereign nations? I am certain that the reverse situation would engender vigorous outrage by the same island politicians and regulators. Gambling is a regulated industry just like medicines.  Does the medical industry celebrate and reward illegal pharmacies? Do local politicians accept illegal sales of medicines to underaged people? People with addition problems? Would most people believe that selling unregulated medicines from foreign locations over the internet to unknown people purchased with crypto currencies to be criminal activity?

What kind of impact does illegal gambling have on the industry and different stakeholders (including consumers)? Why is it important to tackle this issue?

The impacts can be significant. A winning customer has no recourse when the operator does not payout. Underage and problem gamblers have unlimited access to these products due to a lack of proper AML and KYC policies. At the top end, terrorists and criminal organisations are able to money launder through some of these operators. Governments can have ratings downgrades due to acceptance and lack of policies surrounding unregulated currencies and the companies that support that industry. There are various levels of bad actors in this space. Some operators simply want to pay less taxes and have less administration and therefore use the island licenses. There are others that are totally corrupt.

In your opinion what should be done to combat illegal gambling? On government level, by other important stakeholders etc.

Governments should agree that regulated industries are equal in nature and are not everyday products and services like bread and colas. In this way, there can be better cooperation between nations and even acceptance of island licenses within the territories under certain frameworks.

Regulation of products and services exists for good reasons. Regulators should offer a more comprehensive view on the industry and not simply the visible parts. Online gaming is invisible in many ways and is less understood by the institutions and policy makers that oversee it. The most harm is happening under their watch.

The industry, its associations and networks, should take a strong stance for regulation and legal operating practices. It should stop supporting and rewarding illegal and unregulated activities. The reputation of the industry would improve and so would local operating environments.

You have said that some well-known gaming events have formed partnerships with grey-area operators. Could you bring concrete examples of this?

There are several events supported by these types of operators in Amsterdam, Barcelona, London and Malta. The events are not the problem. The events are attempting to bring all areas of the industry together and that is fine and good. The problem is giving excessive platforms to these types of operators, rewarding this type of activity and accepting them as sponsors.

There have been similar cases with sports teams and media companies, who have formed partnerships with grey-area operators. Do you think in these cases it has been a conscious decision or an involuntary error in their due diligence process?

The organisations are looking for partnership sales and revenues. In many cases, the rights holders or team managements simply assume that the businesses are legal because they have the necessary funds or are already seen on TV. We have seen examples in the press where club and media representatives never opened the websites of companies that they partnered. The more bad actors there are on TV sports, the more credibility them assume. In the UK, there has been a significant focus on regulating the local operators, while giving an open platform for foreign and illegal operators. This makes little sense to me.

What are the telltale signs of an illegitimate gambling business?

There are several signs to think about and typically it’s brands that clearly promote themselves to Asian markets where gambling is illegal. The brands that have non-local dots in their sight names, are simply a set of numbers or offer languages on the site from countries where gambling is illegal. Brands that show payment circumvention or offer other services such as direct contacts with dealers. Offering crypto options by itself is not a sign of illegal operations. There are licensed operators accepting Bitcoin that operate within the bounds of acceptable AML and KYC polices.

Looking to the future: what would you predict the situation is in 10 years?

I expect to see more Asian and Middle East markets offer regulation and a total reduction in grey and black markets in Europe, Africa and the Americas. Digital currencies will be regulated widely and likely more acceptable than crypto, which is an asset class and costly to the environment. AI will advance to the point where specific polices and regulations are monitored and enforced automatically within networks of sovereign nations and regulatory boards. Owners and managers will be held to greater account for breaking local laws and regulations. Street gambling will be reduced significantly and replaced by larger complexes that offer more options for entertainment, food and beverage, sports watching and video gaming. Consumers will have more legal access in their home countries to international online operators, liquidity pools and sports media.