Over 50% of online gambling platforms in Asia are illegal according to the Asian Racing Federation

Posted: May 17, 2022, 7:39 a.m.

Last update: May 17, 2022, 7:39 a.m.

The Asian Racing Federation (ARF) released an analysis of the state of the game in Asia late last week. In it, the organization revealed troubling statistics, including the claim that more than half of accessible gaming platforms in Asia are illegal.

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

If the ARF review is correct, Asian countries have a problem. They apparently don’t work diligently enough to cut off access to unregulated gambling sites. It’s a difficult 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 them operated under a regulator’s license. Many also failed to comply with local regulations and watchdogs.

Gray market play remains strong

The research also revealed that most of the 534 online gambling platforms surveyed operate in gray markets. Indeed, they primarily target Asia, where gambling regulators often take a slow approach to cracking down on illegal gambling practices. In addition, they sometimes lack the resources to prosecute those who do not respect the rules.

The ARF didn’t just randomly select the websites it reviewed. Instead, authorities and the regional federation of horse racing organizations have focused on popular and trusted global brands. The survey revealed that more than 260 online gambling platforms were the most popular gambling sites between 2019 and 2021.

Additionally, the organization also reviewed a variety of randomly selected websites that may have been operating illegally or without a license. The ARF concluded that most unregulated online gambling platforms have operating licenses from certain countries, such as the Philippines, Curacao and Malta. These three have licensed many unregulated websites.

There are three types of industrial operators, according to the ARF classification system. The first category includes sites authorized to accept bets in the jurisdiction where they are located. They are licensed and therefore regulated.

The second category covers operators who are licensed by a country but are under-regulated because they accept bets from residents outside that jurisdiction. Gambling is often illegal in these countries. Third category sites have no license anywhere.

Curaçao, Malta, Philippines must do more

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

Although the report suggests that unregulated gambling operations in Asia could account for up to 80%, it is not possible to verify the exact rate. During the two-year survey period, almost 40 billion visits to online gambling sites came via gray market websites. These visits represent 76% of all traffic to online gaming sites between 2019 and 2022.

The ARF estimates that traffic to illegal online gambling sites accounted for almost 6.78 billion visits of all traffic. Website users and unique visitors are the most important factors. Almost all respondents (97%) have visited illegal gambling sites at some point during this period.

Over the past decade, illegal gambling businesses have grown rapidly. The income they generate unethically or illegally has allowed them to focus more on marketing and branding. It also allows them to offer better premiums and enjoy 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 indicates that junket operators are partly responsible for the region’s rapid growth. Some have facilitated the growth of illegal gambling; however, that is changing.

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