I
f you chose to place your bets with a legal betting site, there are certain guarantees that you get as a result. The United Kingdom Gambling Commission gives its licences out to companies on the understanding that the companies that are on the receiving end of the licence will obey certain conditions in order to maintain it.
On top of that, the UKGC carries out checks on the companies, either issuing them with fines or else removing the licence altogether if the company has failed to carry out the various conditions of the licence.
That is why we would always recommend that you use a licensed betting site in order to place your wagers or play casino games, amongst other gambling activities that you might wish to carry out.
Unfortunately, there are companies out that that, for one reason or another, choose to set up illegal betting sites that are then used by some punters that feel that they need to turn to such a thing in order to place the sorts of bets that they wish to. The problem, if course, is that if you have any issues then you have no recourse, up to and including finding out where it is that they’re based.
What Makes A Site Illegal?
The first question that you might want to ask is what it is about a site that makes it illegal. In essence, if a company is offering its services to clients in the United Kingdom then they have to have been issued with a licence to do so by the Gambling Commission.
Those that haven’t been issued with such a licence but still offer their wares to UK based punters are doing so illegally. If they are not registered to operated in the country that they are offering their services then they are, by default, an illegal operation, which isn’t good news for bettors.
If there are no regulatory systems in place then the company can operate however it wishes to. This means that they can use flawed software to ensure that you lose pretty much every time that you play, for example.
There is no necessity to ensure that the Random Number Generators used are fair, nor that they are checked regularly, both of which is the case with licensed site. An illegal site has no need to protect your money, nor to ensure that your bank information is safe, meaning that the very process of depositing money might lead to you losing money in the long run.
Illegal Sites Exist In Unregulated Areas
In terms of where it is that such illegal sites might be based, it is necessary for them to exist in a space where they are unlikely to face any sort of regulatory issues from the government. A business wanting to operate in the United Kingdom, for example, would soon be discovered and almost certainly shut down if they were located in the country. This is why they tend to be set up in countries like Curacao, where the regulation on online companies is much less intense and they are able to operate without such a sense of oversight.
We know that this is the case thanks to information related by the Council on Anti-Illegal Betting and Related Financial Crime in May of 2022. The State of Illegal Betting Report examined how illegal betting operates around the world, with the discovery being made that about 61% of the betting sites operating online were either under regulated or else completely unlicensed. That figure is based on the analysis of more than 500 betting sites online, looking at the likes of whether it had a licence and what products were offered.
The most interesting thing that the report discovered was where these sites were based. Around 62% of the sites that were under regulated were based in Curacao, the Philippines and Malta. They were able to avoid regulation thanks to the practice of ‘mirror sites’, whereby the website was offered through numerous different URLs. Even in regulated areas, the practice of using white label sites allowed for a weak area to be exploited by the illegal companies. In the majority of instances, punters couldn’t tell whether they were on a legal or an illegal site.
The Main Areas Where Illegal Sites Are Based
There are, according to the report, three main areas where illegal sites tend to operate out of. The first of these is Curacao, the island nation that has been active in the betting industry since 1996. Low tax rates are a draw for operators, such as the 2% tax rate. A site licensed in Curacao will be able to operate in numerous different countries, whilst those that don’t have a licence won’t be dealt with in the same sort of manner as such a site would be if it was located in the United Kingdom or the United States of America, for example.
A name that will be familiar to many who know at least a little bit about online gambling is Malta. A wealth of European sites are based out of Malta thanks to its location in the European Union, with the Malta Gaming Authority responsible for the issuing and tracking of gambling licences. Companies that receive a licence from the MGA don’t have to ensure self-exclusion in the same way as UK companies have to join GamStop, whilst the responsible gambling policies aren’t anywhere near as thorough, hence the decision of illegal sites to be based there.
Finally, the Philippines is one the biggest areas for unlicensed sites to be based. In 2019, for example, over 30,000 gaming sites were shut down. Corruption was the reason sited, including the state gambling facilities that existed at the time. Even so, in 2022 reports suggested that trillions of pesos were exchanged by illegal betting sites, with huge numbers of illegal betting sites operating in the area. There is no real verification process in place, with companies able to set up and operate with virtually no oversight.