Dangers of online gambling fraud and how to spot it

Across the globe, regulated land-based and online gambling markets continue to grow. Countries in Europe, Africa, Asia, as well as North and South America, offer regulated forms of gambling and the regulated iGaming sector is burgeoning, delivering safe and secure services for gamblers. While regulated gambling undoubtedly expands, there is also a growing gambling black market, offering its services illegally. But what are the benefits of regulated gambling markets and what separates them from the black market? One major benefit of regulated gambling is tax revenue.

Every licensed operator is obligated to pay tax revenue and, in some cases, is subject to a license fee which is a pre-payable sum for a specific period such as a year, two or five years, depending on the established regulations. The tax revenue can be used for different purposes. For example, in different states across the United States, regulations vary, which means that collected tax revenue can fund educational or community programs. In some cases, gambling tax revenue funds research, support and treatment of gambling harm, while in others can be used for the prevention of problem gambling. Whatever the case is, gambling tax revenue provides an important stimulus for local and governmental programs.

Regulation is paramount for the protection of players

Not unexpectedly, licensed gambling operators are monitored by regulators that ensure licensees adhere to the established legislative framework. Depending on the state, a different regulator is in charge of monitoring gambling operations, for example, the Pennsylvania Gaming Control Board oversees gambling in Pennsylvania, while the Nevada Gaming Control Board is in charge of regulating gambling in the state of Nevada. Outside of the US, a similar model is established, with the Gambling Commission tasked with regulating gambling in the United Kingdom, while the Malta Gaming Authority scrutinizing the activity in Malta.

What all regulators have in common is that they monitor the regulated gambling market in the country and ensure licensed operators follow the rules. While penalties may be enforced against operators that breach the rules, the regulators also monitor the activities of illegal gambling operators and fight against that market. It is not uncommon for local regulators to impose sanctions such as fines or ask gambling operators who do not have a license in their country to discontinue their operations.

Among gambling operators that do not hold a license, there are such that offer fraudulent services. Using unregulated or unlicensed operators poses a risk primarily related to the player's personal information and funds. This is because such operators do not need to adhere to established rules by the gambling regulator in the country. As a result, the funds of players or even their personal data may be used for crimes or fraud. Furthermore, payouts from fraudulent or unlicensed gambling operators are not guaranteed and little can be done if they reject big winnings.

Identifying illegal or fraudulent operators

Besides the risk to personal data and funds, players who use illegal gambling operators are not protected. With the legal betting and gaming sector, gambling companies adhere to established regulations for fair games, as well as the protection of players. Responsible gambling tools are also important and as well as self-exclusion, options that legal gambling operators offer and need to oblige with.

In contrast, operators that offer fraudulent services are far from obliging with any regulations. However, there are ways that the users can ensure they are using licensed and regulated operators and report gambling operators that offer fraudulent services.

Gambling operators can hold multiple licenses and usually display them via their websites. Association with regulators such as the Gambling Commission or MGA via a picture or text is simply not enough as an operator offering fraudulent gambling services may fabricate such information. Here it's important to note that such actions can be considered as a crime and fraudulent operators that partake in such activities may be subject to lawsuits and international sanctions.

One way users can make sure they are using the services of a licensed operator is by checking a public register, usually released by the gambling regulator. Such registers include the exact name and registered address of the gambling business, as well as the exact website or websites where its services are available.

What online players should be on the lookout for are fraudulent gambling operators that present themselves as regulated ones. This is not an uncommon tactic and can be difficult to spot as some operators can switch a single letter from the website domain or add a character, while still trying to resemble the original, licensed gambling company. Such breaches by all means are subject to legal action and gambling operators that engage in that form of fraudulent activities may face dire consequences.

If you come across issues while gambling online, you can also check Casino Guru's Complaints section. There you can describe your case and have a dedicated mediator assigned to assist.

Illegal market share and prevention

Research released by the American Gaming Association, the national trade group representing the US casino industry, estimates that Americans wager more than $510.9bn a year with unregulated and illegal operators. This research showed that approximately $44.2bn is the estimated revenue for gambling operators lost to the illegal and unregulated sector. Not unexpectedly, the research uncovered that some $13.3bn in taxes are also lost to the illegal and unregulated market in the US.

A breakdown of the total betting handle to illegal gambling shows that online slots and table games represent the biggest share of the revenue, $337.9bn. Unregulated gambling machines account for $109.2bn, while some $63.8bn is lost to illegal sports betting.

Investigations and raids against illegal gambling operators are not uncommon in the US. While this applies to the land-based sector and operations against illegal gambling can be conducted on a local and federal level, gambling regulators also monitor the iGaming vertical and take action where needed.

While fighting against the illegal and unregulated market is one way to protect consumers, expanding the legal sector is another. Since 2018 when the US Supreme Court ruled PASPA unconstitutional, sports betting has been spreading across the US rapidly. The legalization of the activity in new states helps protect the customers, by channelizing bettors to the legal sector and reducing the share of the black market.

Elsewhere, in Australia, efforts against illegal gambling are also strong. The Australian Communications and Media Authority (ACMA), the authority in charge of the regulation of communications and media, recently asked Internet Service Providers (ISPs) to prohibit access to illegal gambling websites that do not adhere to the established regulations. The latest bans on illegal gambling companies further expanded the long list of ACMA, which now surpasses 800 operators.

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