Illegal online gambling and betting is booming in Asia

Publication date: 26 Jul 2022

The Asian Racing Federation (ARF) has prepared a report based on its own research on the state of online gambling and betting in Asia.  The data is provided by analyzing 534 betting sites licensed in 61 jurisdictions.

All sites are divided into three categories for detailed analysis:

  • “Licensed and regulated” are sites that are regulated by the jurisdiction in which they are licensed to accept bets.
  • “Licensed but insufficiently regulated” are sites that are licensed by a jurisdiction but insufficiently regulated because they accept bets from people outside those jurisdictions where gambling is generally illegal. Three jurisdictions (Curaçao, Malta, Philippines) account for 62% of such sites.
  • “Unlicensed and unregulated” are sites that operate without a license and accept bets from anyone who wishes to do so.

In the end, experts found that only 39% of the sites were licensed and regulated. And 61% of betting sites were in fact illegal in most countries (i.e., in the second and third categories). That is, almost two-thirds of online betting operators take bets in jurisdictions where they are not licensed.

Attendance at Asian gaming and betting sites increased by 37% from 2019-2020 to 2020-2021. Meanwhile, the increase in traffic is most pronounced (64%) for poorly regulated sites compared to sites from regulated markets (36%).

A total of 39.75 billion visits were recorded to gaming sites over this period, with licensed and regulated sites accounting for the majority (76%).  It is worth bearing in mind that in Asia, players often do not interact with the website themselves, but rather place bets through agents. Thus, a single “visit” may be behind the bets of dozens or hundreds of players.

It is also interesting that 42% of websites have “mirrors” and 4% of them are fully licensed and regulated sites. 

The audience of gambling and betting sites: about 60% are under 34 years old, 64% are men and 76% play and bet on mobile devices.

What sports do visitors to Asian betting sites choose? 

According to the ARF, the most common sports for betting are football, basketball and tennis. Horse racing remains an important betting product, available on about 36% of betting sites. eSport can now be accessed on 63% of all websites and on 64% of unlicensed and unregulated websites. The majority (81%) of betting sites also provide non-sports gambling products such as casino games and slots.

Betting on horse racing, eSports, alternative leagues and sports through illegal betting sites has increased significantly during the pandemic. Illegal operators can adjust their offers much faster than licensed and regulated operators, often restricted by a variety of acts and agreements. 

In addition, as an alternative to major football leagues closed due to the pandemic, illegal operators have proposed betting on minor leagues in Belarus, Nicaragua and Turkmenistan, as well as on sports that are usually not popular: Ukrainian badminton, basketball (Tajikistan), Russian ice hockey, table tennis (Armenia, Brazil, Czech Republic, Russia, Ukraine), tennis (Belarus, Russia, USA).

Key betting and gambling market trends in Asia in 2022

Hybridisation of betting markets in Asia

The report notes a new trend towards the “hybridisation” of gambling sites. This means that there is a growing convergence of illegal and legal betting in the Asian gambling market. That is, illegal operators are expanding and entering markets in new regions, while legal betting operators are looking for new customers in grey markets. At the same time, licensed betting operators claim legitimacy on the basis of a license held elsewhere.  The emergence of such a grey area makes customers question the legitimacy of all sites in general, as it is unclear which online betting sites are legal and which are not. 

“Changes are taking place in global betting markets indicating that illegal betting will continue to grow unless governments can take more coordinated and effective action against illegal betting operators,” say experts.

The impact of the pandemic on the Asian gaming market and crime

In 2021, Interpol’s Operation SOGA VIII (short for SOccer GAmbling) arrested around 1,400 suspects, seizing US$7.9 million in cash and US$465 million in betting. This once again demonstrated the continuing scale of illegal betting in Asia as a financial crime. 

Here is fresh data that clearly illustrates the profitability of casinos in Asia. In late July 2022, police in Hong Kong, China exposed a large illegal gambling network and arrested 48 people. It emerged that the syndicate had made more than HK$33 million (about US$4.2 million) in 2 years and had also successfully set up front companies to launder criminal proceeds at seven gambling establishments in Yau Ma Tei.

What are junkets or specialty casinos in Asia? Junkets refer to a type of casino that is willing to pay for the player’s flight and accommodation. The paying tourist must deposit a certain amount of money in advance, then come to the casino and bet the full amount.  All winnings are returned to the tourist’s account and can be withdrawn. 

The COVID-19 pandemic has severely affected casinos and junkets, whose customers have switched to online betting and gambling. Operators are forced to make up for the loss of revenue in their physical casino business by diversifying their business across Asia through investments in casinos in other countries, as well as further investments in online betting and gambling. Of particular concern in this case are casinos from Macau, which (according to law enforcement agencies) continue to be controlled by the Triad (Chinese organised crime groups). In this case, increased investment towards Australia, Japan, South Korea and the Philippines could lead to the spread of transnational organised crime.   

 

Experts predict an increase in illegal betting in Asia over the next 10 years.  The reason is a combination of the hybridisation of betting markets, the impact of the pandemic, and the spread of new technology to a huge new customer base that has moved online. In doing so, regulated operators are competing with illegal operators who are more uncompetitive. As a result, traffic to online casinos and betting shops is skyrocketing. The 3SNET network has selected a list of the best offers that expect quality traffic from Asian countries (India, Japan, China, Thailand and others).

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