Attendees at the Asian Horseracing Congress in Sapporo heard that the illegal gambling market is being “accelerated” by technology and the “McDonaldisation” of illegal websites such as CityBet.
The unregulated illegal betting market, which has long been a thorn in the side of the horse racing industry, can offer bettors higher profits than the heavily taxed legal market, while providing no benefits to the sport.
Rewards for involved parties are encouraging “novel” use of apps such as Instagram, TikTok and Twitch, according to James Porteous, the Hong Kong Jockey Club's president and research director for the Asian Racing Federation's Illegal Gambling and Related Financial Crimes Committee.
“We've found that a theme over the past two years is that technology has accelerated illegal gambling because illegal gambling operators have zero regulatory overhead and zero concerns about reputational or ethical considerations in how they use technology to market to consumers, attract customers and increase sales,” Porteous said.
“Illegal gambling marketing, access and customer base expanded rapidly.”
“Technology has made it easier than ever to engage in illegal gambling. This is because customer recruitment fees for illegal gambling operators can now be very profitable, and so operators have a strong financial incentive to use all technological platforms in increasingly novel ways.”
“Illegal gambling is now mass market like never before.”
Illegal online exchange CityBet has previously claimed to have a trading volume of more than $50 billion a year, and Porteous said monthly traffic to one illegal website had increased 16-fold over the past three years.
CityBet makes almost as much money from Hong Kong races as the Jockey Club, and illegal gambling in the city has increased 350 percent since 2015.
“It's never been easier to become an illegal bookmaker,” Porteous said, adding that illegal operators are offering aspiring bookmakers everything from training, risk management and odds to pirated live streaming and customer relationship management for as little as $7,000.
“We call this franchising the 'McDonaldization' of illegal gambling.
“Citibet is now available not only on its own network of agent-only websites, but also on literally thousands of other URLs through this franchise model.”
Cryptocurrencies have also become popular in the illicit market, siphoning billions of dollars from the horse racing industry and posing a major threat to the integrity of the sport.
“It has never been easier for both parties to move money around,” Porteous said.
“According to one gambling database, there is a 25% increase in so-called grey market bookmakers now accepting cryptocurrencies compared to when we looked at this data in 2020.”
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