A recent study published in the Journal of Economic Criminology explores the hurdles associated with estimating the size of illegal gambling markets. Authored by Julien Chopin, Lucas Tosi Rodriguez, and Stefano Caneppele, researchers from the University of Lausanne, Simon Fraser University, and Laval University, Defining and estimating the illegal gambling market: A scoping review, covers 31 selected studies published between 2000 and 2023. The World Lottery Association has funded the research.
The main obstacles singled out by the researchers include economic and financial consequences, regulatory challenges, consumer protection, fraud, and organized crime. While the review examines and distinguishes between bottom-up and top-down estimation technologies, exposing their merits and drawbacks, it also suggests the need for a combined approach.
The scoping review has defined several key pillars for tackling the illegal gambling market, including international cooperation, advanced technological innovations, and stringent regulatory policies. As the authors explain, “Our exploration of the literature underscores the intricacy involved in defining and assessing this illegal market, emphasizing the complex interplay between evolving technologies, regulatory frameworks, and enforcement measures.”
Acquisition of reliable data is among the major difficulties since illegal market operations remain outside the scope of data collection systems and encompass a broad spectrum of products such as casino games and sports betting. The advent of technologies, particularly the unprecedented accessibility provided by online and mobile gambling platforms, has further given rise to the proliferation of illegal gambling.
Unlike legal gambling operators, illicit businesses are not subjected to consumer protection regulations, exposing consumers to multifaceted threats such as non-payment of winnings and a lack of dispute resolution mechanisms.
Moreover, minors are given free access to illegal gambling platforms due to the lack of age verification, thus enhancing the risks of developing problem gambling later in life. Vulnerable populations, such as self-excluded individuals are also exposed to the threats posed by the illegal market.
The damages resulting from illegal gambling go further than financial losses. “Illegal gambling can be used as a channel for money laundering, allowing criminals to convert illegal funds into seemingly legitimate winnings or losses”, as noted by several works included in the scoping review.
Conclusions of the Study
The study called for regulations that effectively reduce the associated risks of the global illegal gambling market. The industry should utilize advanced technologies to monitor, identify, and prosecute unlawful practices. International collaboration among gambling and financial regulators, high-tech companies, and international law enforcement organizations is essential in bolstering enforcement capacities.
Researchers, on the other hand, were encouraged to resort to new data collection techniques, including “leveraging big data analytics, artificial intelligence, and machine learning algorithms.” Ultimately, as the scoping review suggests, to overcome the challenges posed by illegal gambling, policymakers, stakeholders, researchers, and regulators must join forces.
