IAGA SUMMIT BELFAST GREY MARKET EXPOSURE YIELD SEC


Te UKGC’s Sarah Gardner said in January at an DGA event: “Tere is an argument, sometimes made in Great Britain, that just because there are illegal sites and unregulated gambling - with no protections and bad outcomes for consumers - we should scale back or stop some of the interventions we think we need to make in the regulated market to mitigate against the risk of consumers jumping from regulated gambling into unregulated gambling. I cannot accept this argument. Indeed, I believe that no regulator should knowingly allow bad practices of the type we are talking about here, practices which can cause harm, to carry on in the regulated market. And whilst we – like you – have a level of concern about illegal online gambling and it will always be an important focus for us, we have no time for those risks being overstated, without credible evidence, either.” What do you make of this statement?


As the founder and CEO of Yield Sec, I fully support the UKGC's stance on the importance of regulating and mitigating against the risk of consumers jumping from regulated gambling into unregulated gambling. Te fact that illegal sites and unregulated gambling exist with no protections and bad outcomes for consumers is concerning, and as Sarah Gardner stated, no regulator should knowingly allow these bad practices to carry on in the regulated market.


Credible evidence now exists. Yield Sec produces it every second of every day in each marketplace we monitor, and our work in the UK highlighted that whilst some have attempted to use ‘the black market’ as a smokescreen to avoid new, or indeed any regulation, we do not deal with the reality of illegal operations for the sake of winning an argument. We don’t even use the phrase ‘the black market’ due to the inherent misunderstanding it creates by making one think of another market.


Te salient fact of the UK is this: the share of total online gambling accruing to illegal operators is low, at less than two per cent in volume terms across 2022. What is alarming is the rate of growth and infiltration of amongst Illegals versus Legals, into what we at Yield Sec term ‘vulnerability vacuums’. Tese are created, unintentionally and often unknowingly, by legislation and regulation, to target communities such as those with problem gambling behaviour, or to isolate children, for example.


If these vacuums are not monitored, policed and made safe, with the tools a platform like Yield Sec provides, then responsible gaming and player protection measures are not being engaged as law makers intended, and those target communities will be targeted by villains from illegal gambling and affiliate operations, as well as with other attendant crime like loan- sharking, that follows behind.


It is important to monitor and police vulnerability vacuums created by legislation and regulation to ensure that player protection


“Credible evidence now exists. Yield Sec produces it every second of every day in each marketplace we monitor, and our work in the UK highlighted that whilst some have


attempted to use ‘the black market’ as a smokescreen to avoid new, or indeed any


regulation, we do not deal with the reality of illegal operations for the sake of winning an


argument. We don’t even use the phrase ‘the black market’ due to the inherent


misunderstanding it creates by making one think of another market.”


illegal operators simply needs to be monitored, policed and enforced against in line with the abilities of a platform like Yield Sec – if illegal gambling is constantly put to the test over its existence, across sites, apps, ads, social and search presence, it will be deprived of the most important oxygen – marketing – which we’ve unknowingly enabled it with for years.


How do we fix the illegal problem?


Start monitoring and assessing the total marketplace now and benchmark what is really going on, both from a legal and illegal perspective. It's crucial to get the whole picture instead of simply making assumptions. We must move away from measures that have failed and instead create actionable outputs from a single source of truth because betting and gaming should not fund crime.


Tthere needs to be a focus on


creating a level playing field for licensed and regulated operators by taking an evolutionary approach to the burden of regulation and taxation. This can help to incentivise operators to


comply with the law and operate within the legal framework, while also


providing a more attractive


alternative to consumers than illegal gambling operators provide.”


measures are effective and engaged as law makers intended. Te argument that interventions in the regulated market should be scaled back or stopped because of the existence of illegal and unregulated gambling is not acceptable, and credible evidence – such as that which Yield Sec produces - should be provided to support any claims of overstated risks.


Overall, I believe that responsible gambling and player protection measures should be prioritized and enforced to ensure a safe, fair and sustainable gambling ecosystem for all legal stakeholders – the risk of consumers jumping to


Te problem of illegal online gambling is complex and multifaceted, and therefore, there is no single solution to fix it. However, certain measures can be taken to address this issue, and I won’t apologise for linking all of them to Yield Sec given the work my team and I have put into making the platform the single source of truth for the online gambling ecosystem.


Firstly, governments and regulators need to take a proactive approach to identify and shut down illegal gambling operators. Tis can be achieved through the use of Yield Sec’s advanced technologies and intelligence gathering to track and monitor illegal activity.


Secondly, there needs to be a greater focus on education and awareness-raising for consumers about the risks associated with illegal gambling. A simple run on the bank scenario could be created by regulatory marketing that highlights the dangers of depositing and betting with XYZ Operators since we “are targeting them now”.


Tirdly, there needs to be increased collaboration between governments, regulators, and industry stakeholders to develop a coordinated approach to tackle illegal gambling. Tis can involve sharing intelligence, expertise, and resources to identify and disrupt illegal activity.


Finally, there needs to be a focus on creating a level playing field for licensed and regulated operators by taking an evolutionary approach to the burden of regulation and taxation. Tis can help to incentivise operators to comply with the law and operate within the legal framework, while also providing a more attractive alternative to consumers than illegal gambling operators provide.


Legalisation and regulation do not, in and of themselves, create fair, safe and sustainable marketplaces. Crime needs to be cleaned up and kept out – a lesson from Las Vegas that shows in the brick-and-mortar reality and is one that inspired me to innovate Yield Sec.


WIRE / PULSE / INSIGHT / REPORTS P63


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