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The International Federation of Horseracing Authorities (IFHA) has accused the Isle of Man’s Gambling Supervision Commission (GSC) and other online gaming hub authorities of being “pseudo-regulators” as horseracing interests sharpen attacks on the online gambling space.
James Porteous, head of research for the newly formed IFHA Council on Anti-Illegal Betting and Related Crime (IFHA Council), disparagingly likens the GSC to the Philippine gambling regulator in a November bulletin discussing the Philippines’ ban on foreign-facing online gambling operators (POGOs).
Porteous’ article invokes an ongoing criminal investigation into former GSC licensees King Gaming Ltd and Dalmine Ltd and a deregistered cryptocurrency venture, Soteria Solutions, which shared directors and office space with the companies.
He argues that the spread of illegal betting and other online gambling via such alleged syndicates out of Asia and into Europe, the Middle East and other continents has benefited from “regions less familiar with this modus operandi”.
“A recent case in the Isle of Man — like the Philippines, a pseudo-regulator specialising in issuing licences to betting companies targeting Asia — illustrates the global expansion of these operations and their negative impacts,” he writes.
King Gaming’s now-abandoned plans to execute a massive investment in the Isle of Man — purportedly the island’s largest private investment — are evidence of government failure, “underlining that due diligence is often abandoned when such entities begin to deploy their illicit profits”, Porteous wrote.
Porteous is also a senior manager for due diligence and research at the Hong Kong Jockey Club, whose CEO Winfried Engelbrecht-Bresges is a long-time critic of Philippine online gambling operations.
Addressing the migration of POGOs to other markets in search of a regulatory base, Porteous said some operators will move to similar “pseudo-regulator” markets such as East Timor, Vanuatu or Papua New Guinea.
East Timor and Papua New Guinea have expressed interest in POGO-style regulation, with East Timor planning to begin regulation at some point, but neither market has commenced licensing.
Vanuatu has re-launched its own online gambling regulatory structure with new tax incentives and the removal of red tape.
“The very real worry is that organised crime syndicates are exporting their model to new territories, and suborning regulators and officialdom by presenting as ‘legitimate’ enterprises,” Porteous writes.
“Illegal betting is not, as many people wrongly believe, a victimless crime, but a key pillar supporting a vast range of other transnational criminality — a key fact which global stakeholders need to understand.”
IFHA antagonism toward the regulated online gambling space in Asia and further afield follows an article in the IFHA Council’s August bulletin, in which ARF chairman Martin Purbrick criticised “offshore pseudo regulators” broadly, without explicitly condemning the Isle of Man or other jurisdictions.
However, the article includes a table of “offshore betting and gambling licensing hubs” that are implied to be mostly or completely pseudo-regulatory, including small island territories of Isle of Man, Alderney, Curaçao, Antigua and Barbuda, Anjouan, Malta and Vanuatu.
The Isle of Man GSC has strongly defended its record against recent criticism, including from the United Nations Office on Drugs and Crime, which cited criminal incidents and interests similar to those in the IFHA Council article.
However, the Isle of Man government last month sent a senior official to the Philippines to solicit business from outgoing POGO licensees possessing the “integrity and standards required to operate within the Isle of Man”.
Also in November’s bulletin, IFHA Council member and Hong Kong Jockey Club regulatory manager James Ogilvy noted that the IFHA Council recently transitioned from its regional identity as the Asian Racing Federation Council on Anti-Illegal Betting & Related Financial Crime.
Following the transition from an Asian to a global body, the “IFHA Council will allow the sport of racing to speak with one authoritative voice on illegal betting and related criminal matters”, he wrote.
“This is both logical and important for the sport to more effectively engage with government, and major transnational bodies and professional sports to educate and bring about key reforms.”
