An article from Samir Saran, President of premier Indian think tank the Observer Research Foundation, recently made sweeping remarks surrounding online casinos and made the mistake of conflating modern regulated sites with unlicensed, illegal operations.
In the article, Mr. Saran says: "Offshore gambling websites often channel black money, engage in illicit transactions and launder wealth through financial intermediaries."
Here are some of the main reasons why Mr. Saran is incorrect in his assessment and how the international gambling industry is taking huge strides to tackle the issue of illegal gambling operations.
Licensed Online Casinos Take Steps To Protect Customers
Mr. Saran's assertion that "offshore gambling websites often channel black money" is not entirely correct. The majority of the sites he refers to all function under international gaming licenses. Under these conditions, operators must meet the guidelines set out by their licensors or face suspension.
It is true some illegal betting do operate in India’s unregulated betting space, which allows for black money to course through India and other dark corners of this sector of the industry. However, it is neither in the interest of the industry or the government of India for unchecked money laundering to remain unchallenged in its current guise..
One of the main requirements of all international authorities is the Know Your Customer (KYC) procedure. All customers must provide documentation that verifies their identity before any play can occur at a licensed site.
These documents include, but are not limited to, national identification documents such as a passport or driving license and bank statements that prove the player's registered address. Furthermore, online casino safety teams can request Source Of Wealth proof to verify any funds in circulation. Failure on the customer's part to supply any of the above will likely result in a suspension of their account.
Why Lack Of Regulation Is A Problem
More countries than ever before are signing up to national legislation to legalise and liberalise the online casino economy.
However, India remains without a national oversight body, despite millions of its citizens engaging in IPL betting and other practices. According to a paper from leading industry body ENV Media, the law enforcement issues are stark.
The study - titled International Gambling Licenses Current Scope And Future Outlook - outlines why countries like India need to embrace complete industry regulation.
"Unlicensed casinos are under no obligation to report questionable activity and uphold consumer protection standards against operator fraud, glitches in RNG (or game-rigging), payment issues; fake bonus offers; non-payment of winnings, or any other problems. Wherever no regulation is present, unlicensed operators take the chance to offer unverified gaming services that open up possibilities of match-fixing, odds manipulation, and other cyber crimes like personal data phishing."
"In a nation with widespread illegal betting and gambling (reportedly worth well over $100bn annually), criminal activity has had the chance to flourish and continues to engage public resources and law-enforcement efforts. Emerging markets (India in particular but not only) will benefit from creating their own Central regulatory framework, a Gambling oversight body, and a Consumer Data protection regulation."
Why Samir Saran Is Careless In His View
Mr. Saran's remarks displays the issue the gambling industry faces in countries such as India.
Despite overwhelming evidence indicating the huge positives to national regulation, there remains an inherent distrust from the political elite in traditional conservative nations.
He is right that black money is coursing through a minority of online casinos but wrong to suggest it is an issue among licensed casinos. The key to tackling the problem he speaks of is full regulation. A refusal to acknowledge the industry's modern practices feels reductive and counter-intuitive.
Summing up its arguments for embracing national regulation, the ENV paper writes: "The goal of growing yet unregulated markets should be to achieve high consumer and public interest protection levels through modern legislation. Local jurisdiction licensing and legal channeling has proven as the most efficient means of achieving such ambitious long-term benefits."