“White-labeling” blurring boundaries between illegal/legal sites: ARF

The increasing popularity of “white-labeling” services is blurring the distinction between legal and illegal online gambling sites, particularly in Asia, and is a key concern, the Asian Racing Federation said.
In a major analysis entitled “The State of Illegal Betting Report” the ARF points out that it is becoming increasingly difficult to tell the difference between legal and illegal operations, especially for members of the public. 
‘White-labeling’ is the provision of all or part of a betting website and its operations, often including the license, which is then branded by a separate operator. 
In 2020, the UK Gambling Commission (UKGC) reported that there were at that time more than 700 white-label partners within the industry and stated that this model was “increasingly popular … [to] bring global exposure to an operator’s products”. The Gambling Commission said “there is a concern that unlicensed operators who would potentially not pass the Commission’s initial licensing suitability checks are looking to use the white-label model to provide gambling services in Great Britain.”
It points to one example where a white-label provider failed to oversee its websites, which sent thousands of emails to customers who had self-excluded as well as to have used inappropriate advertising containing nudity. The provider was fined GBP600,000 ($750,000). 
The report said these licenses are particularly popular for those operators seeking to market their services to audiences in Asia through association with major sports, such as the English Premier League. 
To advertise on pitch side hoardings, the operator must be U.K.-licensed, yet many of the white-label firms are unlikely to be able to pass the country’s stringent regulatory requirements.
“There is thus a thriving business providing white-label websites to such operators to allow them to advertise in Chinese, Thai, Indonesian, Vietnamese and other Asian languages during EPL games– even though their product is typically illegal in such jurisdictions,” it said.
The adverts will often divert users to Asia-facing mirror websites as the sole purpose of these arrangements is to advertise illegal betting in Asia. 
Aside from less stringent regulation, another key advantage for the white-label operator is the lower cost to set up a business. However, this low-entry is offset by the costly fees that need to be paid upstream to the main licensee.
This is also a concern as it leads to aggressive marketing to consumers through social media and other platforms, the report said.