Since the establishment of Yield Sec in 2022, the company has been deeply involved in discussions regarding the complex relationships between grey, white, and black operators in the gambling sector. A pressing issue that has come to light is the growing exploitation of self-exclusion measures, a phenomenon we call “Vulnerability Victimisation” (VV).
Our focus at Yield Sec is on understanding the interplay between the lawful and illicit aspects of the gambling industry. The problem of duality is prevalent in all regulated markets, and it’s within this context that we’ve recognized a major concern.
Licensed gambling operators are legally bound to prevent and abstain from enticing problem gamblers or minors who have used self-exclusion services to restrict their own access to gambling platforms. There have been instances where legal operators have slipped up and engaged with self-excluded individuals, leading to investigations and strict penalties.
Nevertheless, the insights from the Yield Sec monitoring and surveillance platform indicate that these breaches are just the tip of the iceberg. The real issue lies in a massive, unregulated domain where illegal operators actively seek out vulnerable groups as a fundamental element of their strategy.
Central to this troubling trend are two core metrics that guide illegal entities: Cost per Acquisition (CPA) and Revenue per Player (RPP). By focusing on the self-excluded demographic ignored by legal operators, these illegal entities can dramatically lower their CPA.
More disturbingly, these operators use search terms related to self-exclusion loopholes and utilize powerful marketing tools to deliver betting and gaming services to these vulnerable groups on an unprecedented scale, leading to robust RPP figures.
The consequence is grim: those barred from regulated operators due to responsible gambling policies are left with the illegal market as their sole outlet. The lack of monitoring and regulation in these areas only magnifies the risks, creating potentially explosive scenarios as problem gambling meets the manipulative hands of illegal operators.
Our mission at Yield Sec is to equip regulators with the tools not just to monitor but to actively combat the dangers that arise. The extensive problem has been evident through our observation of Vulnerability Victimisation in key European markets throughout 2023.
In the UK, we spotlighted illegal operators’ deliberate targeting of Gamstop self-excluded individuals as early as January 2023. Although they made up only 2% of the market share, these illegal entities have seen a significant increase in presence since 2021, primarily through exploiting these vulnerable players.
Their approach is comprehensive, utilizing search, advertisements, apps, websites, and affiliates to reach their targets. Searching the phrases “Not on Gamstop,” “Non Gamstop,” and “Get out of Gamstop” have greatly facilitated their growth.
We’ve witnessed the landscape morph rapidly. What began with thousands of Google search engine results and numerous affiliates has erupted into millions of search results, illustrating the alarming persistence of these illegal operators in bypassing self-exclusion protocols.
Similarly, in Sweden, our platform identified widespread instances of Vulnerability Victimisation. We observed patterns aligning with those in the UK, intensifying during peak gambling periods such as sports seasons and holidays.
In Denmark, a mature market like the UK has seen illegal activities surpass the latter in market infiltration. These operators craftily navigate around self-exclusion and know-your-customer (KYC) regulations, profiting from the lack of active monitoring.
The Netherlands, wrestling with its recent regulation, reveals that regulatory strategies targeting offshore illegals show deficient actual enforcement success. Illegal operators continue to thrive, exploiting the naivety of distinguishing between legal and illicit activities, particularly targeting self-exclusion scheme CRUKS.
Germany faces a similar dilemma. With a history of legal ambiguity, the emergence of regulated gambling has not stifled the proliferation of unlicensed entities, many of which zero in on those part of the Oasis self-exclusion programme.
Our analysis of these various European markets paints a threatening picture – illegal operators systematically exploit individuals within self-exclusion schemes, securing a constant stream of players that positively impact their revenue.
Current countermeasures like site or app blocking, and regulatory talks with media giants like Google, often fall short. We liken the dynamics of online illegal gambling to the illicit drug trade – addressing it at one juncture doesn’t solve the problem; it displaces it.
Recognizing this, Yield Sec’s mission is to provide around-the-clock monitoring, policing, and enforcement – an ongoing vigil rather than a one-off intervention. Our objective is to redirect economic benefits, such as revenue and jobs, from illicit operations back to legal stakeholders, thereby supporting community and commerce.
Should we fail to act, we risk letting crime thrive online at the expense of society’s most vulnerable. Yield Sec stands prepared to offer marketplace intelligence services essential for the legal gambling community.
For further information, visit YieldSec.com and discover how we’re advancing the fight against the exploitation of protective gambling measures.
