Isle of scam

Isle of Man’s links to illegal gambling revealed by UN organized crime report

Compliance+More

Oct 24, 2024

Report details multi-million dollar fraud related to IoM licensee.
In +More: anti-OSB campaign in Missouri pulls ads.
1xBet subject of ‘fake sport’ claims.
Massachusetts lawsuit goes after lost fantasy wager cash.
A window of opportunity opens up for French iCasino.

But just how it came to be given that name, really I'd like to know.

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King’s ransom

Vice and a slice: The Isle of Man-based online gaming company King Gaming employed people who were previously convicted by the Chinese authorities for conducting a massive fraud operation that swindled millions of dollars from victims in China, according to a new UN report.

The UN Drugs and Crime Unit’s trips-of-the-tongue-easily titled Transnational Organized Crime and the Convergence of Cyber-Enabled Fraud, Underground Banking, and Technological Innovation: A Shifting Threat Landscape report from this month suggested Asian crime syndicates have expanded beyond the Golden Triangle.
Noting the arrests made by the Isle of Man police in April of seven employees of King Gaming, the report pointed out King Gaming’s landing page-only website was “consistent with shell iGaming businesses used as fronts by criminal groups for laundering criminal proceeds.”

Mekong risky: The report added that King Gaming’s unnamed co-founder is also listed as chair of a Mekong-based payment and investment firm that has previously been linked with investment fraud on various scam alert websites.

Further, the co-founder also has “strong connections” to one Zhao Wei, a noted figure who has been linked with organized crime groups in the Golden Triangle Special Economic Zone.
The report suggested the “precise nature of their business dealings remains unclear,” but the two were pictured together in 2018.

Out of control: Meanwhile, the report noted the “growing attention” being paid by the authorities to the links between “shadowy Asian online betting companies” and top-flight football clubs via sponsorship deals.

Notably, it pointed to “apparent connections” between prolific Isle of Man white-label provider TGP Europe – under whose flag most Asian-facing operators fly in the UK – and jailed junket operator Alvin Chau’s Suncity Group.

“More specifically, Chau and Suncity appear to have controlled The Gaming Platform (TGP) Europe and Asia, as indicated by several documented connections between the entities,” the report revealed.

It went on to say that, while the UK Gambling Commission is “legally unable to confirm or deny these documented connections,” there is evidence that several operators licensed in the UK through TGP Europe have been “found deeply engaged in illegal betting and, in some cases, more serious and disturbing criminality.”

Clear and present danger: The report cites the instance of one unnamed online gambling group which, it said, represents “one of the clearest examples of criminality.”

It is an entity with “obscure ownership” that has secured deals with several Premier League clubs and operates websites that targets several illegal betting markets in East and Southeast Asia, Australia and elsewhere.
It is licensed in the UK via TGP Europe, and analysis of trademarks and IP rights shows links to a Curaçao, Malta and UK-registered entity.

The report added that examination of the payment infrastructure for the site indicated a “heavy dependence on underground banking and money laundering networks.”

This is done via “rotating mule accounts used to service and obfuscate multi-currency fiat and crypto payments and settlements.”
It noted this is a “necessity for operators targeting illegal betting markets.”

Ball’s in their court: Further, the report said the information on the links between Asian bookies and Premier League clubs “should raise serious concerns for relevant enforcement agencies and regulatory bodies in several jurisdictions.”

“It is worth noting that this case is not unique,” it added.
“Similar arrangements and partnerships have been documented between many major league sports teams and illegal online gambling platforms with obscure ownership structures and business operations.”

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Ohio: The iCasino bill introduced by Sen. Niraj Antani could have its first hearing next month when the state legislative session returns on November 13. The bill proposes a 15% tax rate with prospective operators required to pay a $100k application fee for a license.

Licenses would reset every year, with operators also required to pay a $300k licensing fee and $250k to a problem gambling fund on an annual basis.
However, the bill is currently unassigned and does not have any sponsors outside of Antani.

Missouri: The campaign against the OSB measure in the state may be faltering after local media reported the Missourians Against the Deceptive Online Gambling Amendment group has pulled ~$1.2m of previously planned ad spend.

A spokesperson told the Missouri Independent the ads were pulled to enable the campaign to focus on “grassroots outreach and community conversations.”

The International Betting Integrity Association reported 42 alerts in Q3, down from 91 the previous quarter. The 42 incidents concerned five sports across 18 countries, with football and tennis accounting for 67% of all alerts.

The national gambling regulator in Sweden, Spelinspektionen, is not effective enough in monitoring the licensed gambling market in the country, according to a report from the country’s National Audit Office.

The office also said the government has limited the regulator’s ability to combat illegal gambling by failing to accurately clarify exactly what constitutes an illegal operator.

DraftKings and the legal team representing former employee Michael Hermalyn are “negotiating a potential resolution” to a federal lawsuit that began in February 2024, according to a court filing.

+More careers

Integrity Compliance 360 has announced that the former director of the New Jersey Division of Gaming Enforcement, David Rebuck, is to join the firm as a special advisor.

1xBet investigation

24-hour party people: Offering betting on non-professional “short football” games on an “industrial scale” is among the charges that have been laid at the door of controversial betting site 1xBet by the investigative journalism site bellingcat.

Bellingcat’s analysis of 1xBet’s website found that 1,297 games of short football were live-streamed during a 24-hour period in September.
The site claims 1xBet streams videos from various locations hosting other non-professional tournaments, ranging from basketball, volleyball and floorball to ice hockey, tennis and table tennis.
Games are played in marquee warehouses and converted arenas that “look like sets from the television series Squid Game,” it added.
Belingcat also uncovered what appears to be football games involving children from a number of Russian schools.

A rum bunch: 1xBet has been dogged by controversy for much of its existence. The Cyprus-based company was founded by three Russians – Dmitry Kazorin, Roman Semiokhin and Sergey Karshkov – but is prohibited in that country and also found itself in regulatory hot water in Ukraine.

It has also been the subject of a probe on the part of the UK Gambling Commission.
This came after a Sunday Times investigation alleged the company was promoting a casino featuring topless croupiers, as well as taking bets on children’s sports and on cockfighting live streams.

Fantasy suit

You don’t half pick’em: A lawsuit has been filed in Massachusetts against Yahoo Fantasy Sports, PrizePicks and Underdog Fantasy, which hopes to recover potentially millions of dollars wagered on so-called prop and pick’em bets.

The 33-page suit was filed in the Massachusetts Superior Court by Massachusetts resident Joseph Curran.
It claims the three were authorized in the state to operate as fantasy sports platforms, not gambling sites.

Join me: According to state law, other bettors are allowed to join Curran within three months. After that, the suit says any remaining money recovered will go to charity.

The suit admits that both PrizePicks and Underdog stopped offering the types of bets mentioned in March but claims Yahoo might still be offering these sorts of wagers.
The Massachusetts Gaming Commission sent cease-and-desist letters to companies including Yahoo in February.
According to the suit seen by Front Office Sports, Curran is seeking to hold the fantasy companies “accountable for their willful disregard of Massachusetts law.”

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French window

Une ouverture: The French government has inserted an amendment into its draft finance bill that would allow for the introduction of iCasino.

“This opening is the result of aligning the gaming framework with our main European neighbors, France being, along with Cyprus, the only country in the European Union to ban online casino gaming,” the government said within the introduction to its draft.
Under the terms of the amendment, iCasino would be taxed at 55.6%, which is in line with the tax on lottery.

At a loss: The government said the move was driven by a desire on the part of the government to reduce its indebtedness.

However, there was an immediate response from the B&M casino sector, which claimed any iCasino licensing would result in job losses and ~€450m in lost taxes.

The trade body Casinos de France had previously called for iCasino regulation but with an initial three-year exclusivity for land-based operators.

The book of Mormon

Joy division: A California card room owned by members of a Mormon polygamist sect has been fined $900k by US money laundering watchdogs, the first such penalty against a casino in six years.

Lake Elsinore Hotel & Casino, also known as the Sahara Dunes Casino, “willfully failed” to comply with Bank Secrecy Act requirements between 2014 and 2019, according to the order by the Financial Crimes Enforcement Network (FinCEN).
Among the long list of failures, punters often bypassed the cash cage, details of payments were not often recorded and one employee told management that bartenders “are cashing out customers for their chips and we have no way of knowing if it is a person that we are tracking.”
Only two employees were recognised as compliance personnel, despite the framework requiring a much larger team, and no members of staff had received any money laundering training since 2014.
Game floor personnel were said to be “confused as to what information must be recorded” in regard to spotting potential criminal activity.
External compliance advisers were retained by the casino since the mid-2000s, but their advice was only given ad-hoc.

New order: In 2019, California regulators tried to shut the casino down, as it had been operating with provisional licenses for two decades in a nondescript brick building containing a 22-table card room.

An investigation by the California Bureau of Gambling Control into the card room is ongoing.
The casino owner, Ted Kingston, is a member of the controversial Kingston Group Mormon polygamist sect based in Utah. His brother and fellow Order member Joseph, was co-owner until his death from coronavirus in 2020.
In March 2017, the Southern Poverty Law Center labelled the sect a “blood cult” that “mixes incest and white supremacy with old-fashioned capitalism.”

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