How Yield Sec is removing black market influences

Yield Sec has brought to market the industry’s first ‘regulatory support solution’ to help governments and regulators safeguard licensed market conditions against the growing threat of black-market actors.

Delivering a critical resource, SBC spoke to supervisory board of Jack Symons, Bill Pascrell, III and Steen Madsen on Yield Sec’s development and ambitions, in which its data and monitoring solution seeks to establish common ground in the industry’s fight against it most clear and present danger.

SBC: Can you give SBC readers a quick overview of what the Yield Sec product is?

Yield Sec is a technical and advisory solution for government and regulators that has one key aim across regulated betting and gaming markets: the provision of a protected, licensed marketplace.

It is the first effective tool to help regulators and government to monitor, police and enforce the licensed, regulated marketplace for betting and gaming, by removing black-market influence and instability, and preventing the theft of legitimate tax yield by illicit black market operators, through their websites and apps. Essentially, all regulators can use Yield Sec to focus on both player protection and tax yield.

By working with governments and regulators, we hope that we can become the catalyst for a truly level, licensed playing field across betting and gaming. The solution additionally provides for sincere player protection since it removes the easy availability of irresponsible and unwelcome, unlicensed sites from everyone, including minors and those struggling with problems caused by gambling-related harm. It understands how the betting and gaming black market works online, and our system works to find it, flag it and block it.

SBC: What was the thought process behind the product?

We approached this from the perspective of the customer experience. We believe that there simply is not a widespread understanding by the general public of the licensing framework for betting and gaming. People don’t understand why we have it, what it raises in taxation for public spending, and through contributions by the licensed industry towards good causes, including gambling education and gambling-related harm reduction. None of these are sustainable without licensed marketplace protection.

Additionally, there was no solution to make player protection effective when you coldly consider the impact of the black market upon any licensed, regulated regime. The licensed sites are policed, but from a customer perspective, black market sites are equally available via online channels. How do we prevent gambling-related harm and protect players when only the licensed sites one can visit from a Google search are compliant, but there are hundreds more black market sites and apps present upon the same search result, targeting the same consumers?

We created the Yield Sec solution to provide a sustainable marketplace and sincere player protection by removing the influence and instability that black market operators bring to the regulation and right management needed for betting and gaming products – which have always required responsibility in how they are offered, sold and consumed.

SBC: What is it that makes Yield Sec stand out?

We believe that Yield Sec is a unique solution – it is the first product in quantifying and clarifying the extent to which the regulated marketplace for betting and gaming, and the raising of vital taxation revenue, is stolen by black market sites and apps.

Every regulated and soon to license market needs this solution, which blocks the black market to create a protected, licensed level playing field which can, reliably and predictably, raise taxes, collect monies for good causes, and protect players from gambling-related harm, by ensuring products are offered with uniform responsibility.

There can be no serious suggestion of player protection without excluding the black market. Measures to reduce gambling-related harm are shared amongst licensed operators, overseen by the regulator, and the black market is effectively removed from the risk it offers the public, who are often unaware of the dangers of black market participation.

SBC: Regulators seem to be playing a game of naming noncompliant operators and issuing penalties – how important is it that we change the conversation away from punishing licensed operators towards safeguarding the industry from the black-market?

It’s vital that all betting and gaming industry stakeholders – government, regulator, industry, media, gambling education and harm-prevention bodies, players and customers – can all share an informed, realistic debate about a business that has products that must, always, be offered and consumed responsibly.

As part of Yield Sec operations in each regulated territory, we will host a Yield Sec Regulatory Roundtable each and every quarter. It will bring together all viewpoints and opinions together for a face to face or virtual gathering, and a regular, formal opportunity for all stakeholders to share reliable data and insights from Yield Sec operations alongside the government and regulator for whom we work.

The game of name, blame, fine and shame has brought the licensed industry into progressive disrepute, but the action is unsurprising given that most regulators are, by law, only able to effectively target the licensed operators – and where there are breaches, of course these need to be dealt with, and rightly so.

The shift we all need to make, over time, is to better understand and deal with the black market threat to all stakeholder goals. The additional costs to society of not dealing with the black market are clear – those at risk of gambling-related harm do not know where to effectively turn when facing a problem. Escaping a spiral of continued, compulsive play is almost impossible when no gambling cessation helpline or tool has historically worked to effectively exclude the black market.

Yield Sec will achieve this and provide for meaningful player protection. Caring for the vulnerable is ineffective if we only place conditions upon licensed operators but then leave the unregulated black market openly available to create harm.

SBC: With countries such as Sweden having a low channelisation rate, how important is industry collaboration in tackling this? And what can Yield Sec do to support this?

The shadow of the black market across betting and gaming has long existed but is more obvious, today, than at any time. The more that markets regulate, adapt and experiment with aspects of the business like bonusing, staking, activity and deposit caps, ID verification, KYC, AML, and further – as we’ve seen in Sweden – the more the black market spectre comes to tempt players back to the “gambling they knew and loved” and can still get, offshore but online, from unlicensed, illicit operators.

No CRM and retention bonuses at licensed Swedish sites? No problem. Just hit Google and search for bonus bets or bonus casinos and you will find dozens, if not hundreds, of options. None are licensed. None protect their players. None pay any taxes or adjust their operations, advertising and business as usual functions to become and remain compliant. But, that’s the point with the black market.

Yield Sec works across three easy to understand processes: monitoring, policing and enforcement. At each stage we seek the input and co-operation of all betting and gaming stakeholders. Just as we have a Yield Sec Blocklist, we also have a Yield Sec Whitelist, collated with the regulator, which will allow internet service providers (ISPs) to know and verify, in real-time, licensed sites, whether on behalf of an operator, directly, or by a referral affiliate.

Trying to exclude the black market is like trying to catch smoke – as soon as you block one threat, it moves and emerges elsewhere, online. We’ve built for this and our system relies on automation and expert human insight and input in each market instance of Yield Sec to ensure we stay one step ahead of the battle against the black market, at every turn.

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