SBC News IBIA: Liberal sports betting regulation weakens offshore operators

IBIA: Liberal sports betting regulation weakens offshore operators

A new study on the liberal practices of sports betting regulation and their effects on sports integrity protection has been released by the International Betting Integrity Association (IBIA).

The paper titled ‘The Availability of Sports Betting Products: An Economic and Integrity Analysis’ was done in conjunction with gambling market data and intelligence specialist H2 Gambling Capital

In it, a parallel is drawn between restrictive and liberal market regulation of sports betting products and how they impact consumer protection, regulatory oversight, taxable revenue,the wider market and sports integrity.

Results were drawn by combining data from sports betting operators, IBIA alert data, H2’s proprietary research, as well as support from Brazil’s Instituto Brasileiro de Jogo Responsável, the Canadian Gaming Association, the Netherlands Online Gambling Association, and Responsible Wagering Australia.

Findings show that the ‘channelling rate’ – the availability of sports betting products by onshore regulated operators to meet player demand – is strong, therefore significantly reducing the influence of unlicensed sports betting markets. 

Some sports like football, globally, and tennis in Europe dominate the onshore channelling rate based on their popularity.

What’s more, the presented data challenges some widely circulated assumptions that the size of these markets has bred a hotspot for match-fixing fraud. Evidence also suggests that the artificial restriction of their availability through regulated onshore operators pushes consumers to use more riskier options with unregulated offshore providers. 

Khalid Ali, CEO of IBIA, commented: “Whilst politically attractive, this study confirms that bet restrictions are a blunt and counterproductive instrument. They don’t prevent betting, they just drive it into the unregulated market where most of the problems with sports integrity arise.

“The conclusions are clear: if you want to protect consumers and sports from corrupters, while maximising tax revenues, then allowing a wide range of sports betting products is essential.”

The study further highlights the improved performance of markets that offer a wide variety of sports betting products compared to more conservative ones.

The UK, for example, has a channelling rate of 97% compared to Portugal’s 79%, where betting on football and tennis is restricted to some extent. Other countries exhibiting lower rates include Australia (75%) where online in-play is illegal, and Germany (60%) where some in-play bets are again prohibited. 

Limiting in-play betting could prove to be a major blow for a regulated market and its player base, as IBIA’s study predicts that almost half (47%) of all global online bets will be made through in-play products in 2024, with this number rising to 51% by 2028. 

Germany and Portugal risk losing a combined $750m in taxable revenues to offshore operators by restricting access to the main football betting markets between 2024 and 2028, the report added. 

David Henwood, Director at H2, concluded: “We always fall back on the data. There is much conjecture that one of the main reasons customers use offshore betting sites is because they offer a broader range of product than available onshore. The study findings reinforce that point of view. 

“Limiting the choice of onshore bet types – including live in-play – is basically counter-productive. Instead, markets most successful in limiting offshore play – evidenced by a channelling rate of 90% plus – are the ones that have generally opened their onshore provision to a broad product choice. There is much that can be learnt herein in terms of best practice regulation.”


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