Study Warns Offshore Gambling Regulators Operate Under Fragmented Standards, Leaving Players at Risk

A new report has raised concerns that offshore gambling regulators are applying inconsistent and often opaque standards that leave consumers vulnerable, despite the industry’s rapid global expansion. The study, Mapping the Offshore Gambling Regulators, authored by freelance journalist Steve Menary and Professor Marko Begović of Molde University College in Norway, stresses that the offshore sector, while vital to the gambling economy, suffers from weak oversight and fragmented governance.

“The regulation of offshore gambling is a patchwork,” the report states. “There is considerable variation in licensing, responsible gambling measures, and enforcement across jurisdictions.”

According to the authors, many offshore authorities issue licenses for casinos, poker, sports betting, and lotteries, yet typically impose weaker consumer safeguards than national regulatory systems. Some jurisdictions, they argue, have built entire revenue streams from licensing operators who serve players in markets where such services are not legally permitted.

The study underscores the difficulty of enforcement in a globalized industry. “Offshore operators can target players in jurisdictions where they are not legally permitted to do so, with little effective recourse for consumers,” the authors wrote. While established regulators like those in Malta and Gibraltar are recognized within the sector, others operate with limited transparency and minimal accountability. This uneven framework, the report warns, undermines international efforts to guarantee fair gaming, curb money laundering, and protect vulnerable users.

The research also links offshore licensing failures to wider criminal risks, particularly in Asia, where match-fixing for financial gain is prevalent. The report notes that illegal betting platforms often thrive in Asian markets such as China and India, where gambling is prohibited, using football and cricket as primary draws. Many of these operators, sometimes tied to organized crime, avoid cooperating with sports bodies or law enforcement and instead exploit their services for laundering illicit funds. The authors reference a UNODC report which found that organized crime groups have moved into offshore jurisdictions in Southeast Asia, particularly those hosting “white label” casino operators.

The Philippines is singled out as a prominent case study. Once described as one of the “worst offenders” for enabling money laundering and criminal networks through its Philippine Offshore Gaming Operators (POGOs), the country came under mounting global pressure. In late 2024, President Ferdinand Marcos Jr. responded by ordering a blanket ban on all POGOs after reports of crime linked to the sector, though remnants of these activities remain. The report highlights a key consequence of this crackdown: many operators simply shifted their operations abroad, taking regulatory weaknesses with them.

The Philippines’ regulatory complexity, the study adds, was compounded by multiple overlapping authorities. While PAGCOR, the Philippine Amusement and Gaming Corporation, oversees gaming nationally, other economic zones historically issued their own licenses. Among them were the Cagayan Economic Zone Authority (CEZA), which had been distributing interactive gaming licenses since 2001 and sought exemption from the POGO ban, and the Aurora Pacific Economic Zone and Freeport Authority (APECO), which later transferred its remaining offshore licenses to PAGCOR. Meanwhile, in the Freeport Area of Bataan (FAB), offshore gambling firms misrepresented themselves as business process outsourcing (BPO) companies, prompting PAGCOR to reassert conditional oversight.

The report also highlights Curaçao, one of the world’s most established offshore licensing hubs, which has faced long-standing criticism from the Financial Action Task Force (FATF) for enabling money laundering and match-fixing through its permissive licensing practices. Efforts are now underway to reform the regime through the new National Ordinance on Games of Chance (LOK), designed to align with international standards. However, the study stresses that the effectiveness of these changes remains untested. A Curaçao-based victims’ foundation estimated that before the reforms, operators registered on the island may have run more than 20,000 betting websites worldwide, revealing the sheer scope of its offshore market.

Pressure on jurisdictions like Curaçao has triggered what the report calls a “large-scale flight” of gambling operators to new, poorly monitored territories described as “pseudo jurisdictions.” These regions, often offering cheap and rapid licensing, risk replicating the same issues that global regulators have struggled for years to contain.

“The global gambling industry cannot ignore the offshore sector,” Menary and Begović wrote. “Understanding its regulatory frameworks, strengths, and weaknesses is crucial to developing effective, coordinated responses to the challenges of online gambling.”

As the global online casino and sports betting industry continues to expand into a multibillion-dollar market, the study calls for urgent international cooperation. The authors recommend that regulators pursue minimum standards for licensing, consumer protection, and cross-border enforcement to counteract the risks posed by offshore operators.

By fLEXI tEAM