How the World Lottery Association Approaches Illegal Betting and Works to Protect the Integrity of Sport

By Luca Esposito, Executive Director, World Lottery Association

The World Lottery Association (WLA) is a global organization that represents state-authorized lotteries and suppliers to the industry -- many of which also operate sports betting or have partnerships with the Licensed and Regulated sports betting industry. With more than 150 members from over 80 countries and territories, it is the largest organisation of such state-authorised operators in the world.

The WLA also runs a sports betting integrity unit, and is partnered with United Lotteries for Integrity in Sports (ULIS), a bet monitoring service which provides alerts on suspicious betting activity to members (formerly known as GLMS). As General Secretary of ULIS, I am pleased to join the ARF Council on Anti-Illegal Betting and Related Financial Crime (ARF Council) so that we may collaborate in protecting the integrity of sports from illegal betting, and to explain to readers how seriously the WLA / ULIS see illegal betting, and what we are doing about it.

Illegal betting is a key threat to the integrity of the lotteries and sports betting sector, as well as the broader sports world. In recent years, a combination of innovative technologies and the global pandemic have facilitated the rapid growth and evolution of online betting, and unfortunately also of illegal online betting.
It is complex, vast, and transnational in nature. The global effort to combat illegal betting and maintain sports integrity is vital to ensure that the lotteries and sports betting operators continue to provide legal betting services and products that are safe and secure, while entertaining for all.

Stakeholders from across the entire sports and sports betting ecosystem work together, including regulators, national and international law enforcement agencies and judiciaries, the lotteries, sports federations and organisations (the IOC, FIFA, UEFA), sports betting monitoring organisations, such as the ULIS and others, including the Council of Europe, and INTERPOL, in a network that continues to grow.

The work of WLA member lotteries in supporting good causes has never been more pertinent, especially in light of greater global themes, including economic challenges in the aftermath of the global COVID-19 pandemic, and the impact of climate change and ongoing issues around global energy. To this point, the 2022 edition of the WLA Global Lottery Data Compendium states that 144 WLA lottery and sports betting operators raised the significant amount of USD 79.5 billion for good causes in 2021.

Leading the lotteries in the fight against illegal betting

WLA member lotteries face a constant threat from operators that are not authorized by local regulators to offer gaming products or services in their respective jurisdictions. It is therefore in the collective interest of state-licensed lotteries to protect their territorial integrity.

One of the aims of the WLA is to advance such interests by addressing lottery-related issues that have a global dimension. The large-scale problem of illegal betting requires international cooperation. With its broad worldwide membership, the WLA is well suited to take a leading role in this fight.

There is a high responsibility to offering lottery and betting services. Gaming products are subject to oversight of state authorities and are regulated to mitigate their impact on society. The WLA has always advocated a regulated lottery and betting market and works to support its members within the regulatory framework of their respective jurisdictions.  

On the contrary, illegal operators disregard regulations, avoid taxation and consequently, contributing to society and good causes. They do not follow best practices, nor do they implement responsible gaming measures, such as checking the player’s age, or running Know Your Customer processes, to stop criminals from laundering money from illicit activities.

Many such operators accept cryptocurrency payments, which save processing fees and time, while providing players with almost complete anonymity and instant payments. This means that illegal operators can offer more exciting products and better payout rates.

A clear stand – WLA position on illegal betting

In the WLA Code of Conduct, the association makes its position clear on licensing and jurisdictions. Article 2 states, "no member shall offer gaming services via electronic commerce services unless it has received the necessary permission to do so by the government or authorities competent to grant such authorization for the territory where the gaming services are made available." It further states that, "members shall only offer a gaming service to or accept bets from residents of the jurisdiction(s) whose government or competent authority has granted an authorization to offer the gaming services concerned".

The WLA believes that a gaming operator must possess a license in the jurisdiction where the player is located. Anything else is to be considered an illegal betting operation.

This is in line with the Convention on the Manipulation of Sports Competitions – also known as the Macolin Convention – a legally binding, international treaty established by the Council of Europe in 2014, for which the WLA was among the parties that created the initial draft.

The WLA Illegal Lotteries and Betting Committee

The WLA’s efforts to protect the gaming sector from corruption and criminal activity and maintain the probity of state-authorized lotteries and sports betting operators are undertaken primarily through the work of its Illegal Lotteries and Betting Committee (ILBC).

The ILBC carries out the important task of reviewing and developing tools and resources that help member lotteries maintain territorial integrity with stakeholders, in every region.

It produces informative materials, such as ‘The Macolin Convention: A brief guide on the Council of Europe Convention on the Manipulation of Sports Competitions and why it is important for the lottery and sports betting sector’.

Another example is the brochure on ‘Combatting illegal betting to protect the integrity of sports’, developed with one of the working groups of the WLA Betting Integrity on Sports and Horse Racing Committee (BISHRC). The brochure considers trends and technologies that have contributed to the global expansion of illegal betting operators, and the impact that such operators have on the legal lottery and sports betting sector.

As a means of helping members combat the activities of unauthorized operators, extensive work was undertaken, regarding resellers operating in jurisdictions without authorization. A template of a cease-and-desist letter for these resellers was sent to all members for use in their respective jurisdiction, as well as a template addressed to the concerned multijurisdictional games advising them of the non-authorized sales of their tickets.  The template allows for adjustments to the law of each jurisdiction.
The ILBC also maintains a key database called the Overview of Illegal Lottery and Betting Operations, which provides country fact sheets on the legislative, judicial, and commercial situation regarding bet-on lotteries and courier services in each country. It is available to WLA lottery and sports betting members and to our contributors.

The Committee organizes and participates in different online and physical events, to share its knowledge and expertise with WLA members and the broader lottery and sports betting community.

In the global fight against illegal betting, it is paramount to continue to develop new partnerships and expand our network. The ILBC also examines the role the WLA plays in the global effort to protect sports integrity through collaboration with organizations, such as the ARF Council, the ULIS and other stakeholders mentioned above.

The Macolin Convention – a framework for addressing sports competition manipulation

The Macolin Convention provides jurisdictions with the legislative means and practical tools to deal with specific aspects in the fight against the manipulation of sports competitions and illegal betting, which offers further support to national lotteries to operate with fewer risks, improve player safety, and tackle unfair competition.

If a country has not signed the Macolin Convention, national lotteries can still play a key role in approaching their governments to do so.

In our digital world, the extent and international nature of the manipulation of sports competitions calls for global action. By setting out a clear definition of illegal betting, the Macolin Convention creates a powerful international framework for the cooperation of all relevant stakeholders in the fight against sports competition manipulation.

Signatories agree to establish a National Platform, and to take different types of action to fight against the manipulation of sports competitions and illegal sports betting, such as: gathering and exchanging data and intelligence in a timely manner; promoting and coordinating awareness raising through educational and training programs; conducting research, identifying trends, and compiling data and intelligence.

The Convention also calls for authorities to do their part, within the applicable law of their respective jurisdictions. Some examples of this include closing down illegal betting operations or blocking website access; blocking the financial flow between illegal sports betting operators and consumers; prohibiting illegal betting operations from advertising and requiring all betting organizations to operate lawfully.

If individuals or entities commit criminal offences relating to the manipulation of sports competitions, launder proceeds from such activities or aid and abet such activities, the Convention calls for sanctions to be taken. Punitive measures could include monetary sanctions, deprivation of liberty, confiscation and seizure, and must be in line with domestic law.

The role of the national lotteries

National lotteries that follow the Convention’s provisions and advocate for all members of the global lottery community to do so, not only raise awareness of the different issues, they can also share vital data and intelligence with authorities and other stakeholders and become part of a multijurisdictional network of National Platforms to facilitate the transnational flow of information vital in the global fight against sports competition manipulation.

It is especially important for the lotteries that already work with ULIS to be proactive.

The WLA and the United Lotteries for Integrity in Sports

Following on from the creation in 2009 of the European Lotteries Monitoring System (ELMS), the WLA was mandated to establish a proposal for the creation of a Global Lottery Monitoring System (GLMS) for sports betting during its General Meeting in Montreal in 2012. After close collaboration with EL, this came to fruition in June 2015, when GLMS was officially launched.

Over the past five years, GLMS membership and scope evolved greatly. In October 2022, during the GLMS General Meeting in Vancouver, members approved to change its name to the United Lotteries for Integrity in Sports (ULIS) to reflect the new strategic positioning of the association, which is now the main global state lottery actor to safeguard sports core values of integrity and fair-play. WLA and a growing number of its member lotteries collaborate and support ULIS activities, sharing their knowledge and expertise of sports betting, from their markets.

ULIS offers a complete ecosystem of preventive services, including education, training, and networking. It partners in educational projects, such as IntegriSport, which is co-founded by the European Union and coordinated by the Foundation for Sport Integrity (CSCF); Integriball, supported by UEFA and the Council of Europe, and Keep Crime Out of Sport Plus (KCOOS+), in collaboration with the Council of Europe.

Additionally, ULIS, together with the IOC and INTERPOL, is one of three observers to the Macolin Convention. As such, it is able to participate in meetings of the Follow Up Committee and contribute to subjects under discussion, for instance, the conditions to be met by sports betting operators in the exchange of information within National Platforms, the development of the list of sports organizations, and aspects of the Convention that are relevant to sports betting operators.

I look forward with the ARF Council to further developing our capacity and understanding of these vital issues, so that together we can continue to protect the integrity of racing and other sports from illegal betting.