New Committee Chair discusses WLA work to combat illegal gambling activities

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Interview with CILBC Chair

Robert Chvátal discusses the work of the CILBC, his new role, and what he aims to achieve in his first year.

What is the impact of illegal activities on the regulated lottery and sports betting operators?

Around the world, WLA members face a continuous threat from operators that are not authorized by local regulators to offer gaming products or sports betting services in their respective jurisdictions. For this reason, it is in the common interest of state-licensed lotteries and sports betting operators to protect their territorial integrity.

The WLA has always advocated a regulated lottery and betting market, where state authorities regulate the markets with the aim of ensuring the least negative impact as possible on society, generation of good causes money to the local societies and fair operating conditions for all operators.

The WLA believes that in order for gaming operators to be considered as legal, they must have a license in the jurisdiction in which the player is located. This is in line with the Convention on the Manipulation of Sports Competitions, so called the Macolin Convention, a legally binding, international treaty established by the Council of Europe in 2014, and stated in the WLA Code of Conduct.

One of the ways the WLA supports its members is by dealing with this complex, transnational nature of illegal betting, which requires united, international cooperation.

Therefore, the WLA is, on behalf of its members, leading this initiative through diverse activities, some of which are undertaken with like-minded partners from across the lottery and sports betting ecosystem. Bearing in mind that more than half of WLA members offer sports betting, some of these partners include sports organizations, sports betting monitoring organisations, such as the United Lotteries for Integrity in Sport (ULIS), regulators, law enforcement agencies and other organizations such as INTERPOL and the Council of Europe.

Unfortunately, as illegal operators do not adhere to regulations, avoid taxation and as a result, do not contribute to good causes or society, nor do they implement responsible gaming measures or run Know Your Customer processes to stop criminals from laundering money from illicit activities, they run unfair economical advantage vs. the licensed WLA members. And WLA aims to help their members to limit those illegal operations as much as possible.

What trends and factors continue to drive the global illegal betting markets?

Over the past decade, continued digitalization, accelerated by the global pandemic, has led to increased online gaming and sports betting offers, which use innovative technologies. This has contributed to the rapid growth of the legal and illegal online lottery and sports betting industries.

In addition, many illegal operators accept cryptocurrency payments, which allow players almost complete anonymity, avoiding any anti-money laundering checks, and cheaper instant payments. This means that illegal operators can offer more exciting products and better payout rates, while illicit activities remain hard to trace and stop.

How can technologies such as artificial intelligence help fight illegal operators?

On a positive note, artificial intelligence technologies are being used by our industry to combat match fixing and other illegal betting activities.

As we heard during the different sessions at the WLS 2024 Summit, AI technologies facilitate the rapid monitoring of big data to establish player betting patterns and recognize suspicious activities across games, such as micro-betting, manipulating results, and money laundering and fraud.

Geolocation ensures bets are placed in approved locations, while AI and machine learning enable monitoring betting patterns in real time, to detect fraud or match fixing before it escalates.

Some lotteries have used AI to detect illegal gambling sites, often during sports events such as the World Cup or Euro 2024, and work with authorities to shut them down. Another example is the development of an anti-money laundering (AML) portal, which automatically flags account customers who display behavior associated with high AML risk, which can then be followed up by the compliance team.

How is the CILBC using AI technologies to help WLA members?

At WLA, we represent the global community of state-authorized lotteries and suppliers in over 80 countries with more than 150 members. As the illegal gaming and betting markets grow, it becomes more important to ramp up WLA support members in combatting illegal operators and illicit activities.

To this end, in 2024 we began a project together with the School of Criminal Justice at the University of Lausanne (UNIL), to develop a standardized method for estimating the scale and scope of illegal gambling markets, using artificial intelligence.  

During our second meeting this February, the project advanced to the next stage which defined the six phases to be carried out over the next year including to:

1. Identify relevant indicators for estimating illicit gambling.
2. Develop a standardized methodology that can be applied in different jurisdictions.
3. Gather stakeholder feedback to refine the methodology.
4. Design an analytical model and prepare datasets.
5. Validate the methodology, compare it with existing models and test it.
6. Share results in a comprehensive report that includes findings, challenges and recommendations for future applications.

How would you summarize your first months in the role of Chair of the CILBC and what do you plan to achieve in the first year?

Following my election and nomination to Chair the CILBC, my priority was to meet all my colleagues, understand the direction and work of the Committee, in order to form my opinion on the issues, and get involved in the Committee work and activities.

In 2025, I aim, with my colleagues, to continue the work to deliver a standardized method for estimating the scale and scope of illegal gambling markets, and improving reporting processes to regulators, and law enforcement agencies, in order to limit such illegal operations.

Also, we intend to establish a position on the role of resellers and courier services, to assist so that our lottery members in creating a transparent ecosystem, that would enable a level playing field in the lottery sector.

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