Most Australians have no intent to break the law as they go about their online activities, but many could be doing exactly that through an emerging fraudulent scheme known as unregulated online gambling. We sat down with Effy and Lachlan from Bank Australia’s Customer Protection team to see how people can recognise and protect themselves from this illegal and increasingly common online activity.
What is unregulated online gambling?
Unregulated online gambling is a relatively new phenomenon that encompasses all online betting platforms that lack the proper authorisation to operate within Australia. “The criminals are trying new ways,” Lachlan explains. “As we develop systems to prevent and combat financial crime, they adapt and find loopholes, like fake online poker sites.”
Unlike licensed operators, these services do not verify their users. This creates a veil of anonymity that puts users at risk of engaging with criminal organisations and facilitating illicit activities, including money laundering.
The platforms often lure users with attractive bonuses and have seemingly legitimate interfaces, which makes it difficult for consumers to discern between genuine and fraudulent services.
How the fraud works
Most of these fake gambling websites operate similarly, enticing users through social media ads and word of mouth. There are even Facebook groups dedicated to this type of online gambling, with some amassing thousands of members. Victims may be drawn in by offers of sign-up bonuses, or by friends claiming to have won money – both of which can be powerful motivators. The allure of quick financial gain or winning money back can lead users to chase losses, which means they get deeper into the fraud. “It’s hard financial times right now,” Lachlan says. “People are struggling, so this can seem like an easy win.”
However, the underlying operations can be quite sinister. Users typically deposit money via tools like PayID, and not only do they receive minimal or no actual winnings in return, but they could also be moving money around for criminal organisations trying to avoid detection.
“What we see is a pattern of payments that resemble money laundering,” Effy says. “People are sending and receiving payments from individuals they’ve never met, creating a façade of legitimacy.”
Impact on consumers
Unregulated gambling is illegal under Australian law, and if it’s aiding criminal activity, the user may be ultimately held responsible. It’s one of the rare instances when a victim of online fraud could also be considered a perpetrator of crime in the eyes of the law.
“It’s essential to understand that just because you’re not aware of the implications doesn’t mean you’re not at risk,” Lachlan says. “People need to be educated about the signs of unregulated gambling and the possible ramifications.”
Being cautious of online gambling sites
To help reduce risk of falling victim to unregulated online gambling, consumers should consider these red flags:
- Limited registration requirements: Unregulated gambling websites won’t be listed on Australian government registers of authorised operators. They also likely won’t require you to register all of your details, beyond your banking details. “The companies that operate legally in Australia require you to verify your identity, and therefore know who is actually depositing money and using their services,” Lachlan says.
- Lack of transparency: Legitimate platforms will have clear contact details and company information. Transactions should come from recognisable business accounts, not random names. “If you’re receiving third-party payments without knowing where they’re coming from, that’s a major red flag,” Effy says.
- Flashy promotions: Excessive promotional offers are often red flags. “A lot of them will have attractive-looking individuals on the front pages, flashing lights, pop ups the second you hit the website, and free sign-up bonuses,” Lachlan says. “It's really all the bells and whistles.”
Education is key
As the issue of unregulated gambling continues to grow and regulators adapt and react, Bank Australia’s main focus is safeguarding our customers from this emerging form of online crime.
“We hope that through education, we can mitigate the risks associated with unregulated gambling,” Effy says. “It’s about protecting our customers and helping them make informed decisions.”
Always do your due diligence, and remember: “If something seems too good to be true, it probably is,” Effy says.
For those struggling with gambling addiction or related financial issues, support is available. Bank Australia encourages individuals to reach out to our Customer Support team for assistance. Alternatively, assistance can also be found online at the Australian Government’s Gambling Support page.
