March 21, 2019

Growing match-fixing probe in tennis snares more players

French police have questioned another batch of tennis players in a growing investigation into a match-fixing syndicate suspected of paying out hundreds of thousands of dollars to fix low-level matches, judicial officials said Thursday.

Seven French players were taken into custody this week and later released, taking the total number questioned in France so far to 17, the officials said. An initial batch of four players was first questioned in January . The officials spoke on condition of anonymity because they aren't authorized to publicly discuss the investigation.

The probe is being led by authorities in Belgium, where the syndicate's suspected ringleader, an Armenian, is based. Belgian authorities say Grigor Sargsyan remains in custody in his home, monitored with an electronic bracelet.

Investigators say corrupted players bought off by the fixers knew Sargsyan as "Maestro". The massive scheme, organized via encrypted messaging and involving dozens of low-ranked players in small tournaments with little prize money, is believed to have spread tentacles to more than a half-dozen countries, including the United States. Belgian authorities say they've requested assistance from the FBI, as well as counterparts in Egypt, Slovakia, Bulgaria, the Netherlands and Germany.

This week's additional detentions were first reported Thursday by French sports daily L'Equipe. Officials didn't identify the players.

A Belgian investigator said five of the French players questioned so far have admitted to taking money from the syndicate to fix matches, and that one player believed to have fixed about two dozen matches confessed to police that he pocketed 30,000 euros ($ 34,000).

The probe has grown far bigger than Belgian authorities initially expected when they first swept up Sargsyan and others in a wave of arrests in June. He faces organized crime, match-fixing, money laundering and forgery charges.

The number of players suspected of involvement continues to grow. Belgian investigators, who have been pouring through phone records and other evidence, believe they have now identified 137 players suspected of fixing or attempted fixing. The syndicate allegedly paid 500 to 3,000 euros ($570 to $3,400) for fixed matches, sets or games. Police say the syndicate employed mules, people hired for a few dollars to place bets on fixed matches that were small enough to slip under the radar of gambling watchdogs.

The Belgian investigator said evidence collected so far suggests the syndicate knew other match-fixers in Spain but they weren't working together. Another investigator said several players who took money from the syndicate told the French police during questioning that they did so because prize monies at low-level tournaments are too small to pay their expenses.

Players told the police that they often saw the so-called Maestro at such tournaments, working to recruit other accomplices, and they described him as friendly and non-threatening, the investigator said.

So far, France has the biggest number of players questioned in the probe. The first four were named by investigators as Jules Okala, 21; Mick Lescure, 25; Yannick Thivant, 32; and Jerome Inzerillo, 29. None operated in the highest spheres of tennis. The career-best singles ranking of any of them was 354, reached by Inzerillo in 2012.

L'Equipe said it interviewed Inzerillo, accompanied by his lawyer, this week and that he told the newspaper that he had never been approached to fix a match.

March 14, 2019

Former Arsenal star Paul Merson: My life's fallen apart

Former Arsenal and Aston Villa star Paul Merson admits he's suffered a gambling addiction relapse.

In a new ITV documentary set to air next week on, the father-of-three reveals he has once again been gripped by gambling.

Speaking to producers of the show, Merson breaks down and says he is "struggling badly" with life.

He adds: "Life's fallen apart - gambling...I've just completely lost control, I've completely, again. I'm digging a hole - I can't get out of it.

"It's the worst addiction in the world."

He added: "It's so tiring it's unbelievable.

"Mentally draining, just sitting there, thinking where am I going to get more money to do this? It's's literally like a crack addict. It is like a crack addict.

"Exactly like that.

"But, with crack, you couldn't spend that kind of money on crack, it's impossible. Impossible."

February 21, 2019

Is it true that Indian government is planning to legalise online gambling?

Rumours are abuzz about Indian government’s plans to regulate online gambling in the country. Overall, gambling is prohibited in India, apart from a few jurisdictions. However, there have been recent staccato calls for legalisation of online gambling. In fact, there exists a few companies who make use of the grey area in the legality of online gambling in the country and offer their services in a surrogate manner.

The recent rumours find their origin in a 150-page long report addressed to the government from the Law Commission of India (LCI). In this report, the LCI recommends the legalisation of online gambling in a regulated manner because it observes that the government cannot practically prevent people from accessing online betting sites. The current law has no provision for this.

The LCI also points to the immense potential for tax revenue that the federal government could benefit from, should it choose to regulate online gambling. In recent statements, the Indian government have said that they are looking into the reports from the LCI with maximum interest.

Despite all this, the rumours are unlikely to be true in the immediate future. The current central government is nearing the end of its five-year term. The general elections will be held in May later this year. The government, which is facing a tough battle for a second term, may not risk doing anything unconventional or what can be dubbed as politically incorrect at this juncture.

February 05, 2019

Kambi signs deal to relaunch Mybet sportsbook in Germany

Kambi signs deal to relaunch Mybet sportsbook in Germany Kambi has today signed a deal to power the relaunch of Mybet, one of Germany’s most recognisable sports betting brands now under new ownership.

Due to the recent insolvency of its previous owner, MyBet Holding SE, Mybet was withdrawn from the market in the fall of 2018 following 15 years of operation, however, the mybet brand and digital assets have since been purchased by a new investment group.

Under the terms of today’s multi-year agreement, Kambi will provide Rhinoceros Operations Ltd, the new operator of mybet, with its complete Sportsbook and full range of managed services, enabling the company to relaunch the brand into the growing German online market.

The Mybet relaunch is scheduled to take place during H1 2019, while the contract also provides a provision for Rhinoceros Operations to launch a Kambi Sportsbook with other brands under its ownership.

Kristian NylĂ©n, Kambi Chief Executive Officer, said: “The story of Mybet illustrates why operators cannot afford to rely purely on the strength of their brand and history in a market. Online sports bettors are increasingly promiscuous so operators must ensure they have sufficient scale in their product investments to provide exciting sports betting experiences at all times to remain competitive. Partnering with a high-quality supplier such as Kambi solves that challenge.

“We are excited by the potential of Mybet. The brand remains strong and, with the quality the Kambi Sportsbook offers, we believe Mybet can once again become a leading player in the German market and elsewhere.”

Tobias Carlsson, CEO of the Rhinoceros Group, said: “Our agreement with Kambi is one of the cornerstones on which we will build the future of a great brand. Mybet was one of the pioneers in the German sports betting field, and together with Kambi and our other partners we will do everything in our power to revive that legacy and bring players the experience they desire and deserve.”

February 01, 2019

Arrest warrants out for 394 in largest online illegal betting raid in modern Turkey's history

Arrest warrants were issued for 394 people Friday in mass simultaneous operations carried out by Turkish police across the country against online betting and gambling sites operating illegally.

The Cybercrime Division Branch of the Istanbul Security Directorate launched the raids in 40 provinces to capture 394 suspects, 207 of which were in Istanbul, for violating the law on online gambling and gaming regulations. Some 5,000 police officers are taking part in the raids.

So far, cybercrime units have seized 42 million Turkish liras in cash, in addition to $94,000 and 133,000 euros. Police have said the sites generated somewhere around TL 3.5 billion. The operations against gambling rings and illegal betting outfits are still continuing.

Investigations found that 72 front companies were established in the cosmetics, logistics and food sectors to hide their betting activities relating to football matches and other sports events. As part of the probes, financial analyses were conducted on 849 people and 4,345 bank accounts affiliated with the suspects and companies. The total money traffic was found out to be TL 2.145 billion, $12.120 million, 9.366 million euros, 7 million Russian rubles and TL 1.8 million worth of gold, in addition to smaller amounts of British pounds, Swiss francs and Canadian dollars.

Police units also informed local authorities that administrative fines ranging from TL 8,500 to TL 35,000 will be issued for 455 gamblers.

Turkey struggles to crack down on illegal betting as a country where football is the nation's favorite sport and a way of earning income for gambling addicts. The country implemented a law last year to facilitate the seizure of revenues for illegal betting organizers, but the gangs managed to circumvent the strict monitoring of bank accounts. Authorities say they stepped up cooperation with banks to detect accounts used by gangs and betting.

January 23, 2019

British bookies go from favourites to American outsiders

What starts in the US, the cliche goes, inevitably ends up in the UK (burger restaurants, assaulting fellow shoppers on Black Friday and syphilis are favourite examples). But the Americans are not always so keen to embrace our exports.

There are, of course, examples of Brits and our brands smashing it in the US: the broadcaster Alistair Cooke, the Beatles and (so the company’s advertising slogan told us) the industrial conglomerate Hanson, which liked to brag how it was “a company from over here that’s doing rather well over there”. But those occasional triumphs are offset with a long list of wonderful-sounding sales pitches that never quite seemed to deliver much – apart from swingeing losses.

Which brings us to the UK gambling industry, a trade that has been talking about cracking America for a period seemingly longer than Cooke’s whole career.

Apart from the odd arrest of British business folk, very little ever came of these ambitious plans. But then, last May, everything appeared to change. The value of London-listed gambling firms – including 888, Paddy Power Betfair and William Hill – collectively surged by more than £1.5bn after the US supreme court struck down a nationwide ban on sports betting that had stood for 26 years. The Professional and Amateur Sports Protection Act of 1992 (Paspa) – which effectively outlawed sports betting in the US with the exception of a few states – was suddenly unconstitutional.

Gambling execs rejoiced. Cigars were lit; deals were unveiled; and share prices went briskly, er, down.

In a note by analysts at Canaccord earlier this month, as the stockbroker studied the gambling sector in a reporting season, the number-crunchers observed: “The UK sector is trading on close to a four-year valuation low, and there is a lot of bad news baked into the price.”

There are all sorts of factors playing into that, of course. There are the inevitable tax rises and regulatory changes that the industry has to contend with in Europe: but not everything is going perfectly with the American dream, either.

There, what bookies might have gained on the Paspa swings they are now fretting about losing on the Wire Act roundabout.

Earlier this month the US Department of Justice performed a U-turn by ruling that the Wire Act – which it had previously said outlawed only cross-state wire communications for sports betting – also contains “prohibitions [that] sweep beyond sports gambling”.

Heads were scratched, share prices retreated and consolidation plans were given even more of a hearing than usual.

In a note in advance of a trading statement from William Hill last week, analysts at the investment bank Berenberg said that the bookie was “now ripe to be a takeover target”, after its share price almost halved over the past year.

Hill’s has been at the forefront of efforts in the US, too, so taking a punt on the company means betting heavily that a liberalising US market will compensate for the lost revenues in its established jurisdictions, where fixed-odds betting terminals have been gelded and the bookies fear more regulation to prevent addiction.

Cooke, of course, once filed a dispatch about this. In a 2001 Letter from America, he reported: “Heartening news this week that a drug has appeared experimentally which promises, one day, to cure even compulsive gamblers.”

That day has yet to arrive. There’s a parallel in there somewhere.

January 11, 2019

Italy sees rise in sports betting revenue in 2018

Italy’s sports betting market witnessed a 10.5 per cent growth in revenue in 2018 compared to that of 2017.

The regulatory body of Italy, Agenzia delle Dogane e dei Monopoli (ADM), released the results, reporting that the industry generated €1.4 billion in 2018.

ADM also reports that betting turnover for last year reached the €10.9 billion mark, approximately €1 billion higher than 2017. The land-based sector also increased its revenue by 7 per cent in 2018 to €840 million.

While online betting registered a 16 per cent increase over 2017 to €643 million, it is a shy growth when compared to 2017’s total increase figure of 44.5 per cent, and in a year that did not have major sports tournaments such as the FIFA World Cup.

December’s results did not help the full number for 2018, as sports revenue decreased 55 per cent year-on-year to €96.4 million. Both the land-based and online verticals experienced a decline, the latter to €47 million or a 43 per cent decrease.

January 07, 2019

Inside the secret fight against match-fixing in football

An African referee is identified as vulnerable to corruption. He’s persuaded to ensure that a World Cup qualifier has at least three goals. With half-time approaching, it’s still 0-0 and the official gets twitchy. A cross hits a defender on the knee. He awards a penalty for handball. Despite uproarious protests, the spot-kick is converted. The game ends 2-1.

A European club win the first leg of a Champions League match by a large margin. With their progress assured, it’s arranged for them to concede late in the second fixture. With three minutes left, their defence switches off. A ball is punted upfield and a forward heads it goalward. The goalkeeper barely attempts a save.

Fixers arrange for a group of English sixth-tier players to join a club on the other side of the world. Unquestioningly accepted by the new employers, a previously solid side suddenly start losing, and heavily. A young goalkeeper in central Europe is befriended by a rich man. He gets him into clubs, gets him girls and treats him like a rock star. A family debt is soon paid off. Later, he asks him to concede a goal in a friendly game. Who would that harm? This is then used as leverage against him to commit more significant on-field fraud.

There are numerous ways to fix a match. Some are simple, others are sophisticated and barely believable. But when the true beauty of sport is its unpredictability, how on earth is it possible to prove if odd behaviour is down to human error or something a lot more sinister? How can all the above scenarios get busted? Just follow the money.

You’ve probably never heard of Sportradar, and despite the company kindly agreeing to a feature in FourFourTwo, it’s quite happy that way. We’ve stopped by its London offices – it has 34 worldwide, with 1,900 employees – under the condition that we don’t disclose the location, or use any real names.

If this seems like the paranoia of a counter-intelligence unit, that’s because it is. As the world’s foremost experts in betting-related fraud and sports corruption, Sportradar is not mucking around. The people they’re battling against include many international mafias, who often see gambling as a good way to launder money. Death threats were issued to UEFA inspectors in February after the exposure of Albanian outfit Skenderbeu’s involvement in fixing, and a member of the Nepal side appeared to threaten Sportradar’s team after players were put on trial for throwing a match.

Some of the figures involved in the worldwide gambling industry are gobsmacking: an estimated €1.5 trillion a year, with a game like the Champions League final attracting around €1 billion in bets (with 70% of this punting going on in Asia, much of it being unregulated, such figures can never be exact).

As our Sportradar spokesman Ian (not his real name) explains to us: “People don’t realise how big the international market is, and there’s no real way of knowing how big exactly. But it’s a crap-ton of money.”

So how do you go about monitoring such an unwieldy beast? Data, data and more data. Sportradar was started in 2001 by Carsten Koerl (his real name), a German entrepreneur who helped to establish online betting company Bwin.

Koerl recognised that internet gambling would produce a plethora of new bookmakers, but that many would lack the expertise to set odds accurately. A reputable service provider would be needed, and this was Betradar – the part of Sportradar that sells industry-leading information to turf accountants worldwide.

The ‘integrity services’ part arrived in 2005 as a by-product. “Whatever you need to operate a bookie, we can deliver,” says Ian. “But as part of our relationship with the betting industry, we get their information back. It soon became clear that by using this, we can see when bookmakers move away from the rest of the market. It always happens for a reason.”

What many casual punters might not realise is that while odds partly reflect how likely something is to happen, they also reflect bookmakers balancing risk. So if a big amount of money comes in on Crewe to beat Exeter, operators may compensate by offering more attractive odds on Exeter to beat Crewe, to cover potential losses. By the same reasoning, if a fixing group are betting big on a late goal being scored with a certain operator, that bookie will alter its odds to reflect this.

“If one bookmaker is getting a lot of money on something that nobody else is, there can be many innocent reasons,” says Ian. “Maybe they’ve got some injury information earlier than everyone else or they’ve got an excellent analyst – or maybe the bookie’s got it wrong that day, so they realise their mistake and adjust.”

But if one of the 550-plus online gambling companies that Sportradar work with suddenly offers prices that deviate wildly, it can be a smoking gun for match-fixing. “If a lot of people bet on something with unnatural confidence, it could be because someone’s engineered the result.”

The company therefore developed the Fraud Detection System (FDS) – an algorithm that scans 280,000 competitive fixtures annually across 17 sports looking for anomalies. “The algorithms don’t ask questions, they create alerts,” says Ian. “So we need a second stage, called qualitative analysis. This is our team of more than 100 experts. They work 24/7. As soon as an alert pops up, they have 72 hours to determine whether it is a legitimate or suspicious betting pattern.”

The number crunchers carry out their research, chatting to a network of bookmakers and journalists if required. “Maybe our person out there on the ground knows that it was the captain’s birthday so everyone got drunk,” says Ian. “We look at all options. You can’t just say: ‘This is fixing’. You’d be destroying reputations. We’re not a machine gun, we’re a sniper rifle. When we shoot, we get it right. We always start with the betting patterns, but it takes more than that to be credible.”

Sportradar only escalates an incident when it is 100% sure of foul play. To date, this has included 3,800 sports fixtures. The figure has climbed from 146 in 2009 to 650 last year.

This rise reflects more games being surveyed rather than an increase in criminality: Ian estimates that 0.5% to 1% of the matches they monitor are affected. As a result, Sportradar reports have been used in 36 criminal convictions and 251 sporting sanctions (suspensions, bans and fines) to date, with more on the docket.

Sportradar’s experience has provided a unique insight into how fixing works. “It’s not generally some guy bowling up and saying, ‘Here’s 50k, please lose 5-0’,” adds Ian. “Fixers usually groom players and officials. They take time, do them favours and entertain them. Then they’ll call in the favours. And once you do something for them they say: ‘You’ve just fixed a match for me, now you’re my bitch’. Prostitutes or drugs can be used as leverage, while older players are sometimes used to influence and recruit younger ones.”

Often at the core of these shady dealings are large criminal groups. “The Balkan, Italian and Asian mafia are involved,” explains Ian. “The owners of clubs can also be criminals. They tell players: ‘Unfortunately you’re going to lose today’. In some places, players don’t ask questions if they value their kneecaps.”

Fixers can even arrange fixtures. Notorious Singaporean super-fixer Wilson Raj Perumal organised numerous friendlies, for which he would pick the referee. “There’s a preponderance of rigged friendlies, because there’s nothing on the line and participants are more willing to agree,” says Ian. Referees are a common target. “They control the result pretty closely, especially if the fixers are betting on total goals. You don’t care who scores them, you just care that there are three or four. So you dish out some penalties.”

This proved the undoing of Ghana’s Joseph Lamptey, who was caught trying to influence goals scored in a World Cup qualifier between South Africa and Senegal last year. His decision to blow for a penalty after the ball hit Senegal defender Kalidou Koulibaly on the knee was ridiculous, but it’s the kind of blunder referees often make. It was the algorithm that caught him. FIFA – a Sportradar partner – decided to replay a World Cup qualifier due to fixing for the first time, and Lamptey was banned for life.

Perumal’s syndicate was involved in the 2013 Southern Stars scandal. Four players and a coach from the Melbourne club were convicted, along with a Malaysian fixer. English players were involved in play so obviously suspect that their opponents regularly questioned what was happening.

“I was panicking, getting a call when we were losing 2-0 and the boss saying this better f**king happen,” defender Reiss Noel told police about one game. “I felt threatened as we weren’t getting the goals required.” Sportradar’s algorithm had again alerted the authorities, and Noel and a team-mate, goalkeeper Joe Woolley, were banned for life by FIFA after admitting helping to fix matches.

“These guys weren’t exactly brain surgeons,” says Ian. “Police were at the game, and you’ve got a fixer on the phone actually speaking to one player, and him then saying to the goalkeeper: ‘We need to let another in’. Sometimes the footage you watch of keepers jumping the wrong way is almost comical.”

However, there’s also a degree of cat-and-mouse between Sportradar and criminals that wouldn’t look out of place in The Wire. “A few years ago someone realised you don’t even need to manipulate a performance to fix a match – you can just manipulate the concept of a performance,” explains Ian. This led to the extraordinary phenomenon of ‘ghost games’, in which entire matches were faked.

“In order for bookmakers to cover football, they simply need data on what is happening. So it was created from nothing – they sent through details about imaginary goals being scored after they had bet on them.”

Among the games that never kicked off included Maldives Under-21s against Turkmenistan Under-21s from 2012, and Portugal’s Freamunde against Spain’s Ponferradina in 2014. “People innovate – it’s like doping,” says Ian. “We’ve also had some fixers trying not to disrupt the odds by spreading a bet across lots of bookies. But our system now aggregates, so we can catch those spikes, too.”

Sportradar can’t take down the mafia, but it's working with people who can. After the Southern Stars scandal was exposed in conjunction with Australian police forces, more law enforcement agencies got involved: Europol are partners and Interpol are close collaborators.

“The floodgates opened, because forces realised that our system isn’t witchcraft,” says Ian. Sportradar now helps to educate police worldwide, free of charge. It has even developed the system to the point where it identified a way to single out specific individual bets that disrupt odds, so law enforcers can follow up those accounts.

A number of countries are also setting up national platforms to fight the problem and share their resources, with Sportradar offering crucial insight once again. Making major arrests will always be complicated, though. The evidence required for criminal convictions (‘beyond reasonable doubt’) is greater than that needed for sporting sanctions (‘to comfortable satisfaction’).

“Sports organisations can ban people but they can’t put them in prison,” says Ian. “Our FDS is good at pinpointing who’s executing a fix, but the problem is they’re footsoldiers – a 17-year-old kid who made a mistake and can’t get out of the web he’s in. We want the puppetmasters.”

As a result, Sportradar now has a specialist group, set up by a former British military counter-intelligence operative, attempting to join the dots in these international crimes. The more information they share, the more criminal cases they can get across the line. This means careful vetting of who works for Sportradar, too.

“We need to check the background of employees,” says Ian. “We need to be wary if someone seems lenient. None of our analysts are allowed to bet, and our level of encryption is extremely high. All our servers are in-house, we have no information on the cloud and we’re quiet on social media. We know we’re causing a headache for people who could make a lot of money, so we might be targeted.”

The big question many football supporters might want to ask, alas, remains unanswered. How much match-fixing takes place in - for example - the Premier League?

“Worth a try,” laughs Ian. “Sadly, I can’t talk about any specific league.” He will discuss the game’s relative vulnerability, however. “It is quite difficult to fix. Something like tennis is easier. There, you can even have a match that’s arranged, but somehow appears fair to the players. We agree that I’ll win the first set, you win the second set, and then we play for real in the third. It’s still the best man wins, and we both get to bet.”

While there’s a different algorithm for the Premier League as opposed to the Croatian third division, to reflect profile and bet spend, we shouldn't assume that the biggest names are not involved. “Rich people can have gambling debts and can be sleeping with the wrong people,” says Ian. “They can be vulnerable. It may be easier to fix a badminton match, but how much liquidity is in the badminton market? Not much. Football has plenty of liquidity.”

It’s almost time to leave Sportradar’s nerve centre when an alert pops up: there’s some suspicious activity in a southern European clash. Our analyst – let’s call him Bob – guides us through several screens. An Asian betting company is offering bafflingly low odds on there being another goal scored, despite it being the 88th minute of the match. Some wild punts are clearly being made. The fix is in, we decide, and watch the closing moments play out on a digital screen. But nothing happens. Bob concludes that this is likely to end up designated as a ‘failed fix’ – a possible dodgy deal that didn’t work. Paperwork will be filed.

A former professional gambler, Bob got into this gig after frequently getting foiled by some of the dubious odds movements he now fights. “I enjoy getting to see it all,” he says. And he still goes home to watch football after work.

Ian admits his work can leave him “disenchanted”, though. “The point of sport is the unpredictability of a result, and the honesty of the battle,” he says. “But this is the world we live in.” Until things change radically, Sportradar will keep following the money.

January 06, 2019

YouTube stars promoted gambling to kids. Now they have to answer to their peers.

Popular YouTubers like Jake Paul and Bryan “RiceGum” Le promoted a shady gambling website to their millions of subscribers, many of whom are children. And now they’re in the middle of a debate about the ethics and the responsibility that come with legions of young, highly impressionable superfans.

On December 30, Jake Paul, the younger brother of Logan Paul, who made headlines around this time last year for videotaping a suicide victim, published a video that looked exactly like many others on YouTube: a bait-y thumbnail (Paul’s stupefied expression surrounded by cutouts of objects, numbers, and random punctuation marks) with a comically hyperbolic title: “I Spent $5,000 ON MYSTERY BOXES & You WONT Believe What I Got (insane).”

The difference is that the video is an ad, which Paul disclosed in the video’s description, for Mystery Brand, a website where users pay different amounts of money — anywhere from a few bucks to $299 — to open digital boxes. There are “hypebeast” boxes, gaming boxes, boxes that only contain different types of watches, and even holiday-themed boxes, which might be filled with a 27-inch iMac, a Chanel purse, Off-White sneakers, or a Supreme jacket. More likely though, you’ll end up with a fidget spinner, or in the case of the Chanel box, which costs $99 to open, a vial of Chanel nail polish (retail price: $28).

A Daily Beast report Wednesday stated that some boxes claimed to include items like Lamborghini sports cars, Ferraris, and “The Most Expensive Los Angeles Realty $250,000,000” (which was actually a photo of a Bel Air mansion listed for $188 million that is not owned by Mystery Brand and therefore was not its to give away), though these items no longer appear to be available in any of the boxes currently on the site.

Even on a surface level, it’s pretty clear that Mystery Brand is shady — and that, along with the fact that many of the creators promoting it have an audience largely made up of children, is why many, many YouTubers have formed a chorus of criticism against Paul, RiceGum, and others.

According to its terms and conditions, Mystery Brand seems to be operated out of Poland. (“These terms are interpreted and are subject to the jurisdiction and the laws of Poland.”) And use of the website is “strictly prohibited for persons under 13 or persons not reached the age of majority.” It also says that those under “the age of majority” may not be eligible to receive the prizes they’ve won.

Elsewhere, however, it states that any user may not receive the items they’ve won, and according to reports, that’s exactly what’s happened. Multiple Reddit threads devoted to demystifying Mystery Brand show customers claiming that products have taken months to ship, if they ever do at all; that tracking numbers don’t work; or that they were forced to pay upward of $40 for shipping.

But there are infinite retail scams on the internet for YouTubers to promote. The problem for many is that despite YouTube’s strict gambling policies (advertisements may not promote gambling in areas where it is illegal, nor to minors), it doesn’t seem to classify Mystery Brand’s digital betting game as gambling. And Jake Paul, for instance, has gone on the record to say that his target audience is children between the ages of 8 and 16.

YouTube, meanwhile, is mostly concerned with creators clearly labeling their content as sponsored — which both Jake Paul and RiceGum did. The company gave the following statement to Vox:

YouTube believes that creators should be transparent with their audiences if their content includes paid promotion of any kind. Our policies make it clear that YouTube creators are responsible for ensuring their content complies with local laws, regulations and YouTube Community Guidelines. If content is found to violate these policies, we take action to ensure the integrity of our platform, which can include removing content.

It’s unclear whether or not the Federal Trade Commission, which sets regulations for sponsored content and advertising, is concerned with YouTubers promoting gambling websites to minors — an inquiry from Vox to the FTC came back with an automatic reply that the organization was closed due to the partial government shutdown.

RiceGum, for his part, did apologize in a video after YouTube’s most-subscribed star, PewDiePie, and Ethan Klein of h3h3 Productions called him out in their own videos covering the drama (although not before complaining that other YouTubers with largely young followings — the channel Reaction Zoom, Zane Hijazi, and Guava Juice among them — also promoted Mystery Brand within the last few months).

The YouTubers criticizing these channels’ promotion of Mystery Brand have focused both on the scamminess of the website itself as well as the responsibility that comes with having millions of young followers — both topics that have been lightning rods in YouTube drama over the past few years. PewDiePie in particular has been criticized for amplifying anti-Semitic rhetoric to his own young audience.

With fewer ad dollars floating around YouTube, some creators have turned to shadier dealings, like in the case of the recent controversy surrounding beauty bloggers being paid by cosmetics companies to post negative reviews about rival brands’ products. And it’s nothing compared to the debate about what duty the biggest YouTuber in the world has in making sure his content doesn’t encourage teenagers to view beliefs embraced by the alt-right as hilarious satire.

But the rewards for YouTubers who promote sites like Mystery Brand are too high for many of them to pass up. Creators like PewDiePie and Keemstar have both confirmed that they’d turned down huge sums of money to promote Mystery Brand or similar sites; Keemstar, for instance, said on Twitter he was offered $100,000 to promote it, while in his apology video Ricegum implied that his fee was much higher.

The experience of using Mystery Brand — the big bet, the thrill of opening a box, and the payoff of actually seeing the prizes IRL — has all the ingredients of a successful YouTube video.

Not only is it a form of digital unboxing, one of the site’s most lucrative tropes, but the idea of the surprise box stems from gaming culture, where players pay money to open loot boxes full of skins, weapons, and other virtual swag. (Loot boxes, incidentally, were the subject of their own Mystery Brand-like scandal in 2016, when the popular Twitch streamer James “Phantoml0rd” Varga promoted a website where users could gamble for weapon skins in the game Counter-Strike: Global Offensive and was banned after he was accused of secretly owning it.)

Similarly, those who promoted Mystery Brand have been widely suspected to have enjoyed false odds — many YouTubers have come to the conclusion that Mystery Brand knows exactly when someone like Paul or RiceGum is playing so that they’ll end up with one of its high-quality prizes.

“They’re just desperate for money and views,” YouTube creator Antonio Chavez told The Verge. “The channels have been going down for a while now, as far as analytics go. Their channels are big channels still, but they’re used to this kind of money — maybe six figure sponsorships all the time — and when they see that going down, they’ll take any kind of sponsorship.”

YouTube stresses that the responsibility for transparency in advertising lies with the creator, but some have criticized the company for allowing users to be misled. One artist whose avatar artwork was stolen by Mystery Brand told The Verge that “It’s amazing that YouTube can defend it at all. It’s the same as, ‘All the evidence might point to Russian collusion but let’s give them the benefit of the doubt.’”

Mystery Brand is what happens when a bunch of YouTube trends converge: a decrease in ad dollars, thereby encouraging creators to take on paid promotions no matter how sketchy; the dopamine rush of the unboxing video; and enough controversy for every YouTube creator to publish their own reaction video. And if it’s like most YouTube drama, the betting odds are high that it’s just getting started.

January 03, 2019

Denmark gambling regulator hails success against illegal market

Denmark’s regulated online gambling market has resulted in a “limited” market for illegal gambling operators, although social media gambling and skin betting remain a problem.

A new report by Denmark’s Spillemyndigheden regulatory agency claims that the number of unauthorized gambling sites offering services to local gamblers without local permission identified remains “continuously low.”

Through December 2018, Spillemyndigheden conducted three web searches to identify illegal gambling operators and sites promoting such operations. These searches identified 742 possibly problematic websites, more than twice the number identified in 2017, although Spillemyndigheden noted that the 2018 searches were “broader than usual to ensure that previously legal sites have not changed their contents.”

These 742 problematic sites resulted in 22 petitions sent to the website operators notifying them of their violation of the Danish Act on Gambling. Spillemyndigheden eventually ordered local internet service providers to block 18 of the offending gambling sites who failed to respond to these petitions.

While the number of petitions sent to rogue operators was below the 31 notices issued in 2017, the 18 domain-blocking orders was the highest since 2012 – the year Denmark launched its regulated online market – when 20 orders were issued. In fact, four of the five previous years had seen zero domains blocked by local ISPs. However, 2018’s numbers were goosed by a February court decision that overruled the ISP’s objections to Spillemyndigheden’s orders.

Spillemyndigheden’s web searches similarly identified 95 potentially problematic eSports ‘skin betting’ sites, which led to 17 petitions and six blocking orders. The regulator said it expects an additional 20-25 skin betting sites will be included in the next batch of blocking orders sent to ISPs.

Spillemyndigheden also sounded the alarm regarding illegal gambling via Facebook groups, usually in the form of lotteries that compete with the local monopoly. Four such Facebook groups were closed in 2018 following “a cooperation” with the social network.

Denmark’s regulated online gambling market has been hailed as a model for other European markets to follow, i.e. not capping the number of online licensees and allowing licensees to offer a wide range of gambling products. The online market set a new quarterly revenue record this summer, thanks in part to the 2018 FIFA World Cup, which Spillemyndigheden holds up as further evidence of its enforcement efforts.