Blacklisting: the good, the bad and the alternative

The UK has the largest regulated online gambling market in the world, generating £4.7bn gross gambling yield (GGY) each year and is set to account for half of GGY in the UK over the next few years. But despite this apparent success, online gambling sites still face a number of challenges, particularly relating to regional restrictions and licensing laws.

Gambling is subject to a complex regulatory framework that differs greatly from one country to another, and the borderless nature of the internet makes it difficult for operators to ensure their users come from markets where they hold the appropriate licence and gambling is permitted. The simplicity of crossing virtual borders also increases the opportunity for criminal activities and fraud.

In countries such as Poland, Slovakia, and the Czech Republic authorities are taking drastic action, obliging internet service providers (ISPs) to blacklist gambling sites that operate in multiple territories and are not licensed locally. ISPs in Denmark recently resisted blocking access to 24 gambling sites that did not hold a Danish licence but were compelled to do so following legal proceedings. Conversely, in Quebec, Canada they tried to pass a law blocking online gaming sites, but this was deemed to be unconstitutional.

So, what are the pros and cons of ISPs blacklisting gambling websites and is this something UK authorities should consider or is there a more effective alternative? Blacklisting can seem like an easy option for authorities and provides a threat-centred approach, blocking access to all sites that could potentially cause problems. A blanket ban on international gambling sites ensures local restrictions cannot be breached and reduces the potential for fraudsters from other countries to take advantage of users.

But using a one-size-fits-all solution to a multifaceted issue can result in websites being unfairly blocked even when they are licensed and operating legally and responsibly. Unsurprisingly, it is already negatively impacting the industry, with Bet-at-home reporting a 13% drop in revenues due to Poland’s online gambling blacklist, which now contains 2,400 domains. Blacklisting also has a wider impact on the user, with restrictions imposed at the ISP level limiting the universal access for which the internet is designed and affecting basic rights such as freedom of choice.

Smarter tactics

Rather than adopting broad-brush tactics such as blacklisting at ISP level, authorities should concentrate their efforts on encouraging the gambling websites themselves to employ more sophisticated technologies such as IP intelligence. The most granular IP data provides accurate information about the user’s location, down to postcode level and without them becoming personally identifiable, meaning the website operator can determine where the user is located, which laws and regulations apply to that country, and whether they are licensed to provide gambling services in that market. The ability to recognise circumvented IPs (VPNs, Tor, etcetera) acts as an additional key identifier for precise and accurate enforcement of country-based restrictions.

In addition, IP intelligence can be used to authenticate user log-ins with connection characteristics such as autonomous system number (ASN), device type, and connection speed. Where suspicious or unlawful activity is detected a user can be blocked or asked to verify their identity before continuing, helping both authorities and gambling websites to combat fraudulent practices.

Enforcing complex regional laws and licensing restrictions will always be a challenge with online gambling as users seek to access services across virtual borders, but blacklisting does not provide the detail needed for the task. Both authorities and gambling websites need to take a more sophisticated approach using technologies such as IP intelligence to gain an accurate picture of the user’s location and connection to ensure country-specific gambling restrictions are complied with.