Guest: Heathcliff Farrugia, International Relations, SiGMA
Host: Jack Crabtree
Heathcliff Farrugia of SiGMA, formerly of the Malta Gaming Authority, joins episode 11 of the Gamecheck Insider podcast to explain who is actually checking the sites nobody licensed.
Heathcliff spent seven years at the MGA before moving into consultancy and then to SiGMA, where he leads the international relations team. His job now is bringing governments, regulators and trade associations into the room with the industry across eight summits on five continents.
Episode 11 covers how SiGMA gets dozens of regulators onto the same stage, why prohibition of a digital product cannot work, the enforcement gap around unlicensed operators, whether harmonisation is realistic, crypto casinos moving towards regulation, and why falling channelisation should worry everyone.
0:10 Seven years at the MGA, then consultancy, then SiGMA
0:29 Bridging the gap between regulators and the industry
2:45 Over 60 regulators confirmed for Rome, and why SiGMA World is different
4:19 Partnering with GRAF to host its annual meeting in Cape Town
6:04 Workshops with IBIA, IMGL, IAGA and GREF
6:58 What regulators actually agree on behind closed doors
8:12 Whether any regulator still believes prohibition works
10:15 Gambling is older than currency, and the records in Malta
11:12 Fragmented and under resourced markets, and where fake games thrive
12:02 Who checks the operators nobody licensed
14:36 Channelisation falling, and illegal markets overtaking regulated ones
15:11 Whether a global standard is realistic
17:34 Harmonisation through AML and GDPR rather than gaming regulation
19:44 Why tax sits underneath the fragmentation
22:05 Regulating crypto casinos built to avoid a home jurisdiction
24:06 The one thing he would change about regulation tomorrow
SiGMA runs eight summits across five continents, and Heathcliff's team reaches out to regulators, governments and trade associations in each region to get them on stage rather than in the audience. Rome in November is the one summit where everyone comes together, with more than 60 regulators confirmed from Europe, Africa, Latin America and Asia.
The approach that worked best was partnering with GRAF, the Gaming Regulators Africa Forum, and hosting its annual meeting inside the Cape Town summit. Every regulator was already there, so the conference content became genuinely regulatory and the industry got access at the same time. The same model now runs with IBIA, IMGL, IAGA, GREF and regional bodies in Latin America.
Heathcliff cannot see how a country bans something digital by nature. Gambling has existed for hundreds of years, with records in Malta going back to the Knights betting on fights between themselves, so a ban does not stop the activity. It hides it.
He is equally clear that unregulated growth goes unchecked, and everyone knows where that leads. The vast majority of countries now accept that regulation is the way forward. The variance is in how each one goes about it.
This is the sore point. Regulators focus on their own licensees, making sure RTP and RNG are certified and player protection mechanisms are in place, and in many countries they do that job properly.
The problem is everyone else. Who checks operators without a licence, or the ones structured so they cannot easily be traced? Who confirms their games run the RNG and RTP they claim? A handful of regulators have remit over unlicensed activity. Most do not, so a player reporting an illegal site is directed to the police, who have other priorities. That void is widening. Some European countries that started with channelisation above 80 per cent now admit their illegal market is larger than their regulated one.
Heathcliff still backs harmonisation, pointing to passporting rights in financial services, while accepting there is little appetite for it and no realistic route on tax. Tax will stay on consumption, paid where the player lives, and he thinks that is fair given where the harm lands. Harmonisation is more likely to arrive sideways, through instruments like AML rules and GDPR.
On crypto, regulation is arriving bit by bit. Serious operators want to be inside the framework, and regulators are increasingly comfortable with crypto in gaming provided it is properly regulated.
Asked which regulation he would remove, he would not remove any. He would make regulation something operators want to be part of, without the burdens and the over taxation that currently make it easier not to bother. If a market is only channelling 40 per cent of its activity properly, 60 per cent is going unchecked, on sites that may be running fake games, fake RNG and fake RTP with no player protection at all.
In most countries, nobody with a clear remit. Regulators supervise their own licensees, and only a few have powers over unlicensed activity. Reports usually go to the police, who have other priorities.
Online gambling is digital and cross border, so banning it removes oversight rather than the activity. Players still find sites, and those sites sit outside any framework.
Channelisation is the share of a market's activity going through licensed operators. Where it falls to 40 per cent, 60 per cent of the money is flowing through sites that may be running fake games with no player protection in place.
Not soon. There is limited appetite, and tax will continue to be paid on consumption in the player's own country. Some harmonisation is happening indirectly through AML rules and GDPR.
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