Advertising publications around the world announce the participation of bookmaker 1xBet in SiGMA Europe 2024, a forum for representatives of the iGaming industry, which will be held from November 11 to 14 at the Mediterranean Maritime Hub in Malta. SiGMA Europe 2024 is one of the largest European exhibitions dedicated to the gambling industry.
Visitors to the 1xBet stand will reportedly be treated to a relaxed atmosphere, cocktails and entertainment including digital football and a reaction counter. “We look forward to meeting with partners to exchange experiences and discuss cooperation opportunities. Our team prepared a presentation of the product at the highest level”says an unknown 1xBet representative.
According to promotional materials, the 1xBet team will meet guests, share valuable information about market prospects and present the opportunities of the 1xPartners affiliate program. This program, according to publications, unites more than 100,000 partners, attracting more than 3,000,000 users to the brand’s platform.
However, a real partnership with 1xBet is not at all what company representatives can tell from the pages of advertising brochures at the exhibition stand. Partnership with a scandalous bookmaker very often involves fraud, falsification, match-fixing, non-payment of winnings to players, work without a license, circumvention or direct violation of gambling, financial, currency, tax laws, violation of court decisions, criminal prosecutions and other costs.
For example, last year the Nepalese partners of 1xBet fully felt the consequences of such cooperation firsthand. The court was filed case against 11 people, including famous actors and YouTubers, on suspicion of their involvement in organizing online gambling in Nepal through the 1XBet mobile application. The Kathmandu District Public Prosecutor’s Office has opened cases against 10 people arrested and one person at large.
The case was filed under the Advertising Act. The actors, in particular, have been accused of promoting an illegal betting platform through their television shows.
For this, it is envisaged to recover from offenders an amount of three times the amount of illegally earned money, as well as imprisonment for up to seven years.
1xBet is illegal in Nepal as betting is generally prohibited in the country. However, the platform has developed here in full force. To get around the ban, the bookmaker used its subsidiary company here with the confusingly similar name 1xBat. This same 1xBat positioned itself as a manufacturer of sportswear and sports equipment. The company’s website, however, did not present any goods ready for sale; instead, there was a message that the products were “coming soon.” The fact that the company did not produce any products and had no legal income did not prevent it from becoming the title sponsor of the Nepal T20 cricket league and conducting an aggressive advertising campaign for the bookmaker under the guise of the brand of a sports goods manufacturer.
All these tricks were discovered during the investigation of match-fixing in this very Nepal T20 league, which was organized by 1xBet or 1xBat. For partnership with the bookmaker were arrested two cricketers involved in match fixing. These players were local cricket stars – Nepal national team player Adil Ansari and former Nepali international Mehboob Alam. Eight more players and sports team managers who also were suspected in organizing the “negotiations”, managed to avoid arrest. Among them were not only Nepalese, but also citizens of other countries.
The Anti-Corruption Bureau (CIB) eventually took over the investigation and found numerous cases of fake incidents. The police linked these cases of match fixing to the activities of an online gambling platform. However, unlike its “partners”, 1xBet did not suffer any punishment, because operated in a country where gambling is prohibited, as usual, illegally, through front men. So, in addition to celebrities who advertised the platform and match-fixing participants, criminal prosecution also came under intermediary bookmakers 1xBet, which provided illegal betting in Nepal.
Interestingly, the chain of investigations into the activities of 1xBet in Nepal was triggered by a statement from a bettor who was not paid his winnings by the bookmaker. And this is another typical feature of 1xBet, which very often deceives customers. This is probably not difficult to do in Nepal, because since betting is prohibited, not every player will decide to complain to the authorities, admitting to breaking the law. However, as practice shows, 1xBet regularly scams its clients everywhere, including in those countries where there is no ban on betting and gambling.
In general, non-payment of winnings by gray and openly criminal bookmakers is a fairly common phenomenon. Bookmaker operators owe huge sums of money to players.
The international organization SBGOK (Online Game Victims Representation Fund) helps players with claims of non-payment by opaque betting operators. Representatives of the organization admit that it is very difficult to hold operators such as 1xBet accountable due to weak legislation and the opacity of corporate structures involved in this activity.
The fund currently represents 175 people with claims worth more than €12 million. So far, thanks to the organization’s efforts, 52 people have received €3.1 million in unpaid winnings. A further 80 people are involved in legal proceedings with more than €5.5 million in outstanding bets. According to SBGOK lawyers, this is only a small part of the cases of players being deceived. The fund is forced to refuse assistance to many, because… The organization does not have enough resources to provide support to all victims, and it only takes on the most promising cases from its point of view, with a higher chance of success.
One of SBGOK’s successful cases was the case against 1xBet, which they managed to bring in Curacao in a class action lawsuit on behalf of many defrauded players. The bookmaker refused to pay all these plaintiffs, resorting to standard arguments for such cases. Usually this is a lie about the identity of the people who placed the bets, whom the bookmakers accuse of registering allegedly using forged documents. This did not stop 1xBet from accepting a bet from them, but this fictitious circumstance becomes a reason for refusing to pay out the winnings.
The total amount in the court case was just under 1 million euros. For 1xBet it’s a mere trifle. It was easier to pay. However, the lawsuit resulted in local Dutch courts in Curacao declaring 1xBet bankrupt for failure to pay winnings in November 2021. (Curaçao is a state in the Caribbean that has been part of the Kingdom of the Netherlands since 2010, when the former Netherlands Antilles was reorganized).
1xBet’s initial appeal was rejected in May 2022. January 20, 2023 in The Hague, Netherlands. Supreme Court of the Netherlands approved local solution in Curacao.
This decision means that 1xBet must be officially closed due to their failure in this latest appeal (where they are declared bankrupt) and stripped of the license under which they operate). However, 1xBet continues to operate around the world, ignoring the court decision. Although, talking about ignoring it is not entirely correct. Representatives of 1xBet issued a statement in which they deny declaring themselves bankrupt and revoking their license. The bookmaker continues to work as if there was no trial.
Meanwhile, SBGOK continues to look for people to register as part of its class action lawsuit against 1xBet. Any player deceived by a bookmaker can join to the claim.
The fact that the 1xBet platform continues to operate, regardless of the court’s decision on its bankruptcy, is not at all surprising. The company has many names, brands, legal entities, and an opaque ownership structure. Instead of one bankrupt structure, the owners of this business will present a dozen new ones. In addition to this, the bookmaker operates a Curacao license, which, in theory, should be revoked after the trial. However, the gambling licensing system on this Caribbean island is designed in such a way that it is easier to obtain a license there than to lose it.
In many countries around the world, illegal bookmakers operate under licenses from other jurisdictions, for example from Malta. 1xBet chose the more convenient Curacao license. These international licenses do not require disclosure of the ultimate beneficial owner of betting companies. There are no requirements to report signs of suspicious betting that could indicate match-fixing, and punters who are not paid out by a bookmaker have little or no recourse.
Many countries, especially in Africa and Latin America, are overrun by offshore operators who insist that these “licenses” allow them to operate within the country. Legislators in these countries have generally been slow to respond, but are taking steps to create a legal framework for the betting industry that will limit its worst manifestations.
Curacao is a haven for unregulated bookmakers, allowing offshore betting operators to enter countries where betting is prohibited. We have already mentioned Nepal. Another example is Türkiye, where betting is only allowed with the state operator. But 1xBet is popular there too. We have already written about Morocco – there, aggressive advertising by 1xBet led many to believe that betting on the site was legal until the government intervened.
Most offshore operator licenses have a number of mirror licenses to which users are automatically redirected if a site operating illegally is shut down. SBGOK estimates that Curacao-licensed operators could be responsible for up to 20,000 betting sites worldwide.
The problems are further compounded by so-called sublicenses.
In Curacao today, four companies have major licenses: CEG, Antlephone, Gaming and e-Management. The holders of these master licenses then issue sublicenses to B2C (“business to customer”) operators, although there are no explicit provisions in Curacao laws or regulations allowing master license holders to use their gaming licenses in this way. However, the sublicensing system remained unchecked, and today there are hundreds of sublicenses giving a semblance of legitimacy to thousands of websites. 1xBet uses this successfully.
At one time, the founders of 1xBet from Bryansk, Roman Semiokhin, Sergey Karshkov, Dmitry Kazorin, operated in Russia without a license, which prompted the Investigative Committee of the Russian Federation to initiate a criminal case against them and put them on the wanted list. By hiding in Cyprus, they escaped punishment. Later, a smaller figure served time for them.
In 2020, a court in Bryansk sentenced a local resident to three years in prison and a fine of 800 thousand rubles in a case of illegal gambling. Olesya Mospanova managed the Bookmaker Pub network of bookmakers in Bryansk. According to investigators, Mospanova accepted cash from clients and allowed them to place bets on sports through the 1xBet website, whose activities are illegal in Russia.
In recent years, the owners, managers and lawyers of 1xBet have built a system where the founders and owners of 1xBet are not afraid of courts and prison, and small fry – “switchmen” like Mospanova or Nepalese ambassadors of 1xBet – go to jail for illegal activities of the platform. This is what the bookmaker builds its “partnership” on. But company representatives will not talk about this at the November SiGMA Europe 2024 exhibition in Malta.
