The trouble with Ostarine: Jimmy Wallhead’s
16th March 2018
There are questions over how the international basketball federation’s (FIBA) Global Betting Partner, J9.com is licensed, investigations by The Sports Integrity Initiative have revealed. On its internet site, the company claims to be licensed by the Philippine Amusement and Gaming Corporation (PAGCOR). FIBA claims that J9 works under a license issued by PAGCOR, however an audit conducted by PAGCOR claims that J9.com isn’t covered by any license it has issued.
FIBA agreed a Global Partnership with J9.com on 9 October. A statement outlines that the company was founded in The Philippines in 2013, has over 500 staff in eight countries, and ‘commits itself to responsible gaming as well as to the integrity of sports’. It claims to have over one million users and has recently signed football legend Gabriel Batistuta as a Brand Ambassador.
Gabriel Batistuta collaborate with FIFA Online on Oct, 13th. Beside, he is also J9's Ambassador. It's our honor to have Batistuta as Brand representative#J9 #J9sportnews #FIFAOnline #Batistuta #sportnews pic.twitter.com/J4Z1BKgee0
— J9 Sport & News (@J9SportNews) October 2, 2021
The Sports Integrity Initiative checked the PAGCOR licensee lists1, and found that J9 isn’t listed on any of them. J9.com doesn’t feature any information about who its owners are.
‘The Philippine Amusement & Gaming Corporation issues licenses to Approved Gaming Operators as well as respective Service Providers, which operate and manage their websites and brands like J9.com’, read an initial emailed reply from FIBA to questions from The Sports Integrity Initiative. ‘Our contractual partner has shared all necessary licenses issued by the Philippine Amusement & Gaming Corporation with FIBA and therefore proved its authorised status as approved gaming operator as well as accredited service providers’.
However, PAGCOR confirmed that J9.com isn’t covered by any licence it has issued. ‘Based on the verification made by our third-party audit platform, it was found that the subject website [J9.com] is not registered under any of our licensees’, read an email from PAGCOR’s Licensing Department.
FIBA’s 9 October statement mentions that the Global Partnership was brokered by FIBA Marketing, a partnership between FIBA and Infront Sports & Media. In addition, FIBA has a data partnership with Genius Sports to ‘prevent the collection of unofficial data from FIBA events’, and appointed renowned lawyer Richard McLaren as its Integrity Officer in 2020.
Genius Sports, McLaren, and Infront are considered experts in their fields. Would they permit a sporting federation they advise to agree a betting partnership whilst keeping details about that license secret? This is exactly what FIBA appears to have done.
‘We can confirm that J9 works under a license which is included on the PAGCOR site which you have mentioned’, read FIBA’s response to further questions sent by The Sports Integrity Initiative. ‘Based on our agreement and specifically the respective confidentiality undertakings, we are however not in a position to share further details about this license and other specifics of the contract with third parties’.
A short explanation is needed on usual practices regarding the licensing of internet gambling companies. Gambling regulators are based within specific countries or territories, and regulate gambling operators based within those countries or territories, so that they can be charged license fees and taxed effectively.
However, it was common practice for gambling regulators to license offshore operators from jurisdictions judged to have comparable regulations. In Great Britain, this took the form of a ‘white list’ of jurisdictions judged to have comparable regulations to those in place in Great Britain. Operators from those jurisdictions who were accepted before April 2009 were able to advertise their services in Great Britain.
In 2014, this system was completely abolished. The Gambling (Licensing and Advertising) Act 2014 required operators that have gambling equipment located in the UK or target the UK market to obtain a licence and pay UK gambling duty.
However, the Philippines still operates a similar ‘white list’ system. PAGCOR is a government owned company that owns several casinos, but also regulates gambling in the country. Since 2016, it has also regulated online gambling. As explained on the Regulatory section of its website, only operators who are based in The Philippines who only take bets from ‘foreigners who are based abroad’ can be regulated as ‘offshore operators’.
So to be regulated as an ‘offshore operator’, J9 needs to be based in The Philippines, but only take bets from offshore. But finding details regarding J9’s location is difficult.
J9 appears to use a British Indian Ocean domain for its ‘Global’ site, J99.io, which contains the same branding as J9.com. ‘J9 Philippines is licensed and regulated by the Philippine Gaming Control Board to provide online betting services’, reads its About Us/Contract Terms section. ‘The J9 Philippines brand is under the supervision and jurisdiction of the First Cagayan Leisure & Resort Corporation (First Cagayan)’.
The Philippine Gaming Control Board doesn’t exist. There is a Philippines Games and Amusements Board, however its role is to help combat illegal gambling in a limited range of pay to play sports and amusement games. It isn’t an online gambling regulator. However, First Cagayan Leisure and Resort Corporation does exist, and has a role as a licensing authority.
‘First Cagayan Leisure and Resort Corporation (FCLRC), a private corporation majority-owned by Leisure and Resorts World Corporation, is a duly appointed Master Licensor of the Cagayan Economic Zone Authority (CEZA) for Internet Gaming Operations in the Cagayan Special Economic Zone and Freeport (CSEZFP)’, states FCLRC’s internet site. ‘FCLRC was [sic.] also holds a Land-Based Casino License granted by CEZA’.
The Cagayan Special Economic Zone and Free Port (CSEZFP) Interactive Gaming Rules and Regulations (PDF below) mirror the PAGCOR offshore gambling regulators for gambling operators based within the Cagayan Special Economic Zone. They specify that a license will cost an operator US$100 million spread over ten years.
Significantly, the above rules are published on the FCLRC’s internet site. A company Report reveals that FCLRC’s address is a tiny resort village in the northern Philippine province of Cagayan. The Sports Integrity Initiative has asked LRWC to confirm if it owns FCLRC, and if FCLRC owns J9.com2.
As mentioned on its website, the Cagayan Economic Zone Authority (CEZA) also acts as a gaming authority that can issue interactive and land based gaming licenses without needing prior approval from PAGCOR. It mentions that its Master Licensors ‘act as the marketing and technical arms of the Regulator, and assist the Regulator in monitoring the activities of foreign online gaming companies’.
As LRWC states, FCLRC is one such Master Licensor for internet gaming. It was created by CEZA to be the Master Licensor and regulator of all gambling entitles within the Cagayan Special Economic Zone and Freeport. It is responsible for issuing licenses to gambling operators.
And J9.com claims to be ‘supervised’ by FCLRC. What that actually means is anyone’s guess.
Of course, it is entirely possibility that J9 is based in the Philippines, and is correctly regulated as an ‘offshore operator’. However if that is correct, why not be open about it? Why the secrecy?
Another possibility is that FCLRC owns J9, and granted it a licence. If this is accurate, it would appear to be a massive conflict of interest, as FCLRC is the license issuer for the Cagayan Special Economic Zone2.
Another possibility is that FCLRC doesn’t own J9 at all, but granted an operator located overseas a licence2. That would explain J9’s British Indian Ocean global domain.
But it would also appear to be illegal. Both PAGCOR and the CSEZFP Interactive Gaming Rules and Regulations require ‘offshore operators’ to be based in The Philippines.
The above scenarios are pure speculation. There may be another reasonable explanation, but both LRWC and FCLRC did not respond to emailed questions2.
It is common practice that when concluding commercial agreements, due diligence is carried out to uncover any skeletons in the closet. At the end of our investigations into J9.com, it is still unclear who licenses the website, who owns it, or where it is physically located. FIBA appears to be satisfied that the website is properly licensed and regulated, but has been unable to divulge any details.
The Sports Integrity Initiative has asked FIBA who performed due diligence on the deal, but has yet to receive a response. It seems inconceivable that an international federation would sign a Global Partnership agreement with a betting operator that contained a clause requiring it to keep that operator’s licensing arrangements confidential. Yet that is exactly what FIBA appears to have done.
2. After this article was published, on 24 October, LRWC confirmed that FCLRC ‘doesn’t own or operate any gaming website’. It also confirmed that ‘FCLRC is completely unaware of J9.com as well. Upon verifying with FCLRC, they do not have any licensee that declared J9.com as their website. J9.com also does not state FCLRC nor CEZA as the license they have, but shows PAGCOR.’ And PAGCOR has already confirmed that it doesn’t license J9.com.↩
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