From Iddaa to Crypto: The Evolution of Illegal Betting in Turkey

Illegal betting is one of the most serious and persistent problems in Turkey. Despite new measures being introduced every year, no lasting blow has been dealt to the illegal betting network. So how did this network develop? How did illegal betting become one of the country’s major problems over the years? Let’s take a closer look.

For many years, Turkey has had a serious problem in the way it approaches the betting industry. This problem does not only stem from the authorities. A large part of the public has also never fully understood how the betting sector works. In such an environment, it is hardly surprising that illegal betting has turned into a major issue.

The illegal betting problem in Turkey can be divided into three broad periods: the years before Iddaa, the launch of Iddaa, and the years shaped by increasing sanctions.

The Pre-Iddaa Period

Before Iddaa, the concept of illegal betting in Turkey had not yet become clearly defined. In the 1990s and early 2000s, many sites that are now considered illegal had advertisements in newspapers such as Aksam, Hurriyet and Milliyet. At the time, when it came specifically to sports betting, Spor Toto was the only legal option in Turkey.

People were also able to use these sites without much difficulty. Still, it was becoming clear that the market needed regulation. Reports about debt and suicide had begun to appear frequently in newspapers. Eventually, the expected step came, and in 2003 the Iddaa tender marked the beginning of a new regulatory period. While the expectation was that regulation would improve everything, this period instead became the starting point of bigger problems for bettors in Turkey.

The Launch of Iddaa and Access Blocks

Iddaa emerged in April 2004 through Inteltek, the company that won the tender opened in 2003. There was now a legal market, but the taxes imposed on Iddaa made it very difficult for it to compete with foreign betting sites. While Inteltek was paying taxes, the other sites were not. At this point, access blocks would soon come into play.

In the first years, these sites remained visible. However, with the access blocks that began in 2007, major companies that did not want their names to be damaged started to leave the Turkish market. In this process, bettors were generally paid their balances and the companies exited the market. Some sites, however, chose to overcome the access blocks imposed by the Telecommunications Communication Presidency (TIB) by changing their domain names. This is how the illegal betting market became clearly visible.

TIB would block these sites with access restrictions roughly once every two weeks or once a month, and the sites would continue operating by opening new domain names.

The 2007 Enforcement Crisis Around Iddaa

While illegal betting and Iddaa continued to exist at the same time, a crisis emerged in 2007. The Council of State stated that Iddaa could not be operated through real or legal persons and that the tender was therefore contrary to the law.

Following this decision, Iddaa could not be offered for 15 days, and a legal amendment was then introduced. With Law No. 5583, it was stated that “the right and authority to organize fixed-odds and pari-mutuel betting and games of chance on football and other sports competitions belongs to the General Directorate of Youth and Sports.”

The legal amendment also targeted betting sites outside Iddaa. Article 5 of Law No. 7258 was amended. According to this change, the activities of those who organized or operated such games “through the internet, other digital platforms or by any other means” would be stopped, and prison sentences of two to five years as well as judicial fines could be imposed. In a sense, this marked the beginning of the period in which illegal betting was fought primarily through bans and sanctions.

2007-2013: A Relatively Quiet Period

Although the law had drawn a clear framework, bettors who were not satisfied with the services offered by Iddaa continued to turn to illegal betting sites. During this period, access blocks continued at the same pace.

The entry domains of illegal betting sites were blocked, but the sites opened new domains within minutes and continued on their way. During this period, news reports claiming that the illegal betting market had reached 1 billion dollars also remained on the agenda.

After 2013, Payment Methods Became the Target

It was becoming clear that access blocks were not producing the desired result, but there did not seem to be many other options available. After 2013, however, payment methods began to be targeted. During the same period, penalties were also increased.

It became law that people found to have placed bets on illegal betting sites would receive administrative fines. For a while, everything continued at the same pace, but after 2018 things began to become more difficult for bettors.

After 2018, bank transfers, which had been one of the most widely used payment methods among bettors, became much riskier. Many online wallets were also forced to withdraw from the market. People who rented out their bank accounts started to be caught, while bettors who deposited money into these accounts also received fines. The pace of access blocks also began to increase. Access restrictions imposed by the Information and Communication Technologies Authority (BTK) were now forcing sites to change their domain names almost every day.

MASAK, Turkey’s Financial Crimes Investigation Board, also became a key actor in this period, especially in monitoring suspicious money flows, freezing accounts and tracking transactions linked to illegal betting networks.

As bank transfers, online wallets, CepBank, QR codes, Ukash and many other payment methods became either unusable or very difficult to use, many expected illegal betting to suffer a serious blow. At the same time, important developments were also taking place on the Iddaa side, and it was thought that the market was about to change.

Iddaa Operating Rights Move to Demiroren

While the payment network of illegal sites was being damaged, certain developments on the Iddaa side also drew attention. In February 2019, the tender was won by the Demiroren-linked Sans Girisim joint venture, and a new era began for Iddaa. Scientific Games became the infrastructure provider.

With the new Iddaa period that began in August 2019, betting in Turkey moved somewhat closer to global standards. During the Inteltek period, the minimum number of selections required on a bet slip was three; in the new period, minimum number of selections required on a bet slip 1 became available for almost every match. Betting odds increased slightly, and live betting began to be offered.

These developments were promising for the future, but the system was still far behind global standards. With the blow dealt to the payment network of the illegal betting sector and the start of the new Iddaa period, many expected the market to shift toward the legal side. But at this point, cryptocurrencies entered the lives of bettors.

A New Illegal Betting Era with Cryptocurrencies

After 2019, a large portion of illegal betting sites in Turkey began to integrate cryptocurrencies. Since this method was seen by users as more anonymous and more secure, bettors also started to deposit money without difficulty.

Up to the present day, various restrictive measures have been introduced. In Turkish crypto exchanges, requirements such as declaring the sender during withdrawals, a 48-hour waiting period for deposits, artificial intelligence-supported detection of betting-site wallet addresses and similar measures have stood out. All these steps have created new workaround methods, and those workaround methods have brought new sanctions with them. They will probably continue to do so.

A New Step on the Agenda: Prison Sentences for Illegal Betting

After years of moving forward through a cycle of bans and workarounds, the illegal betting sector has once again come to the agenda in recent months with a new restriction. This is the prison sentence for illegal betting mentioned by Minister of Justice Akin Gurlek.

It is believed that turning an administrative fine into a prison sentence will increase deterrence and solve the problem in this way. Just like all the previous attempts.

The Only Solution: A State-Controlled Free Market

Every ban creates a partial deterrent effect, but in the end these bans are somehow bypassed. The main reason this problem has not been solved in more than 20 years is the inadequacy of the legal market.

At this point, the problem is not limited to betting odds. Illegal sites also attract users with casino games, slots, live casino products and crash games that do not have a full equivalent in the legal market. Scratch-card and slot-like games on Milli Piyango Online, as well as crash-style games such as Zeppelin on legal platforms, show that some steps have been taken in this area. However, the product variety on illegal sites remains much wider. The casino side also stands out as an area that every institution should manage much more carefully, as it carries a higher addiction risk than sports betting.

It is not realistic to expect the illegal betting market to disappear completely. But if the money flowing there is expected to remain inside the country, a new system must be built by increasing competition in the market. With more acceptable taxes, the legal market must be brought to a point where it no longer falls behind illegal markets in terms of odds, variety, bonuses and similar factors. Such a market would of course create different problems of its own, but in a regulated market, it becomes much easier to maintain control over everything.

It is not known whether a step in this direction will be taken soon. However, looking at the news coming out of Turkey, it is clear that the dominant view is still that the problem can be solved through bans.