Ban or Regulate? Mongolia’s Sports Betting Dilemma

Mongolia's government has launched a forceful campaign against online gambling and sports betting platforms, targeting the ubiquitous 1xbet. While cracking down on illegal operations and the alleged $500 million annual outflow is understandable, the move raises a fundamental question: Is prohibition the most effective long-term strategy? Or is it a costly, and ultimately futile, game of whack-a-mole?

The immediate actions – blocking websites, pressuring Meta to remove accounts, and contemplating a total ban on betting – are presented as a response to the "epidemic" of online gambling addiction and its devastating social consequences. These are genuine concerns.

The government is right to address the financial ruin and social disruption caused by problem gambling and sports betting.

However, Cabinet Secretary Nyam-Osoryn Uchral has also highlighted a critical economic dimension: the massive outflow of funds represents significant lost tax revenue.

This dual threat – social harm and economic damage – strengthens the argument for a regulated, rather than prohibited, gambling market. Experience globally demonstrates that outright bans rarely eradicate online activity. Determined users and operators find workarounds, such as VPN usage.

The activity persists, driven underground or offshore, making it more difficult to monitor, control, and tax. 1xbet's continued presence in Mongolia, despite a previous Communications Regulatory Commission blacklist, is a stark reminder.

The core issue isn't whether gambling and sports betting pose risks. The question is how best to manage those risks and capture the potential economic benefits. Prohibition cedes control and revenue to the black market. A regulated market, while not a panacea, offers a pragmatic alternative. Jurisdictions like the UK and Australia show that licensing, taxation, and responsible gambling initiatives can mitigate harms and generate substantial government income.

A previous Mongolian proposal, though shelved, suggested a framework requiring significant capital investment and local servers – a starting point for a controlled, and taxable, environment.

The current crackdown, while addressing immediate public concerns, risks perpetuating a cycle of ineffective enforcement. The proposed legal changes, eliminating even licensed betting, suggest a continued commitment to prohibition. This may be politically expedient, but it avoids the harder, and arguably more necessary, conversation: How can Mongolia maximize revenue and minimize harm through a carefully regulated gambling sector?

Gambling, including online sports betting, has been illegal in Mongolia since a 1999 law. Facilitated by a network of "agents" often using cryptocurrencies, 1xBet and similar platforms have nonetheless flourished, evading taxes and fueling capital flight.

According to Cabinet Secretary Uchral, MNT 1 trillion (~$288 million) has left the country via 1xBet alone. Law enforcement is investigating over 100 cases of alleged fraud linked to the platform.

Mongolia's online gambling crackdown is, therefore, a short-term response to a long-term problem. While addressing the harms of illegal gambling is crucial, a purely prohibitive approach is likely ineffective and economically detrimental.

A frank discussion about the benefits, and necessary safeguards, of a regulated gambling and sports betting market – one that generates revenue and protects consumers – is urgently needed. Continuing down the path of prohibition offers only the illusion of control, while the real costs, both social and economic, continue to mount.

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1xBet, founded in 2007 and based in Cyprus, is a major online gambling player with a Curaçao license. It attracts over 3 million monthly visitors, serves 134+ countries in 70 languages, and operates 1,000+ websites targeting 200+ nations. Revenue is estimated in the billions, with $655 million from illegal activities (2014–2019) per Follow the Money. It sponsors FC Barcelona, PSG, and Serie A, and streams 1,297 daily football games (500,000 yearly), dwarfing major leagues’ 1,066 games. Its crypto network handles €4 billion, supporting a vast agent system. Its focus has shifted to Africa, South America, and India.