In April, the UK Gambling Commission (GC) released its latest report on illegal gambling trends, focusing on an emerging difficulty for regulators: the rise of virtual private networks, or VPNs. Rather than reporting an increase in black-market gambling, the Commission highlighted how VPNs complicate the measurement of such activities. As more users adopt VPNs—especially since the UK's Online Safety Act came into effect—a significant portion of online behavior may now escape regular monitoring efforts.
VPNs have become a crucial aspect of internet usage in recent years, enabling individuals to mask their locations, encrypt online traffic, and browse with enhanced privacy. However, they are also linked to activities aimed at bypassing digital restrictions, which range from streaming rights to gambling regulations. This presents a dilemma for gambling regulators: if rising VPN usage obscures online activities, how can authorities accurately quantify the black market? Additionally, should governments seek to regulate or limit VPN use, or would that infringe upon a legitimate tool for privacy?
The situation is particularly pronounced in the UK, where the Gambling Commission has recognized that increasing VPN usage has hindered tracking of illegal gambling since the Online Safety Act was enforced. The regulator previously incorporated a 30% adjustment for VPN usage in its methodology but now anticipates that, post-July 2025, a larger portion of web traffic may be obscured. This has led them to revise their assumptions based on VPN usage data from Ofcom and Similarweb, resulting in increased uncertainty about the true scale of illegal gambling.
The Commission relies on traffic estimates and trend analysis instead of precise measurements, frequently emphasizing that no single dataset can fully encapsulate black-market behaviors. The rise of VPNs complicates this situation. Melanie Ellis, a partner at Northbridge Law, remarked, "The significant use of VPNs means that web traffic data is an unreliable way to assess the scale of the black market. The Commission will need to continue to use other indicators such as consumer research and information from the licensed industry." She added that VPN usage undermines geo-blocking and poses compliance challenges even for offshore operators.
Elizabeth Cronan, vice president of government affairs at fraud-prevention technology firm GeoComply, contends that VPNs do not fundamentally disrupt regulated markets. "VPNs and other location-spoofing tools are widely available, but that does not mean they undermine regulated online gambling markets," she stated. She stressed that modern geolocation technologies are crafted to identify VPNs, proxies, and other forms of location manipulation.
Cronan explained that the core problem lies with illegal operators who often neglect deploying these controls. James Baker, programme manager at Open Rights Group, cautioned against assuming increased invisibility correlates with a rise in illegal gambling, suggesting instead that regulators should enhance measurement methodologies and use multiple sources of data.
The implications surrounding VPN use have sparked contrasting opinions. Mike Venner, director at Advanced Compliance Technology, views VPNs as a sign of real weaknesses in enforcement systems. He asserted, "The issue remains consistent: without effective enforcement technology, legislation is increasingly easy to circumvent. Basic geolocation checks are no longer sufficient in an environment where location spoofing tools are so widely accessed."
Conversely, Ismail Vali, president of Gaming Compliance International, deems the discussion around VPNs somewhat exaggerated, arguing they are not crucial for accessing unlicensed gambling services. He points out that latency can degrade the user experience and suggests that users tend to gravitate toward platforms without the need for a VPN, highlighting that unlicensed operators are accessible even without one.
The broader implications of rising VPN use extend beyond gambling into wider digital regulation. The UK’s Online Safety Act has driven an uptick in VPN adoption as users circumvent age-verification, which complicates the data analysis used by the Gambling Commission. Venner has noted that the same enforcement challenges apply to other digital regulations, warning, "Rising VPN use highlights the same challenges that have been raised with the UK government in other areas, such as adult content and the Online Safety Act."
To better manage these difficulties, he advocates for an advanced, layered compliance approach that incorporates various verification forms. He stated, "To protect bettors and uphold market integrity, regulators and operators must employ real-time, multi-layered solutions that combine location, network, device, identity, and behavioral intelligence. Without this, geo compliance challenges could become more prominent than ever."
Cronan shared a connected perspective on regulatory changes affecting behaviors, noting that the Online Safety Act sparked heightened demand for VPNs. She warns that proposed regulations requiring VPN providers to verify users' ages could push people toward unregulated options, which pose greater risks to data security and privacy.
The enforcement responsibilities between operators and regulators are complex. Lloyd argues that while geo-blocking, currency controls, and VPN detection are possible for operators, none are entirely reliable due to the rapid evolution of VPN technologies. As she stated, "Ultimately, it is not the job of licensed operators to police the black market." Cronan reiterated that strong enforcement hinges on regulatory frameworks supporting compliance.
The rise of VPNs presents a duality: they provide privacy and cybersecurity benefits while also serving as tools for circumvention. Ofcom, the UK’s communications regulator, has affirmed that VPNs are lawful services available to the public, leaving decisions on restrictions to the government. Baker emphasized the need to separate VPN usage from illegal gambling, highlighting its legitimate applications.
The Gambling Commission’s findings indicate a significant structural shift; enforcing geographic restrictions is becoming increasingly challenging in an interconnected online world. Cronan asserted that VPN usage illustrates that consumer demand persists despite access restrictions, leaving regulators grappling with ongoing uncertainty. VPNs are not merely the primary problem or irrelevant but rather complicate measurement and enforcement efforts. The Commission now faces the challenge of adjusting regulations to suit a digital landscape where visibility can no longer be guaranteed.
