A report commissioned by Euromat, prepared by Regulus Partners and Helios, indicates that Europe’s black market is projected to see a compound annual growth rate of 18% from 2019 to 2026, potentially reaching a value of up to €13 billion by the end of this year.
This analysis covers illegal gambling activities across 28 European jurisdictions, such as the UK, Netherlands, and Germany. It highlights that 25 significant operators dominate the black market, accounting for about 64% of the total illegal gambling traffic.
The growth of cryptocurrencies and effective branding through marketing strategies have allowed these operators to capture substantial market share in illegal gambling across Europe. The report suggests that firms specifically promoting banned products within certain jurisdictions are a major driving force behind black market activity, with iGaming, for example, remaining illegal for licensed operators in France.
According to the authors of the report, "The largest black market operators have scaled to create recognizable brands with traffic that can compare to domestically licensed operators," noting that the top group of sites belonging to common ownership holds a 12% share of the traffic, while the largest single brand commands a 10% share.
Many black market operators provide cryptocurrency payment options and operate from "light touch" offshore jurisdictions. These structures often obscure company ownership and complicate local enforcement actions against them. In contrast, smaller black market sites tend to rely heavily on affiliates to attract users.
The report places significant blame for the growing black market on increasingly stringent regulations governing the licensed gambling sector. It reports that 46% of the markets surveyed have "significant advertising restrictions" affecting the regulated market, targeting countries including Belgium, Bulgaria, Croatia, Cyprus, Germany, Italy, Latvia, Lithuania, Montenegro, the Netherlands, Poland, Romania, and Spain.
Additionally, the study points out that taxing consumers in 29% of these markets and prohibiting certain products in 14% also fosters illegal gambling. Monopolistic practices in five markets contribute to a lack of choice, pushing players to seek alternatives.
The report notes that as players frequently engage in various betting types, limiting their options can drive them to black market offerings that provide the full range of desired activities. It states, "If a customer finds black market sites that have all their preferred betting and gaming options, convenience dictates they will transfer a broad range of their expenditure there. Consumer recycling means that banning or restricting key products has a broader distortive impact on the entire market."
In particular, in sectors like online slots, players may move to illegal platforms if they experience lower than anticipated return to player (RTP) rates or if bonuses are not available.
Regulus further emphasizes that the top 1% of active customers accounts for nearly half of the black market revenue in Europe, mirroring trends seen in licensed markets. The report highlights the discretionary nature of online gambling expenditure, often concentrated among a small segment of users.
Specifically in the UK, the study reports an anticipated growth in the black market to nearly €1 billion, partially fueled by a recent increase in remote gaming duty from 21% to 40% which took effect in April. This tax change is expected to push consumers toward the black market as they seek unrestricted bonuses. Previous surveys indicated that two-thirds of bettors feel the tax hike will lead them to engage with unlicensed operators.
Historically, the UK has maintained a strong channelization rate due to its mature market and competitive offerings, with up to 1,491 licensed sites providing ample choice for players.
For its methodology, the report analyzed web traffic, digital marketing, and regulatory frameworks across the 28 surveyed markets. Helios studied the prevalence of actively marketed black market websites from March to May, cross-referencing this data with SimilarWeb traffic analytics to validate the scale of black market activity. The findings show that in multiple markets, including France, Portugal, the Netherlands, Germany, Cyprus, Belgium, and Spain, the number of actively marketed illegal sites exceeds those with local licenses.
