A recent report commissioned by Euromat and produced by Regulus Partners along with Helios reveals that the black market in Europe has experienced an annual growth rate of 18% since 2019 and is projected to reach a value of €13 billion by the end of 2026.
The report examines black market activities across 28 jurisdictions including the UK, Netherlands, and Germany. It finds that approximately 64% of black market traffic is controlled by just 25 operators within a well-established black market ecosystem.
This group of operators has benefited from the rapid adoption of cryptocurrencies alongside aggressive marketing and sponsorship strategies, resulting in a substantial amount of illegal gambling traffic.
Some operators are specifically targeting banned products in certain jurisdictions, exacerbating black market growth. In France, for instance, iGaming remains illegal for licensed operators, which contributes to this underground economy.
According to the authors, "The largest black market operators have scaled to create recognisable brands with traffic that can compare to domestically licensed operators." The report indicates that the top group of these sites, sharing a common ownership, captures 12% of the available traffic, while the leading single brand holds 10%.
In addition to providing cryptocurrency payment options, numerous black market operators are based in "light touch" offshore jurisdictions. These locations often employ opaque structures that obscure ownership, complicating local enforcement efforts, as highlighted in the report.
Conversely, smaller black market sites predominantly rely on affiliates to drive traffic.
The report attributes much of the black market's growth to increasingly stringent regulations imposed on licensed operators, revealing that 46% of markets analyzed have implemented substantial advertising restrictions. Countries like Belgium, Bulgaria, Croatia, Cyprus, Germany, Italy, Latvia, Lithuania, Montenegro, the Netherlands, Poland, Romania, and Spain have adopted such limitations.
Other factors contributing to the illicit market include taxing consumers in 29% of these jurisdictions and banning products in 14%. Moreover, monopolistic practices in five markets have led to reduced options for players, who then seek illicit alternatives.
The report notes, "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." Restrictions on specific verticals may push engaged customers toward the black market.
In particular, if players encounter less favorable return-to-player rates or limited bonuses within licensed offerings, they may turn to illegal options that do not impose such restrictions.
Previous reports highlighted that the top 1% of active customers account for nearly half of the revenue generated in Europe’s black market. This trend mirrors the regulated market, where "online gambling is a consumer discretionary expenditure item," emphasizing that a sizable share of spending is concentrated among a small group of players.
In the UK, the black market is nearing €1 billion, partially due to a tax increase. The report documents a significant reduction in market channeling, especially following the introduction of affordability checks and a remote gaming duty hike from 21% to 40% this past April. Regulus estimates this could force the illegal market’s value to €1 billion as consumers gravitate towards unlicensed operators offering more appealing bonuses.
Further studies support these findings; a June survey by YouGov indicated that two-thirds of bettors believed the tax hike would lead them to unlicensed operators.
Historically, the UK has had a high channelization rate, attributed to its mature market with extensive competition. The report mentions that there are up to 1,491 licensed sites available, providing ample options for active players.
The methodology employed in this report involved analyzing web traffic, digital marketing, and macroeconomic data across the surveyed markets. Helios, specializing in gambling web traffic, assessed the number of actively marketed black market websites between March and May, corroborating the findings with SimilarWeb traffic analysis to gauge the extent of illegal activity. They found that many illegal sites surpassed the number of legitimately licensed operators in countries such as France, Portugal, the Netherlands, Germany, Cyprus, Belgium, and Spain.
