Jesper Kampmann Madsen, founder of the London-based tech company Trace2Trace, is developing technology aimed at uncovering the networks involved in illegal gambling. Born in Denmark, Madsen, 35, shares his personal story of addiction, which serves as the impetus for his mission against unlawful gambling practices.
Madsen first engaged with gambling as a teenager. Initially, it was a pastime, but this changed dramatically when, in his early twenties, he scored a significant win of approximately €22,000 on a foreign unlicensed gambling site. “I remember gambling all of it back the same day because they couldn’t pay it out in full immediately,” he says, recalling how this moment sparked his gambling addiction.
His gambling quickly spiraled out of control. He recounts, “At one point, I had only a few thousand euros left to gamble with, but then I won €180,000 in a single day. The next day I lost it all again.” This cycle of highs and lows continued, culminating in another win of €150,000—which he also lost. “I thought to myself: This has gone too far,” he reflects.
Seeking help, Madsen turned to his parents, who took charge of his finances. He describes this intervention as embarrassing but necessary. This difficult experience led him to establish Spilfri.nu, a free service aimed at helping individuals deal with gambling problems. It also assists educational institutions in preventing gambling temptations among students.
His work with Spilfri.nu exposed him to a significant issue in the gambling industry. “Our work is not driven by opposition to the gambling industry or to legal, licensed operators. Quite the contrary,” Madsen asserts. He focuses on identifying illegal gambling sites and operators that lack the necessary licenses, as well as those that misrepresent their affiliations with legitimate businesses.
Madsen observed regulators shutting down specific gambling websites, only for similar sites to quickly reemerge. This led him to realize the core issue lies not with individual websites but with the networks that support them. This realization inspired the creation of Trace2Trace.
Trace2Trace is still in its early stages but has amassed a dataset of around 620,000 records, reflecting the extensive reach of illegal gambling operations. “We receive around 7,000 domains a day on average through the lists we monitor, including new and cloned sites,” he explains.
The system works by identifying domains already flagged by authorities. Trace2Trace crawls these domains, examining technical connections and similarities, including shared hosting, DNS clusters, and source code. It can identify complex redirection paths that might not be obvious initially. “A site might redirect ten times before reaching the actual destination,” Madsen explains.
Describing Trace2Trace as “a large search engine that continuously crawls websites,” Madsen indicates that while AI plays a role in connection analysis, the initial data collection relies on objective indicators. "We only provide evidence-based findings,” he asserts, stressing the importance of accuracy in their reporting.
The illegal gambling market has increasingly drawn scrutiny from regulators, with estimates of its size varying widely. A report from Fincord Intelligence suggests that illegal online gambling may generate approximately $50 billion in global gross revenue by 2025, with around 5,000 operator structures running more than 15,000 websites and apps.
Conversely, other studies, such as one from Gaming Compliance International, speculate that unregulated gambling may amount to about $5.9 trillion in wagering value for the same year. This highlights the complexity of accurately measuring the scope of illegal gambling. Euromat’s recent report points to a substantial growth trend in Europe’s black market for gambling, anticipating a value up to €13 billion by the end of 2023.
Tracking these operations poses challenges for enforcement authorities due to the constantly changing nature of the online environment. Madsen’s investigations reveal that, regarding a prominent global brand, about 6,000 domains have been linked to its operations—even though he believes the full scope is likely larger.
Trace2Trace also assists operators and suppliers in monitoring their products. Madsen notes that understanding how sites target different jurisdictions is critical for compliance.
Importantly, Trace2Trace does not engage in shutting down websites; rather, it documents connections and changes, making the information available to regulators and enforcement agencies. Madsen believes the aim is not to eliminate illegal gambling but to complicate the operators' ability to thrive. “I know very well what gambling addiction can do to people,” he says, underscoring his personal connection to the cause.
The rise of Trace2Trace and similar ventures reflects a pressing need within the gambling industry. As illegal operations grow increasingly sophisticated in disguise and deception, effective enforcement will increasingly rely on understanding the intricate networks at play.
