The dynamics of Europe's online gambling market are increasingly influenced by activities operating outside the scope of national gambling licenses. A recent report from the Campaign for Fairer Gambling sheds light on this growing contest, estimating that by 2025, unregulated operators will generate €91.6 billion in gross gambling revenue across the 27 EU member states. In stark contrast, regulated operators are projected to yield just €36.5 billion, positioning the unregulated segment to constitute a staggering 72% of the estimated total online gambling market, valued at €128 billion.
Ismail Vali, president of Gaming Compliance International (GCI), which conducted the analysis, is welcoming of the scrutiny that such claims are likely to provoke. He emphasizes a shift in the narrative around unregulated sectors, noting, "For years, the unregulated sector has often been discussed using broad estimates… We are putting a quantified value on the total marketplace."
The report utilizes a combination of human analysis, artificial intelligence, and third-party data to underscore the enormity of the issue. Vali adds, "We deliberately publish the lower end of our modelled range… our goal is to make it clear: you are all being stolen from."
The magnitude of GCI's findings has sparked debate, as its assertion that €91.6 billion flows to unlicensed operators vastly surpasses other estimates. For instance, a recent study from Regulus Partners and Helios for Euromat estimates the illegal market in Europe at about €12 billion, or 25%, while H2 Gambling Capital cites a figure nearer to €18 billion (27%). National statistics echo these discrepancies, with PwC estimating France's illegal market at €2 billion and Germany's regulator reporting €547 million in unlicensed revenue for 2024.
In response to GCI's claims, the European Gaming and Betting Association (EGBA) points out the inherent difficulty in quantifying illegal gambling, stating, "Illegal gambling is hard to measure… there have been so many studies with widely varying results."
The variance in estimates can be attributed to differing methodologies. GCI employs a "value per visit" benchmark to convert web traffic into revenue, a method criticized by the UK Gambling Commission for its limitations, particularly in assessing usage of apps by illegal operators. While GCI predicts the total European online gambling market at €128 billion, the EGBA's study suggests that online activities represent only 39% of Europe’s broader €123.4 billion gambling market, or approximately €48 billion.
Despite disagreements on specific numbers, consensus exists regarding the sector's overall trajectory. The EGBA spokesperson notes, "Illegal activity is substantial and growing, and for us it is the biggest challenge facing the sector today."
Carl Brincat, senior director of legal and regulatory affairs at LeoVegas, echoes this sentiment, cautioning that pinpointing an accurate figure for such a clandestine sector is fraught with difficulty. Nevertheless, he contends that the trends revealed are indicative of real issues.
The report also highlights what it sees as a failure of enforcement, with Derek Webb, founder of the Campaign for Fairer Gambling, pointing out the need for coordinated action across digital platforms that facilitate illegal gambling. He argues, "Governments need to be capable of reacting to change… due to innovations in social media, AI and crypto."
GCI's report attributes the success of illegal gambling operations to a broad commercial infrastructure that includes affiliates, advertising platforms, and payment providers. Kieran O'Keefe, an advisor to the Campaign for Fairer Gambling, insists that these financial and technological entities should be held accountable for their role in perpetuating illegal operations.
In the Netherlands, gambling trade body VNLOK has initiated legal action against Meta for permitting advertisements for illegal gambling sites even after complaints. Borut Petek, chief global affairs officer at Super Technologies and a member of the EGBA board, labels the report a wake-up call, asserting that enforcement efforts must evolve to focus on the systemic infrastructure rather than merely targeting individual sites.
The debate over the future of taxation within the gambling sector is also contentious. The Campaign advocates for better enforcement as a means to allow governments to raise revenue from licensed operators. Webb posits, "If you actually tax the sector adequately, all of a sudden the affiliates might get more interested in stopping the revenue loss."
However, skepticism hangs over this argument among industry stakeholders who warn that increased taxes could drive customers to illegal alternatives. Petek warns, "Higher taxation of licensed operators will only make the problem worse."
EGBA representatives emphasize the importance of effective enforcement and the need for robust action against payment processors and technology companies that enable illegal gambling. "The goal must be stable, proportionate rules to maintain players in the regulated market," they assert.
The report raises critical questions about the extent of online gambling occurring outside of official regulatory frameworks, alongside inquiries into enforcement efficiency and potential revenue options for governments. O'Keefe argues that illegal gambling should be regarded as an internet-harms issue rather than just a gambling regulation challenge.
As the landscape continues to evolve, the report asserts that without effective enforcement and adequate consumer protections, the entire gambling sector may face increasing scrutiny and potential backlash. Petek succinctly states, "Governments should enforce the rules against those who break them with at least the same determination as they apply to those who follow them."
