Jesper Kampmann Madsen, the 35-year-old founder of the London-based tech company Trace2Trace, is innovating in the fight against illegal gambling by mapping its associated networks. Madsen, originally from Denmark, draws upon his past experience with gambling addiction as motivation for his work, a journey he openly shares.
Madsen began gambling during his teenage years, and while it was merely a form of entertainment for a while, it escalated dramatically. In his early twenties, he scored a significant win of around €22,000 on an unlicensed gambling site, a moment that he recalls vividly. "I remember gambling all of it back the same day because they couldn’t pay it out in full immediately," he reflects.
This win marked the start of his addiction. "That jackpot was really the beginning of my gambling addiction," he explains, highlighting how exposure to illegal sites fueled his compulsive behavior. The cycle intensified as he faced staggering losses and wins, including one day where he lost €180,000 only to win €150,000 the following day—only to lose that again.
Realizing the need for change, Madsen sought help. His family stepped in, taking charge of his finances. "It was embarrassing, but it was necessary," he admits. This experience inspired him to develop Spilfri.nu, a free blocking and support service aimed at assisting individuals grappling with gambling addiction. The service not only aids users but offers an avenue for supporters to monitor progress while also promoting awareness within educational settings.
Through Spilfri.nu, Madsen encountered a broader issue within the gambling industry. He clarified that his mission isn’t about opposing legal gambling operators but rather focusing on identifying unregulated and illegal gambling sites.
Madsen explains, "You can try to stop gambling, but then you go onto foreign gambling sites and crypto casinos, and they keep appearing." He observed the inefficacy of regulators shutting down individual sites, only for clone sites to pop up. His realization was that addressing individual websites was not sufficient; it was crucial to understand the overarching networks sustaining them.
This insight sparked the creation of Trace2Trace, which leverages a massive dataset to track and analyze illegal gambling operations. Presently, the dataset encompasses around 620,000 records and grows daily, indicating the significant scope of these illicit activities. Madsen notes that they receive approximately 7,000 new domains daily, including clones and newly established sites.
The system, which he describes as a vast search engine, operates by crawling domains recognized by authorities, analyzing connections through shared hosting, DNS clusters, and tracking systems. This meticulous method allows them to uncover hidden relationships between sites, often revealing convoluted pathways that lead from seemingly legitimate platforms to illegal gambling destinations.
Madsen emphasizes the importance of objective indicators, stating that AI assists in pattern recognition only after significant data collection has occurred. "We only provide evidence-based findings," he clarifies, underscoring a commitment to accuracy in reporting connections.
The challenge posed by illegal gambling is becoming increasingly visible as regulators gain awareness. According to a report from Fincord Intelligence highlighted by the Betting and Gaming Council, illegal online gambling is projected to generate approximately $50 billion in gross revenue worldwide by 2025, with an estimated 5,000 operators managing over 15,000 websites.
More alarming estimates suggest the unregulated gambling market could be worth $5.9 trillion in wagering value by 2025, underscoring the difficulty in quantifying the issue. Studies suggest that the European black market alone may grow to €13 billion by the end of the year, reflecting an annual growth rate of 18% from 2019 to 2026.
For enforcement agencies, the challenge extends beyond understanding the market's scale; it involves tracking constantly shifting infrastructure and domains. Madsen believes Trace2Trace is well-suited for this task, with one investigation revealing around 6,000 domains associated with a single globally recognized brand.
He explains that this number is likely just a fraction of the true extent of illegal operations, estimating that the actual figure could be at least double. A recent report from Euromat indicated that approximately 25 offshore operators are contributing to 64% of the traffic to Europe's black market.
Investigators can also analyze how websites adapt to local jurisdictions, including language use, to determine market targeting. Madsen points out that this intelligence is beneficial for licensed gambling operators and suppliers monitoring the reach of their products, even noting that Trace2Trace has a client in this category, although details are confidential.
It's essential to note that Trace2Trace does not have the authority to shut down sites; it tracks domains and provides information to regulators and enforcement bodies. Madsen is candid about the broader fight against illegal gambling, stating that while complete eradication may be unrealistic, measures can be implemented to complicate operations for illegal operators.
The industry's approach is evolving, with increasing emphasis on cooperation across jurisdictions and a focus on payment methods and advertising channels. Regulators are also beginning to confront the interconnections between illegal streaming and gambling activities in areas like Turkey, where unlicensed operations are rampant.
Madsen understands from personal experience how challenging it is to escape the grip of gambling, especially when the temptation is widespread. In his view, efforts must encompass prevention, support, and action against illegal sites to combat the issue at every stage. He maintains a realistic perspective that while illegal gambling may not be entirely defeated, its operations can be significantly obstructed. For Madsen, this mission is deeply personal, fueled by a desire to protect others from the devastation he once faced, acknowledging, "I know very well what gambling addiction can do to people." The rise of companies like Trace2Trace mirrors a growing necessity in the industry: as illegal operators become more adept at concealing their presence, understanding the complex networks behind these activities will be crucial for effective enforcement.
