Jesper Kampmann Madsen, the 35-year-old founder of London-based tech firm Trace2Trace, is dedicated to developing technology that maps networks involved in illegal gambling. Originally from Denmark, Madsen uses his personal experience with gambling addiction as motivation to combat these illegal operations.
His journey began in his teenage years as gambling remained a form of entertainment for him. However, everything changed when he won approximately €22,000 on a foreign unlicensed gambling site in his early twenties. "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 onset of his gambling addiction, fueled by constant exposure to unregulated sites.
The situation escalated dramatically. "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," he recounts. Madsen then won €150,000 the following day, only to lose that as well. Recognizing that his gambling habits had spiraled out of control, he decided to change his life.
With the support of his parents, Madsen sought help. They even took charge of his finances, which he describes as embarrassing yet necessary. This experience inspired him to create Spilfri.nu, a service offering support and blocking assistance for those grappling with gambling issues. The platform is free for users, while supporters can pay a fee to help monitor their progress. Spilfri.nu also caters to educational institutions that wish to protect students from gambling temptations.
Through his work with Spilfri.nu, Madsen became acutely aware of broader issues in the gambling industry. He emphasizes that his efforts are not anti-gambling but focused on combating illegal operations that lack necessary licenses and abuse legitimate operators’ licenses.
Madsen observed that while regulators dismantled specific gambling sites, mirror and cloned domains quickly resurfaced. To tackle this, he contemplated utilizing the existing dataset of gambling sites to map connections between the most problematic ones, leading to the founding of Trace2Trace.
Though Trace2Trace is relatively new, Madsen reveals its dataset has grown to around 620,000 entries and continues to expand, highlighting the extensive nature of illegal gambling activities. "We receive about 7,000 domains daily, including newly cloned sites," he notes. The approach begins with domains previously flagged by authorities, which Trace2Trace crawls to identify technical connections and similarities.
These indicators encompass shared hosting, DNS clusters, source-code strings, tracking systems, logos, and favicons. The technology can also trace redirects that may not be immediately visible. Sometimes, a website looks normal, but hidden mechanisms like JavaScript redirects lead to illicit gambling destinations. Madsen states, "You have to follow that chain," which can sometimes consist of multiple layers of redirection.
Describing Trace2Trace as "a large search engine that continuously crawls websites," Madsen explains that while AI is employed at the conclusion of the process to analyze patterns, the foundation relies on gathering objective indicators. "We only provide evidence-based findings," he asserts, ensuring that reports are only made when absolute confidence in the connections exists.
The timing of Trace2Trace’s work is critical, as the illegal gambling market is drawing increased scrutiny from regulators. Estimates of its size vary, but a report from Fincord Intelligence, featured by the Betting and Gaming Council, projects approximately $50 billion in gross revenue from illegal online gambling by 2025. Other studies, however, suggest numbers could be considerably higher, with a separate report from Gaming Compliance International estimating the unregulated online gambling market to reach $5.9 trillion in wagering value by 2025.
Moreover, a report commissioned by Euromat anticipates Europe's black market will grow at an average rate of 18% per year from 2019 to 2026, potentially reaching €13 billion this year. For enforcement agencies, the challenge lies not only in estimating market size but also in tracking an evolving ecosystem that rapidly changes domains and infrastructure.
Madsen highlighted that an investigation centered around a prominent brand initially revealed around 1,600 domains with an additional 4,500 connected to this operator, amounting to a total of roughly 6,000 identified domains. However, he suspects the real figure is likely much higher. "I think what we’ve found so far is only a small part of the overall picture," he says, estimating the actual number could be at least twice as high.
Euromat's report indicated that a small group of 25 offshore operators accounts for up to 64% of European black market traffic. This information can assist gaming companies in monitoring their products' appearances across different jurisdictions, with Madsen noting Trace2Trace currently works with an undisclosed client in this capacity.
Madsen clarifies that Trace2Trace does not have the power to shut down websites; rather, it tracks domains and identifies connections to compile data for use by regulators and enforcement agencies. He believes that while illegal gambling can’t be eradicated completely, efforts can certainly be made to complicate operations. The goal is to hinder operators' ability to swiftly replace blocked domains, creating a deterrent through effective tracking.
This approach corresponds with a broader shift among regulators, who are increasingly addressing facets of illegal gambling spanning payments, advertising, and acquisition channels. In contexts like Turkey, where regulators are facing substantial unlicensed activity, understanding the illegal market's intricate and sophisticated nature becomes ever more crucial.
Madsen acknowledges firsthand the difficulties of overcoming gambling addiction when illegal options are available. "I’m trying to address every stage: prevention, support for people who are already struggling, and then action against the illegal sites," he affirms. His continued drive for change highlights that while illegal gambling may persist, the focus is on improving the environment to deter operations. Armed with personal experience, he understands well the impact that gambling addiction has on individuals and remains committed to unraveling the complex networks that support illegal gambling.
