Jesper Kampmann Madsen, a 35-year-old entrepreneur from Denmark, is at the forefront of a new venture aimed at tackling illegal gambling through innovative technology with his company Trace2Trace, based in London. Madsen’s motivation is deeply personal; his journey began during his teenage years with a gambling addiction that started off as harmless entertainment but escalated dramatically after a significant win on an unlicensed gambling site that netted him around €22,000.
"I remember gambling all of it back the same day because they couldn’t pay it out in full immediately," Madsen reflected on that fateful day which marked the onset of his compulsive gambling. This victory distorted his relationship with gambling, leading him down a path of addiction. "That jackpot was really the beginning of my gambling addiction," he shares, which snowballed as he was bombarded by the allure of illegal gambling sites.
The cycle of addiction culminated in a nerve-wracking experience where he won €180,000 in a single day, only to lose it all the next day. "After winning €150,000 again, and losing that too, I realized I needed to make a change. This has gone too far," he admitted. Following his struggle, Madsen sought help, with his parents stepping in to manage his finances to help him regain control.
This experience propelled him to create Spilfri.nu, a free support and blocking service aimed at aiding those with gambling issues. The platform not only assists individuals but also collaborates with educational institutions to keep students safe from gambling temptations during their studies.
Through his efforts at Spilfri.nu, he became increasingly aware of the widespread issues within the industry, noting he wasn't opposed to legal operators but rather focused on identifying illegal gambling websites and unlicensed operators. "You can try to stop gambling, but sites keep emerging," he pointed out, recognizing the complexity of the problem as regulators would shut down sites only for clones to appear immediately.
Madsen's solution was to utilize the dataset he had compiled from various gambling sites to map out the more problematic ones and their interconnections. This thinking led to the development of Trace2Trace, which is still new but has already amassed a dataset of around 620,000 domains, illustrating the scale of illegal gambling operations. On average, they monitor around 7,000 new domains each day, tracking clones and related sites.
The Trace2Trace system starts by identifying domains already flagged by authorities. It then crawls the internet for technical connections, examining shared hosting, DNS clusters, and other markers. "A website might initially appear benign, but it can lead to an actual gambling site through a series of redirects," Madsen explained, emphasizing the intricacies involved.
He characterizes Trace2Trace as a vast search engine that continuously monitors and identifies these sites. While AI plays a role, it is primarily employed in the later stages, ensuring that findings are based on solid evidence. "We only report findings with 100% confidence," he asserted.
The illegal gambling market is under increased scrutiny, with various reports estimating its size significantly, projecting it will generate around $50 billion in gross revenue globally by 2025 per a Fincord Intelligence report. Other research suggests a staggering unregulated online gambling value could reach $5.9 trillion in wagering by the same year.
For enforcement agencies, the challenge extends beyond simply assessing the size of the illegal market to tracking an ever-evolving ecosystem of domains and operators. In one of Trace2Trace's investigations linked to a well-known brand, Madsen discovered around 1,600 domains initially and later identified approximately 4,500 associated domains, hinting at a much larger network.
Trace2Trace aims to provide intelligence that can help operators and suppliers monitor where their products are visible online. The company does not take down sites but documents connections and changes, delivering these insights to regulators and enforcement bodies to empower their efforts.
Madsen's outlook on combating illegal gambling is pragmatic. He believes total eradication isn’t feasible, but making it challenging for illegal operators can discourage them. The gambling industry is shifting strategies, now focusing on payment, advertising, and cross-jurisdiction collaboration. Madsen highlights the importance of intelligence to understand the networks behind illegal gambling as they become more sophisticated.
