In southeastern Europe, legal gambling operators are increasingly feeling the squeeze from both illegal competitors and rising operational costs. As illegal operators expand their reach and entice customers, many legal operators have come together to form a united front to combat these challenges.
In March 2023, seven countries established the Balkan Gaming Federation (BGF), uniting trade associations from across the Western Balkans, including Serbia, Bulgaria, Croatia, Romania, Montenegro, Bosnia and Herzegovina, and North Macedonia. The federation was founded with two primary objectives: to tackle the illegal gambling market and to advocate for balanced regulatory frameworks in the region. These goals are viewed as closely intertwined by its members.
The BGF aims to amplify the voices of legal operators, who feel increasingly threatened by regulatory pressures and an aggressive black market.
Initiatives are underway to advance these objectives. Following the signing of its Memorandum of Cooperation in Belgrade, the BGF has chosen to establish its headquarters in Croatia and plans to elect its first president this autumn.
A major roundtable involving Balkan regulators is also being organized, bringing together prominent companies, independent experts, and government representatives to foster an unprecedented exchange of ideas. The goal is to encourage collaboration between regulators and the industry around issues such as regulation and the black market, rather than opposition.
Miloš Lalević, vice president of GPIS Montenegro and a former deputy minister of sports and culture, stated, “Licensed operators should not be viewed as part of the problem – they should be recognized as part of the solution. They are the entities that invest in compliance, responsible gambling programs, consumer protection, technological innovation, and anti-money laundering systems. If governments want to effectively combat illegal gambling, they need strong and competitive regulated markets.”
Over the past few years, however, the gaming sector in the Balkans has faced a series of strict regulatory measures coupled with soaring costs. Lalević points out that operators have often been seen through the lens of “outdated perceptions” without adequate recognition of their economic contributions. In Romania, the land-based slots sector is experiencing a crisis due to new authorization laws that, following recent tax hikes and a ban on slots in smaller towns, leave operators reliant on local councils.
Bulgaria has also implemented stringent restrictions, including a ban on gambling in small towns, a near-total prohibition on advertising, and an extension of self-exclusion measures in the last few years. In Croatia, which hosts the federation's seat, regulators are enacting a similar overhaul, instituting strict advertising rules, player identification protocols, and self-exclusion regulations, alongside significant tax increases and license fee hikes.
Lalević expressed concern about the misunderstandings surrounding the implications of heavy-handed regulations, saying, “When regulation becomes excessively restrictive, the outcome is often the opposite of what policymakers intend. Players do not disappear from the market; they simply migrate to unlicensed operators outside the reach of national regulators and tax authorities, which is why the black market has become such a pressing issue.”
Data indicates that the black market is thriving despite the challenges faced by legal operators. According to the intelligence provider Gaming Compliance International (GCI), channelization for online gaming in the Balkans is projected at only 11% by 2025, leaving illegal gaming to claim a staggering 89% of the market across regions like Serbia, Montenegro, Croatia, Bulgaria, Romania, and Slovenia.
Filip Jelavić, secretary general of the Croatian gaming association HUPIS, has worked diligently to combat illegal gaming at both local and European levels. “The Croatian industry has been actively involved in combating illegal gambling for more than fifteen years and has invested significant effort into digital enforcement over the past seven years,” he noted. He believes that HUPIS can strengthen connections between Balkan nations and Europe while providing critical expertise in safeguarding the regulated market.
Jelavić added that the black market is becoming “increasingly sophisticated and well-organized,” utilizing influencers, affiliate networks, social media channels, and digital tools to lure players to unregulated platforms that offer scant consumer protection.
The BGF seeks to outsmart the black market through cooperation and shared resources among member countries.
Lalević emphasized the importance of creating a “genuine partnership” between the public sector and the gambling industry, stating that there exists dialogue between politicians and trade associations, but it often lacks substantive outcomes. He remarked, “While consultations are taking place, we are still not seeing enough concrete progress towards creating a sustainable balance between the legitimate interests of the state and the capability of licensed operators to provide their services in a viable and competitive environment.”
The federation hopes that a unified regional voice will drive change. Lalević advocates that licensed operators should be recognized not only as taxpayers but as strategic partners in promoting responsible gambling and consumer protection, among other regulatory priorities. “The success of public policy in this sector depends on a strong partnership between regulators and compliant operators,” he asserted.
The BGF’s inaugural year promises to be eventful, with plans for the aforementioned roundtable and closer collaboration with EUROMAT focused on illegal gambling and the protection of legal operators. In September, European and Balkan associations will convene in Bucharest to establish a shared direction for the industry. Later in November, the federation will announce its president alongside the first Balkan gaming awards, which will honor local talent and underscore the determination of the region’s gaming sector to unite and safeguard its interests.
Jelavić expressed his hope that by the end of the federation's first year, it will be recognized as a credible regional voice and a relevant stakeholder in discussions with governmental bodies, regulators, and European institutions. “If, after the first year, the federation is recognized as a serious regional partner, actively engaged in the fight against illegal gambling and capable of bringing together operators, suppliers, and industry stakeholders around common goals, that would be a very successful start,” he remarked.
As Montenegro looks toward its EU accession in 2028, Lalević noted that success for the federation hinges on its ability to foster real-world outcomes. This includes aligning regulations on anti-money laundering and data protection and recognizing emerging technologies like artificial intelligence for improving safer gambling practices.
The federation’s future success will rely on its effectiveness in demonstrating regional unity and influence over regulators. The planned roundtable and ongoing collaboration with EUROMAT will serve as essential tests in the coming year. “Stronger institutional coordination is not an end in itself,” Lalević stated. “It is a means of creating more effective regulation, enhanced consumer protection, a more successful fight against illegal gambling, and a healthier, more sustainable gaming sector across both the Balkans and Europe.”
