Key Moments:
- H2 Gambling Capital estimates 27 percent of Europe’s iGaming penetration will be offshore in 2025, totaling around 18 billion euros
- Recent years have seen offshore channelization increase for the first time in over twenty years
- Panelists highlight regulatory tightening and crypto casinos as driving factors behind the growth of Europe’s illegal gambling market
Data Signals a Shift in Europe’s Gambling Landscape
During the fourth day of European Safer Gambling Week, the focus turned to Europe’s persistent black market gambling challenge. In a session called “Beyond the regulatory perimeter: tackling Europe’s black market challenge,” industry specialists analyzed data suggesting that illegal online gambling is on the rise in Europe, including markets previously thought to be under control.
Opening the discussion, Ed Birkin, Managing Director at H2 Gambling Capital, outlined estimates showing offshore iGaming penetration in Europe is projected to reach 27 percent in 2025, equaling about 18 billion euros. Birkin noted that while measuring the black market’s size is complex, H2’s model has matured over two decades and now reliably tracks evolving trends. The panel emphasized that, for the first time in over twenty years, offshore gambling’s market share is rising, reversing a long-standing trend of increased regulated, onshore gambling.
Key Drivers Sending Players Offshore
Regulatory tightening in European countries and the rapid ascent of crypto-focused casinos are fueling this shift. The panel highlighted that offshore providers attract players by offering more generous bonuses, unique products, favorable odds, and looser regulatory requirements. David Foster, Entain’s group director of international regulatory affairs, referenced “more attractive bonuses,” “better products that might not otherwise be available,” and eased requirements around deposit and spending limits, Know Your Customer (KYC), and Anti-Money Laundering (AML) as significant motivators for player migration to unregulated platforms.
The insight was also shared that casual players tend to remain with licensed operators due to perceived safety, while high-value gamblers are more inclined to transition to unlicensed sites, significantly impacting Gross Gaming Revenue (GGR).
Breakdowns in Player Protection and Enforcement
The discussion revealed substantial shortcomings in the existing player protection measures. H2’s research in Australia, referenced by Birkin, found that “almost 50 percent of players who used illegal offshore wagering sites did so while they were on BetStop.” Offshore operators sidestep self-exclusion programs and disregard other consumer safeguards, leaving vulnerable players exposed.
Market channelization data underscores the issue: H2 estimated Sweden’s online channelization at 72 percent, with substantially lower percentages for online casinos specifically. As Gustaf Hoffstedt, secretary general of BOS, summarized: “Four out of ten Swedish krona is these days played outside the licensing system.”
Panelists were unanimous that enforcement efforts are lagging. They argued that payment and DNS blocking, along with B2B licensing rules, are easily bypassed, while continued supply of games to illegal platforms sustains the attractiveness of the black market.
Fragmented Regulation and Industry Challenges
Europe’s highly fragmented regulatory landscape aggravates the problem. Inconsistent tax policies, licensing standards, and technical frameworks across countries raise compliance costs, discourage legal participation, and reduce incentives for illegal operators to seek licenses. The complexity mirrors similar barriers observed in other regional models.
The discussion called attention to the regulatory gap in cryptocurrency gambling and the emergence of new products that outpace legislative efforts. Birkin and Foster agreed that the compounded challenges created by fragmentation make legal operation more difficult and less appealing.
Actionable Solutions and Unified Perspectives
| Proposed Action | Panelist |
|---|---|
| International and domestic collaboration | David Foster |
| Meaningful consequences for offshore operations | Ed Birkin |
| Adoption of clear channelization goals | Gustaf Hoffstedt |
The group outlined three aligned priorities: ensuring regulated markets remain attractive to players, focusing enforcement on tangible consequences rather than technical barriers, and stepping up cross-border cooperation. Suggestions ranged from the creation of an international enforcement body to sharp penalties for non-compliant suppliers and operators.
As Hoffstedt remarked, “The silver bullet is a channelisation goal…Set it, measure it, and judge every regulatory proposal against it.” The consensus was clear: Europe’s black market problem is propelled less by consumer demand than by lagging regulation, enforcement, and incentives.
Conclusion
The session made it evident that effective, modern regulation and enforcement, alongside industry-wide collaboration, are vital to reversing the growth of Europe’s gambling black market. Closing the gap between industry trends and regulatory measures remains imperative for safer gambling outcomes.
- Author
Daniel Williams
