Gambling wars ongoing
The war against illegal gambling is raging on many fronts around the world as gambling regulators try to stem the rising tide of black market casinos. This global fight mirrors the ‘war on drugs’ in the sense that regulation, or overregulation, seems to have worsened the situation.
When regulation is too heavy-handed, illegal alternatives get a chance to thrive. As well-intended as certain legislations may be, players are being pushed towards the black market.
Illicit gambling sites can ultimately have a devastating impact on players, legitimate operators, and entire economies. Finding an appropriate degree of regulation is a challenge that many regulators, governments and law enforcement agencies are facing. Their approaches may vary, but it seems that none has yet managed to walk this tightrope successfully.
In this article, we’ll explore the global situation, look at why players are turning to illegal sites, and explore potential solutions.
Overregulation driving illegal gambling
There can be little doubt about the impact of overregulation on the rise of illegal gambling. The extent of the effect seems to vary from one country to the next, and is directly related to initiatives implemented by regulators.
The UK Gambling Commission (UKGC), for instance, has introduced both affordability checks and stake limits in recent months, despite controversy, backlash and evidence from other markets that they drive players to unlicensed casinos.
In the case of affordability checks, many players strongly resent the intrusion, believing they constitute an invasion of privacy. It is highly likely that players, how many remains unknown at this point, will take to illegal sites to avoid them.
A similar situation can be seen with stake limits. Many players are used to being able to wager more per spin than the new limits (£2 for 18-24 year-olds and £5 for 25s and over) allow. The dangerous truth is that these strict limits can be easily negated by using offshore casinos.
Comparable patterns can be seen around the world.
The German experience
In Germany, the trend of players flocking to illegal sites has been especially pronounced. In 2021, things seemed bright for the German gambling industry, with online poker and casinos being newly legalised.
In 2023, tight regulations were brought in, including a €1 per-spin stake limit, a full ban on jackpot slots, and strict advertising restrictions. This approach to regulation has been blamed for the flux of players to illegal sites.
It is estimated that an alarming number, between 50% and 80%, of German gambling now takes place on illegal sites. Many are understandably pointing the finger at Germany’s regulator, the Gemeinsame Glücksspielbehörde der Länder (GGL).
Unfortunately, it appears that the GGL and the UKGC are following a similar path, albeit with the Germans currently leading the way. By examining the current situation in Europe, we can perhaps glean a bit about the UK’s future.
Most recently, Ronald Benter, Chairman of the GGL, has called for more protection against the black market, acknowledging the seriousness of the situation, but not the regulator’s culpability.
The inability of regulators to tackle illegal operators is a common theme around the world.
The Dutch experience
High levels of illegal gambling can also be seen in the Netherlands. The situation there has been worsening since the Kansspelautoriteit (KSA), the Dutch regulator, began to take an increasingly strict approach.
In October 2024, the KSA brought €700 per month deposit limits into effect. Recent research revealed that, since then, visitors to illegal sites found by searching for phrases such as “casino without limits” has increased dramatically. At the time the deposit limits were brought in, visits to these sites numbered around 170,000 per month. It now exceeds 1,000,000.
The same report suggests that around half of money lost in gambling is lost to unlicensed casinos. This is stark, but it seems that other regulators, including the Gambling Commission, have taken little notice when it comes to shaping legislation here.
A relatively low proportion of Dutch adults gamble (5%) compared to in the UK (nearly 50%), so, if a similar pattern was seen here the economic effects would be considerable.
Warning signs from Australia
In Australia, the costs of over-regulation have been so damaging that former head of the Australian Criminal Intelligence Commission Michael Phelan was compelled to speak up.
At a recent conference, Phelan stressed the importance of finding a “happy equilibrium” and cited several dangers of overregulation. He made clear that “if the market or taxation gets to a point beyond the equilibrium [...] then people will look to other markets to go to”.
“Regulators need to understand and take note of the commercial aspects of the business that we’re seeking to regulate, [...] to understand the consequences of taking certain actions and be careful of that.”
He also compared the situation to the Australian tobacco wars, which has seen criminals importing huge quantities of tobacco products to circumvent regulations.
It’s often the case that those issuing these warnings have pro-gambling affiliations, so for public officials to be voicing concerns, the situation must be serious.
Gambling is a massive industry in Australia, proportionately much bigger than in Britain. It generates huge amounts of revenue, particularly through ‘the pokies’ (physical fruit machines), but this hasn’t stopped the Australian regulator from considering an outright ban on advertising, amongst other measures.
A consistent pattern
Elsewhere around the world, similar trends can be seen.
In India, a new report has revealed that illegal sites are thriving. In just three months, four illegal platforms received 1.6 billion visits. There are estimated to be 448 million players in India, so the lost revenues are monumental. Worryingly, the study found an “exponential rise” in searches for illegal sites.
The surge in illegal gambling has been dramatic in Macau, which saw a 389% increase in illegal gambling last year. The Macau government has attempted to play down these figures, but is discussing new measures for reducing them.
It has been reported that, due to increasingly tight regulations in Portugal, 31% of gambling revenue is now picked up by illegal operators.
In Norway, 66% of all money wagered is wagered with unlicensed casinos.
Between 2008 and 2024, South Korea's illegal gambling market expanded by 91% compared to the legal market, which grew by only 46%.
All of these countries have failed to regulate in a balanced way, which raises the question of why the UKGC is continuing to regulate so strictly.
The UK experience
The good news is that, for the time being at least, illegal gambling rates are relatively low in Britain. The BGC has estimated that illegal casinos make up 2% of the market. This figure is nowhere near as high as elsewhere in Europe, but it is on the rise, and the UK is behind the curve, so we can expect to see it rise further.
New regulations have only recently come into place, so the true extent of the damage is yet to be seen. However, the UK has already seen the emergence of patterns that don’t bode well for the gambling industry. These include declining revenues because of financial background checks.
Regarding the rise in illegal gambling, Louie French MP spoke out in early 2025, saying that the “rise in black market gambling should be a concern for all. It was entirely predictable, and the government urgently needs to start listening.”
There’s no reason why we shouldn’t expect to see the same patterns in Britain that Germany and the Netherlands have seen. For this reason, it’s especially baffling that the UKGC has ignored warnings and gone ahead with introducing ever-tightening legislation.
Fighting back
On the prevalence of illegal sites, the UKGC recently said they are “aware of these websites and continue to take action to disrupt the unlicensed market, including working with online platforms and with payment providers”.
In March 2025, a Stoke-on-Trent man was arrested for providing illegal gambling services, confirming the presence of a British black market. Believing he was talking to a prospective customer, the man boasted about the busy Cheltenham Festival his illegal company had enjoyed. This points to a thriving underground betting scene, but there’s no way to know the full extent of it.
Debit cards
Meanwhile, the UKGC has been issuing warnings about the use of debit cards on illegal sites. Various illegal casinos accept Visa and Mastercard deposits, but, the UKGC stresses, this should not be taken as confirmation of their trustworthiness.
The UKGC has intensified efforts to tackle illegal gambling. In 2024, it reported more than 100,000 URLs to Google, and had 64,000 sites taken down. Despite this, between August 2021 and September 2024 traffic to 22 known illegal sites increased by 522%.
The unfortunate reality is that ‘disruption’ only goes so far. It appears easier for more of these sites to spring up than it is for the UKGC to have them taken down. Neither the UKGC nor law enforcement agencies have the power to effectively tackle existing unlicensed casinos. Illegal operators are, in many respects, out of the reach of the law.
What next?
Based on what we’ve seen in other jurisdictions where regulations are tightening, the forecast doesn’t look good. Countries like Australia are reeling, but at least discussing the importance of a “happy equilibrium” that protects players and the industry.
Illegal gambling is a very real threat to the industry and the wider economy. Gambling revenues fund many aspects of British society. The industry creates a huge number of jobs, both directly and indirectly. Affiliate industries that benefit from gambling include branches of the media, advertising, hospitality, transport and more.
It’s also a big problem for players. In the past, illegal sites have used players’ data irresponsibly, deliberately targeted problem gamblers, and refused to release players’ funds.
It’s tough to know what the answer is, but ‘disruption’ alone isn’t enough. The Commission is fighting a losing battle here, and it should play to its strengths rather than rely on disruptive methods; it should focus on keeping legal sites sustainable by avoiding overregulation.
The UKGC must begin paying attention to the global situation, learn from its mistakes, and strive for that “happy equilibrium”. These approaches should be supplemented by efforts to bring down existing sites and maintain clear communication channels between regulators and law enforcement agencies.
Research should also be made a priority. The UKGC has stressed the importance of evidence-based decision-making, but has failed to justify some of its own decisions with data. More research is needed, particularly into illegal gambling.
Conclusion
Gambling provides enjoyment and employment for many, as well as vast amounts of essential revenue in the form of taxes. It is therefore essential that the legitimate gambling industry remains viable and sustainable.
Overregulation has been shown to push players to illegal sites, and once they’re there, it’s going to be tough to win them back. For this reason, the UKGC must tread lightly, and refrain from imposing more restrictions like the new financial background checks and stake limits.
So far, the Commission has demonstrated an inability to ‘read the room’, instead blundering ahead with its policies.
Collaboration
Looking ahead, communication must be part of the solution. Bringing down illegal sites requires collaboration between regulators, law enforcers and governments, but the conversation should be opened up. The UKGC should invite legitimate operators, and players themselves, to share their thoughts and feelings, so that a suitable solution can be worked towards.
The situation is not beyond being salvageable, but the regulator must act now, and, if necessary, loosen the stranglehold that its latest policies have taken on the industry.