Data, Not Guesswork: Rethinking the Fight Against Illegal Gambling
Illegal and grey market gambling has become one of the industry’s most persistent challenges. Despite tighter regulation, more oversight and increasingly sophisticated compliance frameworks, offshore operators continue to compete - and in some markets, thrive.
For Jessica Maier, co-founder of EGARA (Executive Gaming and Risk Advisory), the issue isn’t a lack of intent. It’s a question of balance, execution and, increasingly, data. Ahead of her IAGA Summit panel, Jess explains why enforcement often misses the mark, how new data sources and tools are reshaping the debate, and why some regulatory approaches may be doing more harm than good.
Illegal markets continue to thrive, even in regulated jurisdictions. What’s driving that?
At a basic level, it comes down to three things: regulatory design, level of consumer friction and ineffective enforcement. If regulation limits consumer choice, for example by banning product categories which players want to play or solely relying on monopoly models, or if it introduces too much friction – whether that’s onboarding, verification, cost or restrictions on play – some players will look elsewhere. When you add advertising restrictions, high taxation and limited black market enforcement on top, it becomes harder for licensed operators to compete commercially, and what you end up with is a system where offshore operators can thrive. That being said, some regulatory frictions might be necessary and beneficial to protect players or secure broader social or political support of the gambling sector. However, it is important that restrictions placed on consumers are balanced, including by measures that also deter use of the black market, otherwise they risk having the opposite effect.
A big part of your panel focuses on data. Has the industry got better at measuring the scale of the problem?
It has improved, particularly with stronger web traffic intelligence being available and advances in AI, which allow data aggregation and analysis at a much larger scale, but better data doesn’t necessarily mean clearer answers. Different methodologies can produce completely different pictures of the same market, as we’ve seen in places like Germany where regulator-led studies and industry-backed research arrive at very different conclusions. The question isn’t just how much data we have, but how it’s collected, how wide the scope is, and how it’s interpreted.
What types of data are actually useful?
Any data that moves the debate beyond assumption and toward observable behaviour and solutions for what works and doesn’t work in regulatory design and enforcement.
One of the more interesting areas in this context, which we have been involved with lately, is tracking marketing activity, particularly across platforms like Google and Meta, which sit slightly outside direct regulatory oversight but play a critical role in the ecosystem. New tools are giving much greater visibility into how illegal operators acquire traffic and where they’re active, which starts to build a more realistic picture of market behaviour beyond what operators alone can report.
You mentioned enforcement. What role do measures like advertising restrictions and payment blocking actually play?
Advertising restrictions are a good example of where intent and outcome don’t always align. They are designed to protect consumers, particularly minors and vulnerable groups, but in practice they only are applied by licensed operators, while the black market simply ignores them. The result if enforcement against the black market is ineffective is that black market operators can gain increased visibility where licensed operators cannot and regulators may spend time enforcing compliance on the licensed side, while illegal operators remain largely untouched. This can weaken the competitive position of the regulated market. At the same time, offshore operators often will take more flexibility around bonuses, making them more attractive in certain cases.
So what pulls players toward the regulated market?
For many players, it will primarily come down to where they can best enjoy the entertainment they are seeking but also trust. They want to know their money is safe, payouts are reliable, that there is oversight, and that there is somewhere to turn if something goes wrong. Most players will also naturally lean toward wanting to play in a legal environment, but that can change when friction increases, checks are seen as disproportionate or overly intrusive, or desired products are simply not available or less attractive in the licensed market. Convenience and value can then trump the desire to play legally or brand loyalties, particularly if the black market offers easier access, fewer checks and more competitive incentives.
There’s a balance to strike. Have regulators got it right?
I don’t envy regulators as their role is not an easy one, especially where they have to work within a highly restrictive regime or are not given enough freedom to shape regulation and enforcement approaches. Striking the right balance therefore starts at legislation stage but where regulated markets are or become less competitive by design, regulators’ input and the need to balance such restrictions with corresponding enforcement against illegal operators becomes all the more important for consumers and the licensed market.
Are there any markets doing this particularly well?
Comparing channelisation rates, there are markets that have generally performed better than others, although no model is perfect and success will depend on the specific local conditions, player behaviour and how consistently rules are enforced. In broad terms, the strongest-performing markets tend to be those that combine a competitive licensed offer with proportionate regulation, sensible taxation and credible enforcement against illegal operators.
Denmark is often highlighted as a strong example in terms of channelisation, and what makes it particularly interesting now is the introduction of new advertising restrictions that can be assessed in relative isolation. That creates a rare opportunity to measure the direct impact of a specific regulatory change, which is often difficult when multiple measures are introduced at once. It is important to understand the effects of regulatory change including by examining regulations in jurisdictions where channelisation rates have declined over time. During our session, we will for example hear about the Netherlands and its experience since market opening in 2021, where channelisation was initially reported at around 80 per cent before recent regulator figures showed channelisation by GGR had fallen to 49 per cent.
In terms of successes outside Europe, several US states have shown that when legal products are attractive and accessible, players do migrate to licensed channels. However, fragmented state-by-state rules also demonstrate how inconsistent policy settings can produce very different outcomes.
Ontario is another market to watch closely as a positive example, particularly with the data emerging from its regulator who will be represented in our session and presenting its latest findings on channelisation and market performance there.
How important is collaboration in all of this?
Collaboration is essential, and developing. There is growing cooperation between regulators, operators and other stakeholders, particularly around data sharing and research to identify measures and solutions to the black market problem – be that to help shape regulation or to strengthen the effectiveness of enforcement. We will be hearing about some of this research and the new perspectives it may offer for tackling the issue on our panel as we at EGARA and other speakers in our session have been actively involved in undertaking and analysing such research.
What can operators realistically do to help?
Much of it comes down to engagement and transparency. Operators are in a strong position to identify where pressure is coming from, particularly from illegal competitors, and sharing that insight through trade associations or directly with regulators can support visibility of the problem and more effective enforcement. At the moment, too much focus often remains on ensuring compliance within the licensed market, rather than addressing the competitive threat from outside it.
Looking ahead, how does this evolve?
This is not a problem that is going away. Illegal operators are highly adaptive, and there are both legal and technical limits to how far regulators can go, but there are areas where progress is possible. Greater collaboration with platforms such as Google, Meta and payment providers could restrict visibility and access, while developments around crypto may also play a role. Ultimately, the objective should be to make the regulated market more competitive, while making it increasingly difficult for illegal operators to operate at scale.
