Illegal Gambling Websites Dominating European iGaming Market
Illegal Gambling Websites Dominating European iGaming Market
Table of Contents
- Illegal online gambling is a far richer market than the legal one in Europe
- Unregulated gambling websites generated an estimated $93.5 billion in the EU last year
Illegal gambling operators had a successful year in 2024, controlling a substantial portion of the online gaming market in Europe through their offshore casino and sports betting platforms. This surge in illegal activity has sparked significant concern among regulators and legal operators alike.
The European Casino Association (ECA), which advocates for the interests of the legal gaming sector in the EU, commissioned Yield Sec, a market research firm, to assess the extent of unlicensed operators in the online gambling landscape. Their investigation unveiled alarming findings about the scale of illegal gambling.
Yield Sec employed a combination of artificial intelligence and human analysis to track online traffic across both licenced and illegal betting websites. Their methodology encompassed meta-level monitoring of gambling behaviours, assessing user engagement such as “dwell time” and interaction with various payment platforms.
The analysis revealed that illegal gambling accounted for a staggering 71% of online gaming revenue in 2024, translating to approximately €80.65 billion ($93.5 billion). This figure marks a 53% increase since 2023, highlighting a significant trend whereby illegal operators outpace their legal counterparts.
Illegal Market Soars
Legal online gambling, including slot machines and table games, is confined to just seven states in the USA, while 34 jurisdictions regulate online sports betting. Conversely, the EU, comprising 27 nations, has embraced online gaming as part of its culture over many years.
Several factors have contributed to the growth of the illegal market; primarily, efforts to curtail gambling harm have inadvertently bolstered the black market. The COVID-19 pandemic, with its ensuing lockdowns and the closure of brick-and-mortar casinos, further propelled many individuals to explore online gambling for the first time.
Legal online gaming operators have been pressured to curtail advertising and promotional activities aimed at attracting players. Consequently, this has created a more substantial opportunity for offshore markets to thrive.
This troubling research stresses the urgent threat posed by the burgeoning, unsafe gambling black market. Illegal operators provide no consumer protections and fail to contribute any taxes back to the treasury, as noted by Grainne Hurst, CEO of the Betting and Gaming Council.
Although the UK has exited the EU, there’s a prevailing belief that illegal online gambling is flourishing within its borders as well. Hurst has advocated for the Chancellor of the Exchequer to reconsider plans to increase the tax on online gambling revenues from 15% to 21%, arguing it will only serve to drive more players into the black market.
More Unregulated Options
The Yield Sec report estimates that the legal online gambling market in the EU is valued at around $39 billion—a 30% gain from the previous year. Notably, these figures exclude online lottery revenues.
This substantial year-over-year growth in unregulated gambling options is not solely due to legal operators facing competitive disadvantage caused by regulations. The Yield Sec study highlighted the emergence of more unregulated options, including prediction markets, peer-to-peer betting exchanges, cryptocurrency-based gaming platforms, and social sweepstakes.
According to the latest estimates, over 6,200 active illegal online gaming operators are currently targeting audiences across the EU.
In summary, the rise of illegal gambling websites poses significant risks not only to the integrity of the gambling industry but also to consumer safety and local economies. In light of the increasing complexity of the online gambling landscape, both regulatory bodies and legal operators must reassess and strengthen their frameworks to counteract the fraudulent and unsafe practices present in the black market.
