Unlicensed gambling is an issue for many emerging markets in Europe. Its large economies are losing millions in taxable revenue each year. But how different are their approaches?
Online gambling is no longer an issue that can be ignored. Countries that have done this, such as Poland, feed a black market of unregulated operators. Yet if a country goes too stringent, the same can happen. Too many rules and regulations stifle competition, also sending customers offshore. Europe is losing millions each year as it navigates this complex problem. Are stricter gambling rules what is required, or do these countries need to change their approach?
Unlicensed Online Gambling in Sweden
In Sweden, authorities have worked hard to clamp down on illegal gambling, including bookmakers and casinos. This has often meant strict laws such as bonus limits and a nationwide self‑exclusion system. However, these have had an adverse impact, unintentionally driving many players toward unlicensed gambling sites. Recent reports show that around 30% of online gambling in Sweden now happens outside the regulated market. To help players stay safe and choose only fully licensed platforms, bedrageri.info provides an up‑to‑date list of online casinos operating with a valid Swedish license.
A recent report released by the Swedish authorities on black market gambling laid the problem out on the table. It pinpointed around 1100 illegal sites operating. It placed them in three categories: Those that follow licensing from elsewhere in the EU, mainly Malta, others licensed further abroad, such as Curacao, and the third were totally unlicensed operators.
A real grey area occurs when Sweden categorises unregulated casinos. They are only deemed illegal if they are directly targeting Swedish citizens. Thus, a casino can be accessible to those in Sweden, unregulated, yet still not be designated illegal. Sweden may have to redefine this in the future should the problem increase.
Unlicensed Online Gambling in Germany
Germany's gambling market has grown rapidly over the past few years. According to an annual report, it has risen by 5% year on year to become a €14.4 billion market. All this amounts to €7 billion in annual taxes and revenue from gambling.
There have been major arguments over the figures given about unregulated gambling in Germany, with some bodies saying the stats don’t add up and the problem must be much worse than is being shown.
The report by the Gemeinsame Glücksspielbehörde der Länder, the German gambling authority, identified 858 websites in German operated by 212 companies. It is estimated that between €500 million and €600 million was the market share lost to them, an almost identical figure to the year before. They estimate this is between 3% to 4% of the legal market, rising to 25% for slot machines and sports betting.
To contradict this, a study by the University of Leipzig found that this figure may be drastically out of proportion, with less than half of all gambling taking place legally. It believes around 40% of all revenue in the sector is generated offshore, adding that only 36% of the country's revenue spent on gambling will come from legal sites.
Offshore and Black-market Casinos in the UK
A survey by the Betting and Gaming Council (BGC) found that around £2.7bn is bet using illegal sportsbooks each year in the UK. As 2.1% of a £128bn total, the UK seems to be working better than most to counter this.
The survey spoke to 6000 gamblers who used sportsbooks, casinos and bingo online. Around 5.4% of them employed a mix of regulated and unregulated platforms. The average spend on illegal sites was around 12% of their budget, equating to £2bn a year. Only 0.8% said they used offshore sites alone, and the figures amounted to around £695m per year.
Extremely tough are its laws regarding advertising and fines. There have been major global companies exiting the country over the last few years because they have not operated within the law. The country is also cracking down on offshore gambling advertising in sports, particularly football.
It is also ruthless in cracking down on these sites, closing 264 last year alone. The Gambling Commission works with search engines, so that it can get these sites removed from searches. Around 102,000 suspicious domains were reported last year, and 64,000 of these were eliminated. It also issued 770 cease and desist letters. Around 262 of these went directly to operators, with a further 205 going directly to advertisers who worked with illegal operators.
It seems that this approach, of all the countries, is working the best. Simply asking operators to shut down is not enough: Others will arrive to take their place. Yet the United Kingdom is limiting exposure and access to them. By no means will they be gone forever, and those who want them will find them easily. Yet it draws a distinction between licensed and unlicensed, allowing closer oversight and, crucially, taxable revenue.