Because their offshore casinos and sports betting platforms dominated the European online gaming market in 2024, illegal gambling operators had a successful year.
Yield Sec, a market research company that specializes in online marketplaces, was hired by the European Casino Association (ECA), a trade association that represents the interests of the legal gaming market in the European Union (EU), to determine the extent to which illegal, unlicensed operators control the online gambling industry. This week, the investigation's conclusions were made public.
In order to track the online traffic of both legal and illicit betting websites, Yield Sec researchers used AI and human teams to amass data. Meta-level anonymous surveillance of streaming, betting, and gambling activities within a jurisdiction was part of the research. Users' "dwell time, activity, and interaction" with these gaming websites, along with their corresponding payment wallets and financial processors, were analyzed.
According to Yield Sec, 71% of online gaming revenue in 2024, or €80.65 billion ($93.5 billion), came from unlawful gambling. Since 2023, illegal online gambling has increased by 53%, surpassing the growth of the legal sector.
The Illegal Market Grows
While online sports betting is regulated in 34 jurisdictions, just seven states in the US allow legal internet gambling with slot machines and table games. Online gaming has long been ingrained in the culture of the EU, which consists of 27 nations.
The illegal market is claimed to have been fueled by efforts in recent years to lessen cases of gambling harm. The COVID-19 outbreak made matters worse, and many people tried their luck online for the first time as a result of the repeated lockdowns and closures of physical casinos.
Legal online gambling companies have been mandated to cut back on discounts and advertising aimed at encouraging players to play. The offshore market has probably benefited from all of this.
"This worrying research underlines the very real threat posed by the growing, unsafe gambling black market. These illegal operators don’t have any [consumer] protections or standards … and don’t return a penny to the Treasury,” Grainne Hurst, CEO of the Betting and Gaming Council, told City AM.
Even though the UK is no longer a member of the EU, it is believed that illicit online gambling is flourishing there as well.
Hurst is pleading with Rachel Reeves, the Exchequer Chancellor, to reconsider her plan to increase the UK's online gambling revenue tax from 15% to 21%. Hurst thinks that will just encourage more people to participate in the illicit market.
Additional Unregulated Choices
According to the Yield Sec research, the EU's legal online gambling sector is predicted to be worth $39 billion. That was a 30% increase over the previous year. Online lottery revenue is not included in the number.
The more than 50% annual growth in unregulated gambling was caused by more than just authorized businesses being at a competitive disadvantage as a result of laws. With the rise of prediction markets, peer-to-peer wagering exchanges, cryptobased gaming platforms, and social sweepstakes, there are more unregulated gambling possibilities than ever before, according to the Yield Sec research.
According to Yield Sec, around 6,200 active illicit online gambling companies target players in the European Union.
