According to the report prepared by the European Gaming and Amusement Federation (Euromat), European illegal online gambling market has seen significant expansion in the past three years and now stands at €12 billion.
The research, done by Regulus Partners and Helios, studied 28 online gambling markets, including the UK.
Based on that, European illegal online gambling market is now taking about 25% of all online gambling activities in Europe.
Black market expands across European markets
The research also stated in the report that big companies engaged in illegal gambling have large market shares and distinct names people may know and identify.
The report raises the issue of introducing affordability checks and other ways of regulating the licensed gambling industry. While the research agrees with the importance of player safety, they warn that excessive control will make some players want to use other so-called less regulated channels.
It found that unregulated gambling now represents approximately 25% of the overall European online gambling market. The report also noted that major black-market operators have developed recognisable brands and secured significant market shares.
According to the researchers, these operators could strengthen their position as governments introduce tighter restrictions on regulated gambling.
Filip Jelavić, Project Lead at Helios, commented:
Consumer protection policies are key but become counter-productive if they succeed in driving players into the black-market. The more engaged and higher value customers who seek black markets out are often the most vulnerable to harm or exploitation.
Jason Frost, President at Euromat, commented:
The illegal black market is a major concern for everybody who recognises the importance of a progressive and fairly regulated leisure and entertainment economy. Organised Crime Groups treat illegal gambling as a ‘cash cow’ with the profits providing ready-to-use liquidity to reinvest into high-risk, high-reward criminal enterprises such as drug trafficking, human trafficking, and firearms smuggling.
The study draws attention to the balance between consumer protection and market access, arguing that regulation that creates too many barriers for customers may inadvertently contribute to the growth of the illegal online casino industry.
