In July the chief executives of six major gambling brands, Bet365, Flutter, Entain, Evoke, Kindred and Betsson, published an open letter urging European policy makers and regulators to act in light of a worrying increase in black market gambling.
It is likely no coincidence that this came shortly after the appointment of a new government in the UK, which is yet to set out it’s stall in terms of gambling regulation apart from a manifesto pledge to ‘strengthen protection’ and ‘reduce gambling-related harm’.
It has various levers it can pull following publication of the country’s White Paper on gambling reform, and latterly the Gambling Commission’s new data on gambling related harm. However, as the group of six CEOs have highlighted, with the power to alter regulation comes the risk of unintended consequences.
Publishing their missive in the European Gaming and Betting Association’s (EGBA) 2024 Sustainability Report, the group referred to their collective adherence to license conditions across more than 20 European jurisdictions, and the work they had done in improving player safety.
“We employ harm prevention experts, adhere to national self-exclusion registers, and pay taxes and license fees in these countries,” they said. “…Despite this progress to ensure the safety of our players, we are facing a significant challenge. The growth of the black market for online gambling, driven by websites run from outside Europe, poses a mounting threat to the safety of European players, including our customers.”
The elusive balance between regulation and commercial viability is always a concern when policy making, but with operators set to announce a slew of bumper profits following Euro 2024 and the Olympics, profitability, it seems, is not the chief concern.
Players do appear to be being driven to unregulated markets as regulation across Europe has ramped up. In France, trade body l’Association Française des Jeux En Ligne (AFJEL) released figures last month that revealed the number of illegal players outstripped those in the legal market, totalling four million in 2023, while the regulated sector totted up 3.6 million.
Meanwhile in Germany, where channelisation has been an issue ever since the introduction of the State Treaty on Gambling in July 2021, academics at the University of Leipzig have reported legal gambling accounts for just 50.7% of gambling overall.
Similar issues have been identified in Netherlands, Sweden and other European jurisdictions. As younger generations seek out riskier games, often using volatile cryptocurrencies, it is not looking like much will change until licensed operators are allowed to compete.
“The worsening black-market situation in Europe underscores the urgent need for national policymakers to take decisive action to protect their players,” the CEOs argued. “The time to act is now. While we strongly support enforcement measures against black market websites, competitive, regulated online gambling markets are the only effective solution. We call on national policymakers to design regulatory frameworks that balance robust consumer protections with a competitive and innovative online gambling environment that is attractive to players.”
Of course, it is not just the availability of riskier games that makes the black-market an appealing attraction. Many gamblers also appreciate the anonymity it offers. The lack of KYC is the appeal. However, as the licensed industry’s key players have pointed out, all of this exposes players to precisely the risk regulation is trying to mitigate – there has to be a better balance.
“With lower operating costs, they entice players with attractive sign-up bonuses, promotions, and competitive odds, appealing particularly to vulnerable players seeking unrestricted play and a ‘no questions asked’ culture,” the group said. “Unfortunately, the way that regulatory frameworks have developed in several European countries has exacerbated the problem of the black market. Why? Because severe restrictions in these countries prevent an attractive and competitive offer to players that steers them toward safer, locally regulated websites.”
They go on to pledge to continue to invest in player safety and to use all available data to inform their efforts to build “the safest and most enjoyable experience”, for players. The problem is do today’s players equate “safe” with “enjoyable”?
