Article provided by IAGR partner,Greo Evidence Insights
The unregulated gambling market—also known as the black market, offshore gambling, and illegal gambling—refers to gambling operators who are unlicensed in a particular jurisdiction and who allow people to gamble outside the reach of regulatory control.
When regulated, legal online gambling markets are subject to safeguarding requirements. The lack of regulation and oversight in the unregulated market means that people who gamble may not have access to the same level of consumer protection and safer gambling measures found in regulated markets. In addition, jurisdictions are unable to collect the tax revenue generated from unregulated gambling activity.
Estimating the size of unregulated gambling markets is difficult.
A 2023 report from the American Gaming Association estimated that Americans bet an estimated USD 511 billion each year with illegal and unregulated sportsbooks, iGaming websites, and other games. Another 2023 report developed on behalf of Responsible Wagering Australia, estimated that illegal offshore gambling in Australia was worth more than AUD 1.1 billion.
Some stakeholders see gambling industry estimates of the unregulated market as an attempt to deflect scrutiny of industry activities and resist further regulatory controls. While some research suggests that increased liberalisation of regulated gambling markets may reduce the use of unregulated sites, other research has shown that liberalisation may also lead to a greater risk of harm to populations through increased advertising and exposure.
How might regulators prevent and address the harms associated with unregulated online gambling?
Recently published gambling research
Below is a selection of plain-language summaries of studies that explore unregulated gambling:
- Examining the use of offshore gambling sites by people in the United States
- A scoping review of measures used to block offshore gambling websites
- Prevalence and predictors of illegal gambling in Canada
- The extent of illegal gambling in Italian regions from 2013-2018
- The responsibilities of social media platforms in addressing illegal gambling advertising in Australia
- Promotion of offshore gambling sites by online casino reviews
Evidence-informed action
Below are examples that offer insights into strategies for mitigating gambling-related harms that stem from unregulated gambling markets. Regulators may find these examples valuable when developing strategies to combat unregulated gambling.
Illegal Gambling Working Group
The International Association of Gaming Regulators has established an Illegal Gambling Working Group (IGWG) in response to the challenges regulators face from illegal and offshore gambling activities. The IGWG will facilitate information sharing between jurisdictions, with the possibility of more formal means of collaboration and intelligence sharing.
Canada
In 2022, five Canadian provincial gaming corporations formed a coalition to tackle illegal online gambling in Canada. The coalition called on the federal government to protect people who gamble from the advertising and operation of illegal gambling websites in the country.
Sweden
Sweden’s regulator, Spelinspektionen, has been given new regulatory power related to payment providers, who will now have to inform the regulator about whether their systems are being used to process payments to and from unlicensed operators. The changes, which came into effect on July 1, 2023, aim to block payments to and from the unregulated market.
Australia
In Australia, the Australian Communications and Media Authority (ACMA) partners with internet service providers to block unregulated gambling websites, preventing them from reaching Australian residents. As of December 2023, the ACMA had blocked 893 illegal gambling websites.
