The Impact of Strict Regulation on the Growth of the Gambling Black Market in Europe: Country-by-Country Analysis
According to a report by Slotegrator, excessive regulation and high taxes in Europe lead to the growth of the black market share, which threatens not only financial stability but also player safety.
The article discusses data on gambling regulations in European countries and their impact on player behavior.
Strict Regulations Lead to the Growth of the Black Market
In European countries with strict gambling regulations, there is an increasing number of players opting for illegal or offshore sites.
This is due to high taxes, advertising restrictions, bonuses, and payment limitations, as well as a low number of licensed operators, which make legal platforms less attractive to players.
Channelization Problems in Different Countries
Belgium: The complete ban on advertising and bonuses, as well as raising the age limit to 21, has led to a significant number of young players (50% aged 18-21) starting to play on offshore sites. This shows that despite efforts to legalize gambling, players are increasingly choosing unlicensed resources.
Italy: In this country, the advertising ban since 2019 has not reduced the number of players on illegal platforms, but instead led to an estimated black market value of €18.5 billion per year. Losses to the public sector amount to about €1 billion from GGR, indicating the low effectiveness of current measures.
Sweden: In Sweden, channelization officially stands at 86%, but the real figure is likely much lower, around 78%. Additionally, restrictions on bonuses have led 32% of players to seek alternatives on unlicensed sites.
Germany: The introduction of strict betting and bonus limits, as well as deposit restrictions, has reduced channelization levels to 20-40% for slots and 60-70% for betting. At the same time, 75% of online revenue in 2024 will come from the black market.
Netherlands: Despite the official channelization estimate of 95%, research data shows that the actual figure is about 87%. Advertising restrictions after legalization have led to an increase in the share of players on offshore platforms.
Portugal: High taxes and a limited number of licensed operators have made the market less attractive to players. Among those aged 18-34, 52.1% prefer to play with offshore operators, which also indicates insufficient regulation effectiveness.
How Taxes and Restrictions Impact Player Behavior
The impact of tax rates, advertising restrictions, and bonuses on player behavior in Europe is ambiguous.
In countries with high taxes and strict restrictions, there is an increase in the black market share, as players seek more favorable conditions.
This is particularly evident among young audiences, who often feel restricted by the current measures.
The Impact of Taxes and Advertising Restrictions on the Market
- Taxes: In countries with high taxes, operators are often forced to raise rates, making them less competitive compared to offshore platforms.
- Advertising: Advertising bans, such as in Belgium and Italy, can reduce awareness of legal platforms and lead players to resort to illegal sources.
- Bonuses: In countries with strict bonus restrictions, such as Sweden and Germany, players may prefer unlicensed sites where bonuses are more attractive.
Real Data on Channelization in Europe
By studying channelization data, it is clear that successful channelization of players depends on many factors, including tax rates, bonus availability, and service quality.
The more restrictions and the higher the taxes, the more likely players will seek alternatives on offshore platforms.
Channelization Ratings by Country:
| Country | Channelization (%) | Notes |
|---|---|---|
| Belgium | 50% | Youth opts for offshore sites |
| Italy | 60-70% | Black market — €18.5 billion per year |
| Sweden | 78-86% | Bonus limits increase departures |
| Germany | 20-40% | Strict limits on betting and bonuses |
| Netherlands | 87% | Advertising restrictions influence player choice |
| Portugal | 59% | Youth prefers offshore operators |
Conclusion
The Slotegrator report shows that strict gambling regulations in Europe lead to an increase in the black market share. Players often turn to illegal platforms due to high taxes, restrictions on bonuses and advertising, and a lack of licensed operators.
To reduce the impact of the black market, more flexible and balanced regulations are needed that consider the interests of players and encourage the development of legal operators.