EU Illegal Gambling Market Hits 75% Share, New Report Says

A new industry analysis has put a striking figure on Europe's channelisation problem: roughly 75% of online gambling activity across the European Union takes place with operators outside the regulated market. The finding has reignited a long-running debate over whether restrictive licensing regimes protect consumers or simply push them offshore.

Quick answer: A report from the Gambling Compliance Institute estimates that unregulated operators account for approximately 75% of the EU online gambling market. Unregulated revenue across the 27 member states is estimated to have grown from roughly €52.6 billion in 2023 to €91.6 billion in 2025 — a 74% increase in two years.

What the Report Found

The central claim is that unregulated online gambling revenue across the EU rose sharply over a two-year window, growing from an estimated €52.6 billion in 2023 to €91.6 billion in 2025. That represents a 74% increase at a time when most member states were tightening, not loosening, their regulatory frameworks.

The report frames this as a channelisation failure. Channelisation is the share of gambling activity that occurs within a country's licensed market, and it is the primary metric regulators use to judge whether a licensing regime is working. A regime that licenses operators but drives most players to offshore sites has not protected anyone — it has simply removed regulated alternatives while demand persists.

Why Channelisation Rates Vary So Widely

Channelisation across Europe is enormously inconsistent. Some markets report rates above 90%; others are estimated well below half. The variation tracks a small number of policy choices.

• Tax rates. High gross gaming revenue taxes force licensed operators to offer worse odds and smaller bonuses, making offshore alternatives more attractive on pure price.
• Product restrictions. Deposit caps, stake limits, mandatory cooling-off periods and bonus bans create friction that unregulated sites do not impose.
• Advertising bans. When licensed operators cannot advertise, players searching for gambling sites are more likely to encounter unlicensed ones.
• Enforcement capacity. Payment blocking, domain blocking and ISP-level restrictions vary dramatically in both scope and effectiveness.

The uncomfortable pattern is that the same measures intended to reduce gambling harm frequently reduce channelisation, which increases the share of play occurring entirely outside consumer protection frameworks.

The Measurement Problem

Figures on unregulated markets deserve scrutiny, and this report is no exception. Estimating revenue from operators who do not report revenue is inherently difficult, and methodologies vary considerably.

Analysts generally build these estimates from traffic data, payment processing intelligence, and survey responses, each of which carries meaningful uncertainty. Industry-funded research also has an evident interest in emphasising the scale of the unregulated market, because the policy conclusion — lower taxes and lighter product restrictions — benefits licensed operators directly.

Consumer protection advocates offer a different read. They argue that channelisation figures are frequently inflated to lobby against restrictions, and that some activity counted as "unregulated demand" would simply not occur if offshore access were properly blocked. Both positions contain defensible elements, and the honest conclusion is that the direction of travel is clearer than the magnitude.

What Regulators Are Doing

Enforcement activity across Europe has intensified noticeably. Several regulators have moved against prediction market platforms, arguing that event contracts on sports and political outcomes constitute gambling under national law regardless of how the products are characterised elsewhere.

Other visible measures include:

• Payment blocking. Requiring financial institutions to refuse transactions with listed unlicensed operators.
• Domain blocking. Compelling ISPs to restrict access to blacklisted sites, with mixed practical effectiveness given VPN availability.
• Affiliate enforcement. Targeting the marketing networks that direct traffic to unlicensed sites, which has proven more effective than pursuing operators directly.
• Licence withdrawal pressure. Several jurisdictions have tightened requirements on operators holding licences in multiple markets.

Relevance to the North American Market

The European experience is directly instructive for US and Canadian policymakers, because the same trade-offs are now surfacing in North American debates.

Several US states have adopted high tax rates on online gambling, and industry participants argue this pushes players toward offshore sportsbooks and unlicensed casino sites that have operated in the grey market for decades. The counterargument is that the US market has strong channelisation precisely because regulated products are widely available and heavily marketed — conditions that some European markets have deliberately restricted.

Canada offers a useful natural experiment. Ontario's open licensing model produced high channelisation quickly, while provinces relying on monopoly lottery corporations see substantially more offshore play. The structural lesson appears to be that availability and competitiveness of the licensed product matter more than enforcement intensity.

For readers tracking how these policy debates translate into market outcomes, our gambling guides cover regulatory developments and their practical effects across jurisdictions.

What It Means for Players

The practical takeaway for consumers is unchanged by any of this: licensed operators offer protections that unlicensed ones do not. Those include segregated player funds, independently tested game fairness, enforceable dispute resolution, mandatory responsible gambling tools, and recourse if an operator refuses to pay.

Offshore sites frequently offer better headline terms — larger bonuses, higher limits, fewer verification requirements. Those terms are possible precisely because the operator carries none of the compliance costs, and none of the obligations, that make a licensed site safe to use.

Players should verify licensing before depositing anywhere. Checking the regulator's public licensee register takes under a minute and is the single most valuable due diligence step available. Our vetted lists of best online casinos and licensed operators cover only sites holding current regulatory approval in their stated markets.

Frequently Asked Questions

What does channelisation mean in gambling regulation?

Channelisation is the percentage of total gambling activity in a jurisdiction that occurs with licensed, regulated operators rather than unlicensed ones. It is the primary measure regulators use to assess whether a licensing framework is successfully capturing demand.

Why do players use unregulated gambling sites?

Common drivers include better odds or higher return-to-player figures, larger bonuses, fewer deposit and stake restrictions, lighter identity verification, and access to products not permitted in the local licensed market. Price and convenience consistently outrank awareness of legal status.

Is the 75% figure reliable?

It is an estimate produced through indirect methodology, and it comes from research with an industry perspective. Unregulated market sizing is inherently imprecise, and figures vary substantially between studies. The broad direction — significant and growing offshore activity in restrictive markets — is more widely accepted than any specific percentage.

Does the US have the same problem?

Less severely in states with mature regulated markets, where licensed sportsbooks and casinos are widely available and heavily marketed. Offshore operators remain active, particularly in states without legal online gambling, where the unlicensed market is effectively the only option.

How can I tell if a gambling site is licensed?

Check the regulator's official licensee register directly rather than relying on badges displayed on the site itself, which are trivially faked. Every legitimate regulator publishes a searchable list of current licence holders.

Bottom Line

The report lands in the middle of Europe's central gambling policy argument: whether restriction protects players or displaces them. The evidence suggests both effects are real, and that the balance depends heavily on whether the licensed product remains competitive enough to be worth choosing. North American regulators weighing tax rates and product limits would do well to watch closely.

For ongoing coverage of gambling regulation and industry developments, follow the latest articles from DeucesCracked.