Europe is losing billions to illegal online casinos - What’s next?

The levels of tax taken from the gambling industry are a debated topic, with both pros and cons to any increase made. 

A new report published by Yield Sec and commissioned by the European Casino Association (ECA) reveals that €20 billion in possible tax revenue was lost to the illegal online gambling industry. 

71% of the online betting market, which amounts to over €80 billion, was taken by the illegal operators.

This has risen considerably, with the illegal gross gaming revenue being at 53% in 2023. 

What did the report find? 

Aside from revenue and tax, the report also delved into how many people are discovering these illegal sites. It found that across the EU, 92% of gambling-related content that people came across was associated with unlicensed operators. 

With this percentage, it isn’t surprising that these unregulated sites managed to gain so much income. 

Whether they were aware of the licensing situation or not, 18% of the population in Europe engaged with illegal gambling sites at some point last year. 

Which area in Europe was affected the most? 

Different parts of Europe have been affected at slightly different levels. Here’s a breakdown of all the losses that have hit each section of Europe: 

Part of Europe	The percentage of gambling revenue from illegal sources
Eastern Europe	82%
Western Europe	72%
Southern Europe	58%
Northern Europe	55%

The use of these illegal sites stems from an increase in players wanting to gamble with cryptocurrency, which is rare in regulated casinos due to KYC requirements. 

Hiding in plain sight

These unregulated casinos use a range of techniques to reach the public and encourage them to play. These can include: 

• Extreme bonuses: These are built to bring in customers and usually seem too good to be true. 

• Fake reviews: The site can post fake reviews on other websites, sometimes even including icons of banks or flags to appear legit. 

• Reaching out with social media: Social media adverts and posts can be difficult to regulate whilst simultaneously reaching millions of people who have previously expressed an interest in gambling. 

• Advanced technology: In one extreme case, a company was found using deepfake technology to mimic celebrities promoting their operation. 

These tactics are designed to fly under the radar. Using this method usually means that it falls on the public to report any unregulated activity. 

Illegal profits vs legal

The increase in players moving towards illegal sites has increased their revenue and created a gap between the profits of regulated and unregulated sites. 

The report found that for every €2.40 that these illegal operators earn, the regulated casinos are only earning €1. 

This means that the regulated casinos are struggling to keep their market share of the industry, only generating €33.6 billion last year. Whilst this may sound like a large sum, it is only 29% of the market. 

How to reduce these losses 

Yield Sec signed off on their report with some suggestions on how to prevent even further growth of these illegal operators. These include: 

• More collaboration between the Governments running the EU, the regulators and the stakeholders. 

• Continued monitoring of online casinos to ensure they have the proper licenses. 

• Enforcement measures being applied when these sites are discovered. 

If these measures can be implemented, then the regulated casinos of the EU may have a chance to recover, allowing players to enjoy gambling safely again. It would also provide these governments with billions more in tax revenue that can be used to aid the public with transport, medical issues or education.