Europe’s illegal online gambling market has reached an estimated €12 billion, raising concerns over player protection, regulatory effectiveness and lost tax revenue. In an interview with Yogonet, Euromat President Jason Frost warns that excessive regulation of licensed operators is pushing players toward unregulated platforms, where safeguards such as stake limits, self-exclusion and protection of player funds are often absent.
In this interview, Frost also examines the factors driving illegal gambling growth across Europe, including taxation, advertising restrictions and the increasing use of cryptocurrency. He also discusses regulatory developments in France, Germany and the Netherlands, the challenges facing enforcement agencies and the potential consequences for Europe’s licensed industry if current policies remain unchanged.
Euromat shared a study last month that puts Europe’s illegal online gambling market at €12 billion. What is the most important finding in the research that is not captured by that headline figure?
I believe the most important issue is that players do not have the same level of protection that they get from regulated sites. I’m referring to safeguards such as stake limits, the ability to self-exclude, and protection of their funds. All of this is the result of over-zealous regulation by the government.
Overly regulated jurisdictions – either through taxation of operators, advertising bans, or intrusions such as affordability checks – serve to make the regulated sector uncompetitive and add friction to the player journey. The result is a migration of players to those areas of the market where the safety rails simply don’t exist. From a fiscal perspective, it also reduces the tax yield from the regulated gambling sector.
The Euromat study demonstrates the scale of a problem which, if left unchecked, will see the unlicensed market eclipsing the licensed sector with all of the consequences that we’ve discussed.
What’s required is the creation and maintenance of a sensible regulatory system that upholds social responsibility undertakings within what is a competitive market.
What changed in the European gambling market between 2019 and 2025 that allowed the illegal sector to grow so rapidly? Can you identify a specific turning point?
It’s difficult to highlight specifics, but Covid 19 and the consequent shutdown across Europe demonstrated that players do not stop playing when their options are restricted. Instead, they look elsewhere; in this case, they found the alternative online.
Once sampled, players found that because illegal sites weren’t paying the taxes and licenses required of the legal sector, they were able to offer customers higher RTP and bigger bonuses.
By shutting down the brick-and-mortar economy as a key component of their response to Covid-19, governments throughout the world were effectively firing the starting pistol on a race to the black market – how we win them back is the big issue.
Which European markets have seen the sharpest growth in illegal gambling, and what distinguishes them from markets where the black market has remained smaller?
France has experienced the biggest growth, closely followed by Germany, where we have seen excessive regulatory control resulting in many land-based closures, which in turn served as a catalyst for players migrating to the illegal market. Similarly, in the Netherlands, excessive taxation has resulted in the closure of many socially responsible and legitimate businesses.
This hasn’t been lost on the Dutch gaming regulator. KSA Chairman Michel Groothuizen has gone on the record as saying: “Financially driven measures such as a gambling tax are contrary to the policy objective of providing players with more protection.”
Squeezing licensed operators financially makes it harder for a nation to maintain a safe, regulated legal offering.
Your research points to cryptocurrency as an important enabler. Has crypto actually changed the scale of the illegal market, or mainly made existing illegal activity easier to operate?
The rise in crypto casinos speaks for itself. Crypto provides players with total anonymity, and governments across the world have not been able or willing to address this.
What is the biggest weakness in the current European approach to blocking illegal operators: regulation, enforcement, payments, advertising, or cross-border coordination?
I’m not entirely confident that governments have the political will or are fully committed to addressing this issue – it’s much easier for them to add layers and layers of regulations and requirements on the regulated sector. As we’ve shown, the paradox of this approach is that it grows the illegal sector.
At Euromat, we meet regularly with Interpol, and we are sharing the findings of our research with governments, regulators, the European Union, and all relevant law enforcement agencies.
If current policies remain largely unchanged, what do you expect Europe’s illegal online gambling market to look like over the next three to five years?
I expect the growth to continue, and before long the biggest market will be the illegal market, with all of the consequent impact on player protection, a reduction in tax yields, and the further reduction of businesses that are rooted in their community.
We face a dystopian future unless there’s a joined-up response from all parties – in particular from the government.