Overregulation is a word that fittingly carries a strong negative connotation, and while I understand why we would be tempted to discuss certain gambling markets in Europe as "overregulated," I also think there has been shortsightedness in our approach to the topic, particularly in our fundamental understanding of why grey markets continue to operate and exist in the first place despite a regulated framework that is supposed to supplant them.

We have reached a point where trade bodies would argue against "overregulation" and say that overreach is threatening jobs, and fueling the black market in the process, while regulators would respond calmly and confidently that theirs is the only right way forward. I think in all of this, we have lost sight of what matters the most – the player. Today, I would like to examine regulation in terms of how players respond to it.

I am not that na?ve as to think that players should have full autonomy or that rules should not apply across the market, but I advocate for an understanding that is derived in what we know happens when we choose to regulate our industry in one way or another, with an ample evidence base from across Europe.

Players do not understand the term overregulation, but they know if they are having fun

The first point I would like to raise is cause and effect. An average player, and perhaps the majority of players for that matter, are not really interested in the debate that surrounds regulation. People who play casino games are looking to have fun, and they have, for better or for worse, turned to online gambling.

When a regulator chooses to enact a type of regulation, whether this has to do with a universally applied deposit or loss limit across an entire market as is the case in Germany, or affordability checks, as is the case in the United Kingdom, we should not really be talking about overregulation as much we should be scrutinizing player behavior.

Are players having fun? Are they sticking around to play at regulated websites? Do they accept these new rules of engagement, or do they leave? My experience suggests that players become disillusioned with the regulated market in those instances when they are no longer having fun. There are different reasons why this may be the case.

• When game RTPs are reduced due to regulation, players often feel they’re getting less value for their money and time. Many players may feel frustrated with the lack of variety, seeking sites with better odds even if those same websites aren’t licensed at home.
• When bonuses and promotions are restricted, players perceive the experience as less rewarding, making unlicensed sites more attractive.
• When operators are unable to market their platforms effectively, players may not even know that regulated, safe options exist. Because of this, grey and black market websites have the upper hand in promoting flashier deals to potential customers.
• From a player’s perspective, a universal limit can feel both arbitrary and restrictive, unintentionally weakening the regulated market by limiting operators’ ability to showcase their full offering.
• When players are faced with affordability checks, they respond defensively, and have difficulty adjusting that they have to pass through what may feel as an intrusive process to simply play a game of slots.

All of these are valid concerns that have been raised in the debate surrounding "overregulation," but what matters to me personally is what I see as cause and effect – a regulation that is meant to protect players, ends up driving players to the grey and black market, not specifically because players understand how these alternative casinos work, but rather because these websites achieve better visibility, or offer players a larger selection of games, with often more appealing bonuses (which is not the same as worthwhile and especially safe bonuses).

Take, for example, the latest regulatory suggestion in the United Kingdom to fix the rollover requirement to a maximum of 10x. On the face of it, people who are more sensitive to the consequences that gambling could have on personal lives and wellbeing would cheer and say – "this has been long overdue." Critics, as is their wont, would lambast "overregulation" – but does anyone stop to think what this means for the player?

Yes, players might assume that a lower rollover requirement, such as introducing a 10x max wagering limit, gives them a better chance of turning a profit. But to me, this overlooks a more fundamental issue. Do players actually understand how rollover requirements work in the first place? There's another important point to consider as well that defeats the premise of reducing the wagering requirement in the first place.

A 10x limit on wagering doesn’t necessarily obligate casinos to offer the same bonus value as before. Instead, it pushes them to reduce the size of the bonus to maintain their statistical edge. For example, instead of 200 free spins, players might now receive only 10 or 20. The overall value is thus lower, and the bonus becomes less attractive to players. To ensure a 10x wagering requirement remains profitable for the casino, bonuses need to be of lower value, which in turn makes them less appealing to players.

When the fun stops, players don’t always stop

There is also the impracticality of such bonuses in the first place, with bonus abusers and multiple account registration becoming an issue for casinos, which will be forced to further reduce their odds, product variety, and bonuses, and thus land the player in an industry that is gradually losing its ability to offer anything fresh, worthwhile or exciting – anything fun, really.

In a sense, a player is joining a grey or black market casino and thinking, in broad terms, "this is fun," and many continue to feel that way right up to the point where they are faced with the unflattering reality that they are now stuck going through AML and KYC checks with an offshore operator that only initiates these checks after a withdrawal request.

What this tells us is clear: in the absence of enjoyable, frictionless, and fair experiences in the licensed market, players will drift toward what feels good in the moment, until it doesn’t.

At this point, I want to state something that might sound provocative, and I say this with full respect to the important work done by the Responsible Gambling campaign that coined the phrase: when the fun stops, players don’t always stop. Instead, they increasingly seek opportunities elsewhere, often outside the regulated market. And that, too, carries risk.

As I recently observed, the Netherlands has achieved tremendous success in the way it regulates and reports its industry, although I definitely have issues with the general direction where the market is headed, with an expected tax increase due to take place on January 1, 2026.

What provoked me was the recent Online Gambling Monitoring Report, which stated that before October 1, 2024, when new player protection measures were enacted, high-loss accounts, defined by the Netherlands Gambling Authority as accounts of players losing over €1,000, contributed 73% of the total gross gambling revenue. Following the enactment of these measures, the percentage dropped to 23%, i.e., high-loss accounts contributed only 23% of the total gross gaming revenue.

Did these players simply stop losing that much money, or have they gone looking for alternatives that are probably regulated offshore? The report supplied by the watchdog is important for another reason as it acknowledges that as much as 50% of all gambling spending by Dutch players in the country may be done with "illegal parties."

The report states that 91% of online players in the Netherlands use legal gambling providers. However, despite the relatively small proportion of players using illegal operators – 9%, it is reasonable, I believe, to infer that these players still contribute a disproportionate amount to the total gross gaming revenue generated in the unregulated market.

This indicates that the illegal market, while smaller in absolute numbers of players, captures a disproportionately large share of gambling spending, suggesting increased spending per player in the unregulated market compared to the regulated market, making the two markets appear equal in terms of gross gaming revenue, based on the available data.

The question here should be: What can bedone to make it more appealing for these players to return to the regulated market? A market that drives players offshore is a clear symptom of an industry that has failed to make gambling safer for all stakeholders.

My own opinion broadly aligns with the approach outlined by the German Sports Betting Association (DSWV), which was published as a guide to what the new German government can do to address the illegal gambling market.

Follow the money

Following the money is something that I have personally been advocating for a very long time now. There are two ways to look at this approach – one is the most practical and enforceable, perhaps, and it is executed on a legislative level.

Jurisdictions that hope to uproot illegal gambling and lessen the influence of the black market in Europe need to try to strike the right balance between under- and overregulation, but this does not mean compromise - it means get it right. In the case of criminal tax law and money laundering prevention, I think there are notable gaps.

This opinion was echoed by the Deutscher Sportwettenverband (DSWV) in a recent statement in which the trade body urged the government to step up its efforts in ensuring that financial supervisory authorities and tax authorities have the tools necessary to track money flows – including the more obscure cryptocurrency transactions – and trace them to unlicensed gambling companies.

However, I am also fairly certain that without meeting this second condition I am going to outline now, a simple toughening of financial regulation would not do much good, if any at all.

Another part of this "follow the money" approach has to do with a realization that people are not just spending elsewhere because they think it’s better – it’s because they feel like they are getting a better value.

So, it’s not just about cracking down on platforms that are targeting local citizens without a valid license. This approach also invites regulators to ask themselves and reflect – why is this happening in the first place? Why is half of the total Dutch gambling gross revenue going to websites that are not regulated in the country?

Is overregulation fueling Europe’s black market?

Today’s European iGaming markets – regulated ones – face challenges. They are doing their best to regulate an industry that is historically tied to practices that were once focused on business growth, and often at the expense of the consumers. Although these times of rapid, at-all-costs customer acquisitions are now behind us, the lingering public perception has remained.

Fear of appearing too soft on the gambling industry or paid off by lobbyists makes politicians think twice and elicits stronger reaction from regulators who are keen to rebuff such claims by issuing enforcement action. Despite these efforts, however, non-licensed gambling has continued to proliferate – in Germany, possibly in the Netherlands, and certainly in other jurisdictions.

Why? Because overregulation, in my opinion, does not work. This is not to say that regulators won’t get it right eventually. I am a firm believer that a regulated gambling market is the best option for everyone – the player, the business, and anyone with an open or vested interest. However, to get there, we need to shed the vestiges of old and ask ourselves – why are people ending up playing at and spending so much with unregulated gambling websites if we appear to be tougher on the gambling industry?

For many admitting that we may be too harsh against the gambling sector is unpalatable, and a statement that is morally contradictory. The gambling industry need not be defined in terms of "good" or "bad," either. We just need to answer the above question. Searching for the right answers continues.

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