Illegal gambling is a global, borderless threat that risks undoing the progress made by the regulated sector, argues Paresh Rughani, Head of Compliance at Play’n GO.
While licensed operators invest heavily in player protection and compliance, illegal sites often operate unchecked and from jurisdictions beyond the legal reach of regulators.
And this shadow market poses a greater threat to the iGaming, and wider gambling, industry than many are willing to admit. But it’s also a challenge that we can confront, believes Paresh.
With experience in both the public and private sectors, including 15-years at the Channel Islands’ regulatory Alderney Gambling Control Commission, in this guest article Paresh shares his extensive insights on how we can fight back – and shows why combating illegal gambling requires industry-wide collaboration, not complacency.
Shadow Sector
It has been a remarkable decade for the online gambling industry.
Regulated markets have matured, new technologies have emerged, and responsible gambling measures have improved significantly.
But beneath this success story lies a threat that many refuse to acknowledge, one that could undermine everything we’ve worked so hard to achieve in this time.
I am talking about the persisting presence of a large, thriving and often borderless illegal gambling shadow sector.
While regulated operators are investing millions in compliance, customer protection, and tax contributions, illegal sites are getting away with offering unlicensed, unregulated gambling to consumers with little to no oversight.
They don’t provide deposit limits or cooling-off tools. They don’t follow AML protocols. They don’t pay tax. And perhaps most concerningly, they are getting better at hiding it.
Unlicensed operators exploit legal loopholes and jurisdictional blind spots, often basing themselves in territories where authorities have limited power to act.
Attempts to block these sites, whether via blacklists or ISP restrictions, are regularly outpaced by basic technological workarounds, such as VPNs. The reach of the regulator ends at the border, but the reach of these tools does not.
The damage goes far beyond lost tax revenue, although that alone is staggering. It is no exaggeration to say that governments in regulated markets worldwide are losing billions a year to the unlicensed sector.
An even greater concern is the reputational damage our entire industry suffers as a result. When a consumer has a terrible experience with an offshore site, they often fail to distinguish between regulated and unregulated sites. It is the industry as a whole that suffers.
Changing the game
Part of the issue is education. Many consumers simply don’t realise they’re using illegal sites. These platforms often mimic the appearance of regulated operators, creating a false sense of legitimacy.
There is no disclaimer warning the player that they’re outside the law. No pop-up offering responsible gaming tools. No assurance that deposits are safe or disputes will be handled fairly. Players only learn the difference when it’s already too late.
At the same time, we must be honest about how regulation itself can sometimes unintentionally push players toward these sites.
We hear of a lot of concern about so-called channelisation when new markets are regulated. I would suggest that some of the fears have been a little unfounded, but let’s not deny that some players are frustrated by ID verification, deposit limits, and withdrawal delays.
If the legal market becomes too rigid, it risks losing ground to brands that offer fewer restrictions and bigger bonuses.
To counter this, we need smarter, not just stricter, regulation.
Frameworks should be designed to make the legal market competitive, both in terms of safety and user experience.
We’re certainly not suggesting reducing player protections, but there can often be ways to deliver them in a manner that is less intrusive, meaning the player is more likely to stay rather than seek offshore alternatives.
If we want to win this fight, we must offer a superior product.
A collaborative approach
There’s no silver bullet here, but I would like to see greater jurisdictional coordination between government, regulators, operators, payment providers and even ISPs.
This is a global problem that cannot be solved individually. We need a united and international response.
I’m talking about greater cross-border cooperation, shared databases of bad actors, and stronger legal tools to pursue those who continue to undermine the regulated sector from abroad.
Technology, too, must play its part. I’d love to see regulators grant legal operators greater authority to collaborate with authorities to identify and disrupt bad actors. We all share the same goal of a cleaner, safer gambling environment, and regulated operators are often well-placed to assist with this.
Most importantly, the industry must take ownership of the problem. We cannot point fingers and wait for someone else to act. The integrity of our sector is at stake here, and it’s our collective responsibility to act.
Operators who want to be around in five or ten years can’t afford to turn a blind eye to the illegal market. If we’re not part of the solution, we’re part of the problem.
At Play’n GO, our position is clear. We support strong, fair regulation. We only supply our games to licensed operators. And we believe in long-term sustainability over short-term gain. That same mindset must now be applied to our fight against illegal gambling.
This industry has proven it can evolve, adapt and lead.
Now, it must do the same again or risk losing everything we’ve worked so hard to build.
