Illegal Gambling Market Threatens EU Player Protection

Industry Leaders Sound the Alarm on Black Market Dominance

The European gambling industry is grappling with a severe challenge from unlicensed operators. Jesper Eliasson, a Director at Paf, described legal markets as "quite defenceless" against the pervasive influence of the illegal gambling market. This sentiment underscores a growing concern that threatens the sustainability of licensed and regulated gaming across the continent.

The scale of the problem is staggering. According to research from YieldSec, illegal operations account for over 71% of the European Union's online gambling activity, a value estimated at €80.6 billion. Another estimate from CGI places the global black market's value at an enormous $5.9 trillion, highlighting the global nature of this issue.

Eliasson warns that these illegal operators create a completely unbalanced competitive environment. They pay no local taxes and completely bypass critical laws governing product safety, payments, marketing, anti-money laundering (AML), and responsible gambling.

"If things are not dealt with, legal markets will implode," Eliasson stated. "Which will lead to zero taxes and no player protection or transparency. The countries will lose important revenues and more people will get harmed."

Paf's Success Contrasts with Market-Wide Threats

Despite the difficult landscape, some operators are showing strong performance. Paf reported a record-breaking 2025, with revenue for the group climbing 12% to €214.5 million from €191.7 million the previous year. This growth was fueled by an expanding customer base, which rose to 765,887, and saw profits increase to €57.2 million.

The company has a significant international presence with licenses in Spain, Sweden, Estonia, and Latvia. Its strategic partnership with Grand Casino Luzern in Switzerland launched mycasino.ch, which has become a market leader with over 30% market share and annual revenue exceeding EUR 100 million.

Player Protection and Regulation Take Center Stage

In response to these challenges, the industry is doubling down on its commitment to player protection. The upcoming SBC Summit in Lisbon, scheduled from September 29 to October 1, 2026, will feature a dedicated Player Protection Symposium. The event aims to shift the industry from a compliance-focused mindset to a more preventative and player-centric approach.

The symposium will feature several key panel discussions:

• Innovation in Tech: Exploring how AI and data analytics can help operators detect risk sooner and provide more effective interventions.
• Whose Shoulders Does Responsible Gaming Fall On?: A debate on the shared responsibility between operators, regulators, and players.
• The Ethical Tension in Gaming Advertisements: Examining how to balance engagement with consumer protection in marketing.
• Regulations are getting stronger: A look at whether stricter rules strengthen the legal market or inadvertently push consumers toward the illegal gambling market.

This focus on self-improvement and collaboration is crucial. Eliasson suggests that one path forward involves greater data sharing and intelligence collaboration between licensed operators and authorities. He also expressed cautious optimism for a pan-EU gambling tax, provided it is part of a broader harmonization of regulations that makes the legal market more attractive.

New Products Complicate Gambling Harm Prevention

While the industry tackles the known threat of the illegal gambling market, new products are creating fresh challenges for gambling harm prevention. The rise of prediction markets, which blend elements of financial trading with betting, is a key example. These platforms are particularly popular with a demographic already active in financial markets.

Research from Truist Securities reveals a significant crossover between users of prediction markets and financial traders. The study found that 60% had traded stocks, 65% had bought or sold cryptocurrencies, and 43% had traded options or futures contracts. This indicates a user base that may view these activities through a lens of investment rather than gambling.

The financial services industry is already taking note. Investment firm Hargreaves Lansdown has reportedly begun asking potential investors about any history of gambling problems during its screening process. This move suggests a growing awareness of the potential for risky monetary behaviors to span both investing and gambling, further complicating the mission of player protection.

Licensed vs. Unlicensed Operations: A Stark Contrast

The fundamental differences between the regulated industry and the black market highlight the stakes for consumer safety and national economies.