The European Regulators Forum GREF launches a strategy to fight black market operators

A statement issued by GREF detailed some of the ways members would work together through cross-border cooperation that includes coordinating "joint actions" against what it sees as illegal gambling websites operating in Europe. Each country is free to use its own definition of “illegal gambling”.

Regular Meetings and Other Communications to Maintain the Cohesion of the Forum

Other items outlined include sharing experience, information and best practices, as well as setting up alerts so that all member states can be on the same page at the same time when an issue needs to be addressed. The team also stated that the various national regulatory bodies would hold regular meetings to keep themselves informed and up to date.

None of the languages we have seen address gray markets – jurisdictions where gambling operations are not allowed unless licensed locally or sometimes even from another EU member state, but players are free to choose where play. However, some of the participants are in fact from countries more widely considered to be gray markets.

With the advent of countries like Germany, Ireland, the Netherlands and the UK undertaking regulatory reform, players in the European gaming industry have brought up the issue of the black market and illegal operators in some discussions.

The GREF statement reads: “This joint action will enable us to better identify and minimize illegal gambling activities while acknowledging that each regulator remains free to define what amounts to illegal gambling and to use the enforcement tools provided by their own regulatory framework. national."

“We hope that this common action will enable a constructive dialogue with online platforms, including social media platforms. We also hope that this common action will increase consumer awareness of the risks associated with illegal gambling."

The Belgian Gaming Commission (BGC), l'Autorité Nationale des Jeux (ANJ) of France, Gemeinsame Geschäftsstelle Glücksspiel of Germany (GGL), the Hellenic Gaming Commission (HGC) of Greece, the National Lottery Regulator of Ireland and the Great Britain Gambling Commission (UKGC) are among the most prominent members of the forum.

The Irish Department of Justice has recently stated that it will include support for the Irish Gambling Regulatory Authority (GRAI) in its 2023 Justice Plan, continuing the work started in 2021 to repeal the existing gambling law in Ireland and replace it. with a modern framework that addresses betting and gambling both on land and online.

The Irish Department of Justice and Equality is a member of the forum, as is the Finnish Ministry of Social Affairs and Health. Both government agencies have been heavily involved in promoting new regulatory frameworks in their countries.

GREF: Unlicensed Operators Put Consumers at Risk

As one voice, forum members assert that “illegal gambling” (as defined by each member state) undermines the development of a fair gaming market, as well as consumer protection.

"In light of these considerations, we commit today to work together against illegal gambling, to ensure the effective implementation of our national regulations," the organization stated.

Germany's nascent regulatory authority, the GGL, said in assuming responsibilities for regional 'placeholders' that it would create and implement strict standards and aggressively go after unlicensed companies that provide gaming or sports betting opportunities in the country.

The Dutch KSA has recently intensified enforcement actions against licensed providers who break the rules, as well as foreign gambling websites that it believes are targeting unlicensed Dutch players.

However, not all regulated stakeholders unanimously agree that stricter rules and enforcement are in the best interest of players.

According to PwC research provided to the UK Gambling and Gambling Council (BGC) in early 2022, UK players using unlicensed gambling sites more than doubled in just two years. The count went from 220,000 to 460,000 in that time period. PwC estimated that the amount wagered on unauthorized online websites in the UK was in the billions of pounds a year.

The report stated: “This analysis suggests that the UK has a ‘more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks.”

“While it is not possible to isolate the impact of individual regulatory features, the above assessment suggests that jurisdictions with higher unlicensed market shares tend to exhibit one or more restrictive licensing or regulatory features.”

Referring to the much-anticipated UK Gambling Review, BGC chief executive Michael Dugher said: “We support the Gambling Review, but there is a real danger that it will lead to a smaller regulated industry and black market. illegal to grow substantially.”

“This investigation is clear about the dangers of the black market, we have to learn lessons from abroad and make the right decision at this dangerous crossroads.”

Tight Regulations Can Drive Players to Black Market Sites

However, the PwC report did not stop at the UK borders and looked at several other European countries. Found the following:

After Norway created a state monopoly and restricted all betting, implemented affordability controls and advertising restrictions, the black market grew to over 66% of all betting.

The country's plans for DNS blocking to keep Norwegian players on state-sanctioned websites took a hit recently when it was determined that landing page searchers would be redirected to the Norwegian Lottery Authority website, that it did not meet national privacy standards.

Norway currently enjoys a 100/100 rating on Freedom House with 40/40 for political rights and 60/60 for civil liberties. It's unclear if DNS blocking would affect that score.

In France, 57% of all money wagered is on unlicensed websites rather than France's state monopoly gambling portals.

Betting and gambling advertising is strictly prohibited in Italy, but the black market accounts for nearly a quarter of all money wagered online, according to the report.

The report did not indicate the percentage of unlicensed gambling that occurred before the increase in regulatory restrictions.

However, he also noted that Spain has seen 20% of all bets placed on unregulated websites since a 2020 Royal Decree in Spain severely restricted all gambling advertising. The BGC claims that those numbers are the result of players not having access to safe betting information due to the advertising ban.

In 2020 Denmark also placed restrictions on licensed traders banning deposit incentives such as match bonuses, while the Danish Tax Authority warned of the potential for a 9% increase in black market share.

In Sweden, 38% of self-excluded gamblers who chose to close their accounts in locally licensed operations were still able to gamble online with operators not licensed in Sweden.