Black-market gambling and the price of losing control

Black-market gambling is both a regulatory effectiveness and a policy challenge. The objective is not simply to block illegal operators, but to ensure the regulated market remains visible, credible and sufficiently competitive to retain consumers.

A well-designed regulatory system should keep consumers within a supervised environment where consumer protection, integrity, anti-money laundering controls and regulatory oversight apply. That requires regulatory settings that support effective channelisation, while making illegal supply harder to access, fund and promote.

Advertising has a legitimate role in that framework. Licensed operators need to be able to identify themselves to consumers, explain the protections that attach to regulated gambling and compete effectively with illegal operators that are not constrained by the same regulatory obligations. Restricting the visibility of licensed operators without addressing the accessibility and promotion of illegal alternatives can work against the objective of keeping consumers within the regulated system.

Enforcement also needs to extend beyond website blocking. Payment channels, affiliates, digital platforms, hosting providers and other intermediaries form part of the infrastructure that allows illegal operators to reach and transact with consumers. Effective disruption therefore requires coordinated measures across that wider regulatory perimeter.

Australia’s experience with illicit tobacco is relevant because it demonstrates the difficulty of recovering control once an illegal market becomes established. The lesson is not that consumer protection should be weakened. It is that regulatory settings need to be tested against how markets and consumers actually behave, including whether those settings support or undermine movement toward the regulated market.

That is the focus of The Price of Losing Control: Channelisation and Regulatory Failure in Online Gambling, prepared for Entain Australia & New Zealand. The paper examines the relationship between regulatory settings, channelisation and black-market growth, and considers how policy and enforcement can work together to preserve the effectiveness of the regulated market.