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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Anaya McDonald (00:06.313)
The European Casino Association is stepping up its own efforts to shine a light on illegal gambling in the European Union, hosting a round table and claiming that the black market is worth nearly 92 billion euros. So today on iGaming Daily we ask what is the ECA asking for? Why is Europe facing an illegal gambling crisis? And how can the block actually make a difference? So welcome back to iGaming Daily, supported by Optimove, the creator of Positionless Marketing.
and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today I'm joined by iGaming Expert Editor Joe Streter and SBC News journalist Patrick Killeen. Joe, how's things?
Joe Streeter (00:49.588)
Yeah, all good, Charlie. Thank you ever so much, you know, for to break the fourth wall a little. We are recording on Thursday and it means that yesterday was the first night for a long time that had a complete absence of any World Cup football. So it's nice to speak to people. It's nice to talk to you guys. I've been looking at the wall for the past 24 hours, completely lost, not knowing what to do with myself. So, yeah, it's good to be on the pod, even if we are talking about a pretty scary subject, to be honest with you.
Anaya McDonald (01:19.999)
Yeah, absolutely. Patrick, how are you? Have you got withdrawals as well? To be honest, it's just been a nice break not having to have a conversation with Joe about the World Cup, because I think that's been all we've been talking about for about three weeks now. but yeah, good. I it feels like every time I'm on here we're talking about the black market. But yeah, looking forward to it again. Yeah, it's an issue that is firmly in the spotlight. I think for a for a number of reasons. but we're talking today because
Joe Streeter (01:29.155)
I'm
Anaya McDonald (01:49.088)
The European Casino Association has been making its own efforts to put the illegal sector into the spotlight and and to get it into the headlines. And well, us in the media, we can't resist talking about it because it is such a big topic and it's so crucial for for our industry. Patrick, I'll I'll come to you first. why is the ECA hosting a round table? and sort of
Could you give us details on where it was, who was present? yeah. So they hosted it in the European Parliament and as you said, Charlie, it's once again to to raise awareness of the the growing illegal gambling market across the EU, which has been something we've talked about across various jurisdictions in in quite a lot of detail recently. it comes quite
You know, only a few weeks after the European Commission proposed to expand Europol's mandate to better tackle cross border crime, there was several kind of industry stakeholders there, people from the European Commission, from the from Europol's joint parliamentary scrutiny group, anti money laundering authority, Eurojust, and there was a fair few gambling regulators and EU lawmakers there. So, you know, it's quite a
A big and a you know sorry I might have to do that last bit again I'll go for it. it it's quite a substantial group of people who have have quite a lot of say within within the industry. So yeah, it's it it's big news really Yeah. I think it's really important that we get different stakeholders in a room together just to talk about these things and and highlight how big of an issue it is. And the ECA certainly has
made a lot about how big the issue is. the the the title of the the event referred to the the black market being around eighty billion euros. And they actually said, no, it's even bigger than that. It's ninety one point six billion euros. Joe, do you know where they managed to get that figure from? And I I this is a a conversation that I always like to have when we talk about the black market. Can we actually rely on those numbers? How
Anaya McDonald (04:16.895)
How do you actually know how big the the black market is?
Joe Streeter (04:20.488)
It's Charlie, it's a really good question. I'm going to follow on from what Patrick said first, if that's okay. I think he mentioned something really important. And I think the key takeaway of this for me wasn't as much as those top line numbers are very eye catching. I think the key takeaway for me was kind of the introduction of Europol, the new remit of Europol being kind of brought into this. We know it's going to be more operational. So yeah, they're trying to tap into Europol to
to get the black market, but also who was there at this summit? Are we calling it a summit? This meeting, this summit, this meeting, let's call it. Who wasn't there as well? Let's talk about who wasn't there, because there were a few people that weren't there that I think were quite notable. We know that the ECA explicitly called for obligations on payment service providers and crypto asset service providers.
Anaya McDonald (05:00.671)
Round table.
Joe Streeter (05:18.038)
There weren't any there though, and I think if you can bring those to the table, that's massive. They need to be brought to the table. They need to be brought into this discussion. And the other one is when we talk about channelization, the study from the ECA highlighted that 92 % of gambling-related content viewed by EU consumers came from unlicensed operators, and they exploited the likes of TikTok, Twitch, and Instagram.
but there weren't any social media platforms there as part of the discussion. I think you need to get them involved in the discussion for this to happen. Now, Charlie, your question around the figure, I think you raise a really pertinent point around just how you can measure this. If you don't mind a little anecdote, Charlie, when I had one of my first jobs, I worked in a car garage.
My mom and dad both, they own a car garage. It was very much expected that I would go into that industry as hard as that is to believe now. And I started like making tea and just mopping things up and stuff like that. Eventually that developed and this next evolution of me becoming a mechanic was one of the mechanics showed me under the bonnet. He showed me how a car works or he attempted to anyway, where the clutch is, where the brake pads are, these types of intricacies.
Charlie, let me tell you, I looked at the car and I did not have a clue. The whole thing was alien to me. He spent about an hour trying to explain it to me. I didn't have a clue. And I still don't to this day, I don't even drive anymore. So put off was I by the experience. That's how I feel when I try to pin down how people measure the black market because it's just so perplexing. We know it's done through yield sec. know, or in this case, it was done through yield sec.
We know they look at search engines, look at social media, streaming platforms and apps. But how you can actually measure the size of this market and put a number on that, it takes me back to the confusion I felt back then. I just don't know how you do it.
Anaya McDonald (07:34.421)
Joe, I've got to say that's a fantastic anecdote and I'm surprised that you didn't carry on your career as a as a mechanic after that. you s you surprised me. But no, it's is it is it does go to show that it's you know, it is very complicated because by definition, a lot of this stuff isn't recorded because it is it isn't regulated. so it is difficult to to rely on. Patrick,
Joe Streeter (07:37.942)
You
Yeah.
Anaya McDonald (07:59.839)
There's a lot of stark figures in here like the ninety one point six billion and I think Joe said that ninety two percent of of of social media exposure is is around black market brands, which is which is shocking t to be honest. But another figure that was in the the information pack that the ECA put out was a around how many illegal operators the body identified across the European Union. how many was that and what do you think that tells us about the demand?
Across the EU for sites like this? Yeah, so there was over six thousand two hundred that they identified. And I completely agree with what Joe's just said, just going back a second. but it it's kind of in the interest of a trade body like the ECA to to raise this issue and make the industry aware. And that has been done in the past or has claimed to have been done in the past by overinflating figures a little bit. So
But as Joe says, it it's it's so hard to measure the actual s definite size of the black market. But with what you're saying about the exposure on social media platforms, that's there for everyone to see. You know, this is a massive issue. you can use some of the the social media sites that Joe used, for example, and just have a scroll through some of them. I've I've mentioned it before. You know, you're coming across so many advertisements,
kind of shady advertising schemes, people plugging these these illegal operators, maybe some influences without even knowing. So it's a it's a massive kind of issue and it's there for everyone to see. It's not, you know, even if these figures are overinflated, it's not a case of now this being an excuse for the industry to use against higher regulation, tricter regulation or higher taxation. It's
It's a genuine problem and you know, the ECA have said that the majority of online gambling revenue in the EU is generated by illegal sites, which may be hard to believe, but if you look on social media and you know, you you look at these figures where six thousand two hundred illegal operators are targeting EU consumers, it's not it becomes a bit less hard to believe.
Anaya McDonald (10:27.524)
That makes sense. Yeah, no, no, a hundred percent. And we'll we'll we'll go into some of the reasons for that after the break, because I think it the you know, there there's several factors at play here, but it it yeah, it's it it does show the the sheer scale of the of the problem that we're dealing with here. and it's Joe George, do you want to add something onto what Patrick's Patrick's mentioned here before before we move on.
Joe Streeter (10:46.824)
Yeah, I would just say that it's not just that number that I think that 6200 that they put down, it's also kind of trying to think of the right word, but it's the respawnability of these websites. Once these websites are taken down, you are playing whack-a-mole really because they just pop back up in a different form.
They come about in a very similar way, but just kind of respawn. So that 6200 number, as much as that's quite high, it's also very deceptive in terms of the scale. The scale is much bigger in terms of the actual issue that we're dealing with here. Because, you know, if you take out, let's say you take out 200 of those 6200 or 1000,
they don't die. They will come back in a different form and they will repop up. that doesn't quite do a testament to the scale of the challenge that you're dealing with when you are tackling the full black market network, so to speak.
Anaya McDonald (12:02.247)
Yeah, absolutely. Jo Joe, we'll we'll stick with you very quickly before we go to a break. wha you know, the ECA's had this round table. What what does it want bodies to do? You you mentioned your report earlier and they've got a new mandate. Maybe you could explain a little bit about what that mandate is and if there are any other recommendations that the ECA is suggesting.
Joe Streeter (12:24.798)
Yeah, of course. Well, the ECA were busy because according to our podcast so far, they've had a roundtable, a meeting and a summit this past week.
Anaya McDonald (12:35.123)
I think we're gonna call it a I think we're gonna call it a round table.
Joe Streeter (12:38.224)
We're sticking with a round table now. Okay, okay, okay. All right, I got it. So that was largely on me. Okay, so yeah, one of the key recommendations was Europol. And that is interesting. We know Europol is changing. And if they can kind of bring that in, if they can bring that aligned effort in, I think that would be a very, very strong thing. They've spoken about targeting payment providers as well.
I think you need to bring the big payment giants into the discussion. yeah, largely one of the big measures was around bringing Europol in, it becoming a strategically important part of the process to tackling black market.
the black market activity, it's supporting kind of national law enforcement in various countries rather than being an enforcement agent itself. And yeah, just kind of expanding the gambling focus of Europol is something that is seen to be a key focus for the ECA off the back of this round table.
Anaya McDonald (13:53.78)
Brilliant. Well let's let's keep an eye on on what progress that leads to. But Joe, Patrick will take a quick break and we'll come back and we'll continue the discussion.
Welcome back to iGaming Daily. Now it's quite difficult when we're talking about the the European Union. I often find because it is such a big block. It's twenty-seven different nations, twenty-seven different governments that need to agree to any any laws or any any proposals or any changes. And you know, w it's gambling is really important for us because it's our industry.
But in the grand scheme of the wider politics and economics and things, gambling often isn't at the the top of the priority list. So that said, how likely do you think it is that the EU will look to harmonise online gambling laws? Patrick, do you have any thoughts on this one? I don't think it's very likely, to be honest, Charlie. I mean, it's a a a largely a national concern, really. And if you look at the variation between
some regulation in different EU states. There's such a variation of of of in taxes, in advertising laws, in in in anything really. It's gonna be hard like you said, with the amount the twenty seven you've got to get twenty seven different organisations or countries or jurisdictions to to agree on something. I think it's a it's a tough task. I think with
What's going on now with Europol and you know cooperation with them and and on that side of things, I think that's kind of the best you're gonna get for now. But in in an ideal world, yeah, there would be a harmonisation of of of gun gambling laws, but I don't think there's much political what's the word, maybe political appetite for it at the moment. Yeah, not sure. Joe, did you wanna come in and add something there?
Joe Streeter (15:59.07)
Yeah, harmonize online gambling laws is quite the statement. That's quite the step that's unlikely to ever happen, right? Even our harmonization of taxation is very unlikely. But I think if you can just build some of the bridges to a more collaborative approach to tackling the black market, if you can be harmonized in tackling the network, various member states can support other member states in
enforcement in blocking payments, that type of thing. I think we can get somewhere. I think we can make some steps. Full collaboration is unlikely. Full harmonization is highly, highly unlikely. But just knock down a few of those silos and you could make some progress here. You can start to tackle some of this network.
Anaya McDonald (16:53.841)
Yeah, I I agree with you both that full harmonisation of of gambling regulation seems highly unlikely. But there are proposals for for a one percent levy across the EU, which are being discussed. So we'll we'll we'll keep an an eye on that and just see how how that progresses and if that makes it through Parliament. Here's here's a thought for for the both of you. just the fact that illegal mark the the illegal market i is so large
ninety two billion euros, over six thousand sites. Do you think that supports the idea that, you know, we're seeing so many regulations come in in different markets? Netherlands, Germany, UK, Belgium. do you do you think that those new regulations coming in it's it's not really working without really strong enforcement? Are you finding that consumers are just heading to the black market and going to one of these six thousand sites that that are are available to them? Joe, what do you think?
Joe Streeter (17:53.319)
Yeah, and you know, you miss Spain from that list as well. The deposit limits being seen in Spain are very stringent and you know, we're in a place in Spain where the balance is really kind of tipping both ways. It really is in a delicate place in terms of black market activity. Somebody described it to me once as like a scale. And every time you kind of put the weight on this scale on the regulated industry, you
you do tip it slightly in favor. So you do have to add in terms of enforcement to make sure that it balances out. I think I was talking to somebody about is very niche, very specific, but around like bonus buys and turbo spins and you know, they probably aren't right for the regulated market. But when you take them away from the regulated market, you do tip the scale in favor of the unregulated market. So you need to do something to counteract that in terms of enforcement to.
to kind of balance those books. And yeah, I do, I kind of think that's the same and that's what we're seeing across Europe. the increase, you know, with the FRAs, obviously the massive one this week, but with that, you have to kind of balance out in terms of, yeah, enforcement and action.
Anaya McDonald (19:16.656)
And Patrick, we're s we're seeing that channelization rates across Europe are you know, the tumbling really. You look at places like Sweden, like the Netherlands, like Germany, and you know, the black market holds significant sway in terms of that that market share. You know, where where where do you see the biggest problems being in terms of those channelisation rates? And are are there any other reasons why, apart from regulation that
That the regulated sector is is struggling so much? Well, yeah. I mean, we keep mentioning rises in taxes, but across the EU in various different jurisdictions, we've seen advertising bans and you know, advertising restrictions. channelisation is going to decline if you are seeing less you know, I'm not advocating for wholesale gambling adverts on television. I think that's a that's something that very few people agree with.
But what there is is what you're gonna get if you you kind of reduce that and the prevalence of marketing from unlicensed platforms is you're gonna see channelization rates drop. I think in Germany, which is one of the the most which has one of the most preval prevalent black market black markets has a channelization rate of about seventy five percent or something, which I think
Countries across the EU aim for what a channelization rate of about ninety percent, which is i is a bit ambitious, but you ca you kind of see the the mismatch there. They're they're a very, very long way off of what they're what what they're looking for. And if you keep applying these stricter regulations to these companies and they have less marketing spend, less room to to offer products that that customers may be enticed by.
Then customers are gonna look at this illegal site, which they may not know is illegal and it says, as Joe says, something like a bonus buy or or this ridiculous sign up offer where you're getting way more bang for your book, if you will, on the face of it than than you would for a from a licensed site, th then of course they they're gonna drop because because customers don't, you know, they don't look into it much more than that. They think
Anaya McDonald (21:40.335)
There's a bit of value, I'm going to use that one. I don't know. This is illegal. This this is Miles better for me. I I'm seeing this one first. I'm not seeing an ad advertisement from, you know, take France, for example, an FDJ United company or in the Netherlands, a Unibet, because because of advertising bans and and and and other kind of limitations that that have been imposed on them. So so you know, the to improve channelisation rates while
Massively regulating massively regulating the the licence market i is a is a tough task. I'm not advocating for for no regulation at all because there needs to be some. Of course there does. But but but as as long as you're making this this stricter then that then there's there's gonna be a drop in in channelisation rates for me. Yeah, certainly. I I look at I look at it from the lens of, you know, you it has to be firm but fair and I think operators will
Joe Streeter (22:28.726)
Yeah.
Anaya McDonald (22:36.412)
would be happy with that. And I look at a jurisdiction like Ontario, which managed to within twelve months, after having a a really prevalent grey market, ended up with a channel I channelisation rate of over ninety percent with it within twelve months, which I think a lot of European jurisdictions would now look on wi with a bit of envy. Joe, please do add add here if you wanted to.
Joe Streeter (22:57.431)
Yeah, a couple of points there about the education is absolutely vital and just through sponsorship, not adding legitimacy to black market operators. were kind of a couple of examples that I kind of wanted to, we're sure I was going to get in, integrate into this conversation somehow. I've not managed to do it, so I'm going to clumsily bundle them both in at the end. One is around, we know that steak are going back on the sleeve of one of
you know, the Premier League's oldest football clubs in Everton next season. That's, you know, that doesn't help the cause at all. It adds legitimacy to an operator. It's, you know, it's within the rules. But, you know, when you see things like that, when you see exposure like that for an unlicensed operator, it adds legitimacy to these firms. They're viewed by lots and lots of a new generation. And yeah, so I think full support to
Is it Flutter's campaign to remove sponsorship of unlicensed firms from English sports? And another one I wanted to point out, we do see a lot of regulated gambling sponsorship on screens, on radio, whatever. I wanted to pay tribute to an advert, I'm sure it was with Coral, but with...
Big John, the influencer we know, he's very UK, UK based influencer, but he speaks to an audience. He does engage an audience. They did some great fun activations around the World Cup with him, but they also did an activation where he spoke about the dangers of the black market. They used their advertising time with their ambassador to not speak about market, not speak about betting markets or who's going to win the World Cup or da, da, da, da, da, da, or any fun stuff.
They also use that space to talk about, to get him to speak to their audience about, and to a wider audience about the danger of the black market, about the threats of a black market, and just being aware of why you should bet with a regulated site and not on the black market. I pay tribute to that because I think it's a strong way to reach an audience in the modern world. And that's how the black market reaches their audience, right? Through influencers.
Joe Streeter (25:24.033)
through streamers. So I think the regulated market in a sense needs to take a note from the unlicensed markets book and with some of their big brand ambassadors, get them to speak to the audience about the black market and educate a younger generation about the dangers and the risks of venturing onto unlicensed operators.
Anaya McDonald (25:44.185)
Yeah, I wholeheartedly agree with you there, Joe. I think that campaign from is is really strong. because w we tend to be quite intro Yeah, yeah, yeah, I did. I I I think as an industry we can be quite introspective about these things and just say, well, the illim the illegal gambling market is terrible. But we're not really sending that message to the players and I think this this campaign from Entain and the and the wider campaign, just take take the big John campaign aside. The
Joe Streeter (25:50.743)
Yeah, you saw it as well.
Anaya McDonald (26:13.637)
They are coming out very heavily a against the illegal market and saying to players they need to be regulated. they need to be betting with regulated platforms if they if they're gonna choose to to to gamble. So no, I'd like to see more communication like that with with the the wider public. so yeah. ten ten points for for Entain, I guess. all right. Well, Joe, Patrick, thanks a lot for joining me today. That's all we've got time for for now.
Thanks to Optimu for supporting the show as always, and to our listeners. Thank you for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.