Is the Sky Falling?
The problem of illegal gambling isn’t going away. In 2026, amid regulatory controls and tax rates ratcheting up, the limits of how much pressure the legal sector can bear before players drift offshore will be tested.
Higher taxes in markets such as Illinois, Great Britain and the Netherlands—coupled with stricter advertising rules across multiple states and a slowdown in new market openings—all play into the black market’s hands. Licensed operators are facing mounting costs and have fewer channels to reach players. That presents an opportunity for unlicensed sites to seize advantage, offering everything regulated platforms cannot, whether that’s better odds, broader product ranges or no limits on spending.
Following almost two decades of rapid legalization, the pace of expansion has slowed. While Brazil—one of the markets looking at restrictions and tax rises—or the UAE are bright spots, fewer opportunities arise for growth. Yet legislators treat gambling’s visibility as a surge in activity, rather than evidence of effective channelization. The more normalized the legal market becomes, the more it grows politicians’ appetite to rein it in. This risks sending more players offshore.
Take the Netherlands, where licensees were hit with a tax hike (a second follows next year), a ban on above-the-line advertising, and spending limits for players. Black market revenue for the first half of 2025 reached an estimated €617.9 million ($715 million). The regulated market? €600 million over the same period.
This is evidence that product and marketing curbs, higher taxes and friction for legal operators create space for illegal operators to fill. Offshore sites operate with minimal oversight, no tax burden and few limits on what they can offer, and to whom. The players, especially digital natives used to shopping around for the best deal, are attracted to the best offering, and that can supersede the risks.
Regulators aren’t blind to the threat. Across the industry, they are stepping up efforts to crack down, with new digital tracking tools springing up and new cooperation agreements. But shutting down sites that hide behind shell companies, crypto payments and offshore hosting is another matter. Even when regulators identify offenders, there’s no guarantee these entities will pay a fine or abide by a cease-and-desist order.
The scale of the problem remains frustratingly opaque. Estimates of the global illegal gambling market range from billions to trillions. Such divergent figures make it difficult to rally stakeholders to the cause.
In Great Britain, the Gambling Commission’s own evolution tells the story. In 2021, its CEO at the time responded to a report on the scale of the black market by arguing it was “being exaggerated” in order for the legal industry to dodge stricter regulations. By 2025, the commission admitted it was struggling to find a reliable way to measure it. “Illegal gambling is not a static threat,” said John Pierce, commission enforcement director. “It is adaptive, opportunistic and increasingly embedded in digital ecosystems on the international stage.”
That adaptability makes 2026 potentially pivotal. Regulators can only regulate what they can see, and as black market play puts more players at risk, this blows back on the legal industry. Licensees shoulder costs of compliance, taxes and social responsibility measures to the point they are almost subsidizing their unregulated rivals. Without efforts to measure the offshore market and form a coordinated global response, the new world order of higher taxes and regulatory restrictions risks entrenching the forces it was designed to keep out. The sky isn’t falling just yet. But unless industry stakeholders find a compromise that makes legal play more attractive than the alternative, 2026 could mark the year the black market becomes the competition, rather than a shadow economy.
