Ismail Vali, Yield Sec founder, CEO and president, revealed the figures while presenting a panel discussion at ICE London. He mentioned there had been “explosive growth” in illegal gambling in Africa and the Middle East, as well as “high growth” in the Americas, with firm to light regulation.
“We found there is a sea of criminality out there,” Vali said. “It’s nothing like the black market we thought it was, but this is something where most markets are inherently compromised by crime.”
The presentation touched on individual markets, with Hungary a standout, where Yield Sec estimates as much as 93% of gambling revenue is generated illegally by close to 250 operators.
Elsewhere in Europe, Vali said slot regulation had been exploited by the black market in Germany as a means to entice consumers, on the promise of a quicker and more reliable experience. A survey conducted by University of Leipzig economist Gunther Schnabl reported that only 50.7% of gambling in Germany was channelled to legal offerings.Vali also revealed there are 2,000 illegal operators currently active in Belgium; a country which implemented a gambling advertising ban last July.
“From our perspective, Belgium’s gambling advertising ban is insane,” he said. “The ban has brought about a weaponisation of the gambling community and thousands of consumers have been impacted by it.”
The latest research comes after Yield Sec calculated in January that 4% of the UK’s online gambling revenue is generated illegally.
In the US, Yield Sec estimates about 50% of overall gambling revenue is generated legally. Based on the American Gaming Association’s (AGA) figures, commercial gambling revenue alone would have generated about $60bn last year.
Legal gambling’s share of overall gambling revenue in the US is expected to increase as more states legalise sports betting, with 38 states now operating regulated sports betting markets.
Alexandra Costello, VP government relations for the AGA, was part of the panel at ICE London.
She said: “As states are becoming more mature, the number of searches for illegal sites in states where sports betting is legal has been going down heavily. Our challenge is to continue to educate consumers about where they can bet safely.”