Black market casinos – making an ethical choice as a business

Grey and black markets are a hot topic right now with lawmakers and operators contributing to discussions about how the industry should respond to the rise in unlicensed online casino brands targeting players in regulated markets across the world.

The problem spans all corners of the globe – from the USA to Europe, unlicensed sites are taking players and revenues away from licensed operators and governments that benefit from the tax dollars they pay on the money they make in the market.

But at Casino.ch, we believe this issue is more than just a financial one. There are moral issues surrounding black markets and unlicensed brands, from a lack of player protections to some even actively targeting players who have self-excluded.

These brands are also being actively promoted by unscrupulous affiliates putting profits before protecting the most vulnerable players out there.

How big is the black market problem?

Power player operator Entain recently published a report with Regulus Partners (Reducing online gambling black markets – an analysis of international practices used to combat online gambling black markets) in which it estimates £2.7bn is staked via black market operators in the UK each year.

On the other side of the pond, the American Gaming Association says that Americans bet $64bn a year with illegal online sportsbooks and a staggering $338bn with illegal online casinos.

These are massive numbers so it’s no surprise that lawmakers and operators want to take additional steps to combat unlicensed brands and increase channelisation to their licensed sites, especially in markets where margins are shrinking and profits are dwindling.

Enforcement action will certainly help but it’s important to understand why players are turning to the black market in the first instance.

Why players are turning to black market casinos

Players turn to black market brands because licensed brands are restricted to the extent that they can’t offer the experiences they are seeking across bonusing, products, payments, stake limits, pricing and more.

In addition, there can be a lack of customer choice in some markets as the regulations can be so stringent that it becomes unviable for operators to remain active in the jurisdiction – this is certainly something we’ve seen at Casino.ch with a mass exodus of brands in from the UK in recent years.

Let’s take a look at some of these reasons in more detail.

Bonus restrictions – in some markets, regulators have come down hard on operators offering bonuses that could be seen to encourage players to gamble more than they can afford. This has seen brands water down their promotions.

Stake limits – the UK Gambling Commission recently rolled out stake limits on online slot games – £5 for over 25s and £2 for under 25s – restricting players.

Separate accounts for sports and casino – players in Belgium are required to have separate accounts for sports betting, casino and arcade games which adds more friction, especially for those who like to mix and match casino play with sports wagering.

Online casino bans – in some markets such as France, online casino is banned while sports betting is regulated and licensed. The ANJ, the French gambling regulator, estimates that up to €1.5bn is spent with black market casinos each year as a result.

These are all issues that regulators and operators need to work together to overcome, but the size of the black market is undoubtedly being fuelled further by affiliates promoting unlicensed brands to their players.

Affiliates need to do the right thing

This should be a hard no for any affiliate – at Casino.ch. we believe affiliates should be on the side of the player and help them find reputable, responsible and safe online casino brands to play at. Pushing unlicensed sites, especially those accepting players who have self-excluded, is just wrong.

An affiliate needs to build trust with players but if they are recommended unlicensed brands, that’s not going to happen. If the player has a bad time at the casino, the negative experience will harm the relationship you have built with the player, and they might never come back to you again.

But more than that, it’s our job to protect players and we can only do that if we recommend licensed brands that have the necessary tools in place to help them stay in control of their play and also provide the support they need if that play becomes problematic.

Affiliates can’t resolve the issue of the growing black market, but we can certainly contribute to the solution by supporting licensed sites and educating players as to why they should play with them over those available on the black market.