Issuing licences does not clear unlicensed operators out of a market. That single misunderstanding sits behind most of the disappointment with gambling enforcement regulation in Europe: a parliament passes a licensing act, operators pay for permits, and everyone assumes the offshore sites quietly disappear. They do not. They keep accepting deposits from the same players, in the same language, with the same payment rails, until someone with legal powers, a budget and a reason to hurry makes them stop.
That is the argument now playing out in Sweden, where the country’s online gambling trade body, BOS, has gone public with a call to overhaul how enforcement is carried out, as reported by igamingbusiness.com. It is worth reading not as a Swedish story but as a diagnostic one.
What Sweden’s gambling trade body is actually saying
The complaint is about enforcement, not about licensing. Sweden’s online gambling trade body is calling for the enforcement approach against unlicensed operators to be rebuilt, arguing that the current method of pursuing offshore sites does not deter them, while licensed operators carry the full cost of compliance. The ask is for stronger, faster action against operators outside the licensing regime.
Note what is not being asked for. Nobody in that submission is proposing that Sweden abandon its licensing framework, which came into force in 2019 and put online casino and betting under permits issued by Spelinspektionen, the Swedish Gambling Authority, alongside the national self-exclusion register and a gross gaming revenue tax. The framework is accepted. The objection is that the part of the system meant to make the framework meaningful, the part that removes the incentive to operate without a licence, is not doing enough work.
Be honest about the limits of what the public reporting establishes. It tells us the direction of the demand and the fact that an industry body felt the need to make it loudly. It does not hand us a verified ledger of enforcement actions, nor an agreed measure of how much of the market sits offshore. Those numbers are contested in every jurisdiction where this fight happens, which is itself part of the problem.
Channelisation rate: the scorecard that matters
A channelization rate is the share of total gambling activity in a country that takes place with licensed operators rather than unlicensed ones, usually measured by turnover or gross gaming revenue. It is the single figure regulators and trade bodies argue over, because it answers the only question that matters for a licensing regime: did the players actually move inside it?
How a low channelization rate signals an enforcement problem
When channelisation falls, two explanations compete, and separating them is where policy gets decided. One is product: licensed operators are constrained by rules that unlicensed ones ignore, such as deposit caps, bonus restrictions, advertising limits and mandatory self-exclusion, so the legal offer is simply less attractive to the heaviest spenders. The other is enforcement: unlicensed operators face no meaningful cost for serving the market, so they stay.
Industry bodies tend to argue the first and regulators the second, and the uncomfortable answer is that both are usually true at once. A licensed product that is deliberately less appealing than the illegal alternative only holds its market share if the illegal alternative is hard to reach. That is the logic connecting consumer-protection rules to enforcement budgets, and it is the reason a channelisation figure cannot be read as a verdict on either one in isolation.
The measurement itself is also soft. Unlicensed activity has to be estimated from payment data, traffic analytics and survey responses, so the figure you cite often depends on who commissioned the study. Treat any precise channelisation percentage as a modelled estimate, not a count.
Licensed vs black market betting: what’s actually lost
The practical difference between licensed and black market betting is not moral, it is structural. A licensed operator in Sweden is bound to the national self-exclusion register, so a player who has blocked themselves stays blocked across every licensed site. An offshore site is not connected to it, which means the single most effective tool a player has for stopping is undone by one search and one deposit.
Beyond that, three things disappear with the licence:
- Dispute resolution. A player with a withheld withdrawal or a disputed bonus term has a regulator to complain to in a licensed market, and nothing but the operator’s own support desk outside one.
- Verifiable game fairness. Licensed markets require tested RNGs, published rules and audited return-to-player figures. Nothing guarantees those on an unlicensed site, and the player has no way to compel an audit.
- Tax contribution. Gambling taxed in Sweden funds the state and, indirectly, the regulatory and treatment apparatus. Revenue routed offshore leaks out of that system entirely while the social costs stay domestic.
Add the KYC gap. Licensed operators must verify identity and age; unlicensed ones frequently do not, which is how underage and self-excluded players end up with accounts. That is the concrete consumer-protection loss, and it is why channelisation is treated as a public health measure and not just a tax question.
Enforcement toolkits differ more than licensing regimes do
Across Europe, licensing regimes have converged on broadly similar shapes: permits, taxes, duty-of-care obligations, advertising rules. The enforcement models underneath them have not converged at all, and that is where outcomes diverge. Each tool has a characteristic weakness.
| Enforcement tool | How it works | Where it breaks down |
|---|---|---|
| Domain and DNS blocking | ISPs are ordered or instructed to block listed unlicensed gambling domains; used in markets including Italy and Poland, which maintain blocklists | Mirror domains reappear quickly; VPNs and app stores route around it; list maintenance is a permanent cost |
| Payment blocking | Banks and payment providers are required to refuse transactions to identified unlicensed operators | Depends on correct merchant identification; crypto and intermediary processors sit outside it |
| Fines and penalty orders | The regulator sanctions operators targeting its market without a licence | Collection against an entity with no local presence or assets is often impractical |
| Licence conditions and revocation | Strongest against licensed operators, including suspension or withdrawal of the permit | Has no reach at all over operators that never sought a licence |
| Supply-chain pressure | Action against affiliates, game suppliers and advertisers that service unlicensed sites | Requires clear statutory basis; suppliers restructure or route through third parties |
Read down the right-hand column and the pattern is obvious. Every individual tool is evadable. What distinguishes a functioning regime from a nominal one is not which tool it owns but how many it can use together, how fast it can use them, and whether a determined operator expects the process to outlast its own patience.
What separates an enforcement model that works
Four design factors do most of the explaining, and none of them is about how strict the rulebook sounds.
- Speed of legal process. If blocking an unlicensed domain requires a full court proceeding per domain, the operator registers new domains faster than the state can close them. Regimes that work give the regulator an administrative route with judicial review after the fact, not before it.
- Dedicated resourcing. Enforcement against offshore operators is investigative work: traffic analysis, test transactions, corporate tracing. It competes for budget with licensing and compliance supervision, and in most regulators it loses.
- Cross-border cooperation. Operators licensed in one jurisdiction and serving another are only reachable if the two regulators exchange information and the first is willing to treat the second’s law as its business.
- Political will to accept collateral cost. Blocking and payment restrictions impose duties on ISPs and banks that have nothing to do with gambling. Legislatures that are unwilling to impose those duties end up with enforcement powers on paper only.
Regulators deserve some sympathy here, and the trade body framing tends not to extend it. A gambling authority cannot vote itself more staff, cannot rewrite its own statutory powers and cannot compel another country’s regulator to act. When industry says enforcement is failing, the honest translation is usually that the legislature under-built the enforcement side of the statute, and the regulator is living with the result.
The trade-off nobody has solved
Here is the bind. Tighten consumer protection inside the licensed market and you raise the relative appeal of the unlicensed one. Loosen it to compete and you weaken the point of licensing. Close the gap with enforcement instead and you need powers that intrude on ISPs, banks and, by extension, ordinary internet access, with a running cost and no permanent win. There is no configuration that delivers high channelisation, strong player protection and light-touch enforcement at the same time, and any advocate claiming otherwise is selling one of the three short.
Sweden is simply the market where that trade-off is currently being argued out loud. The same argument is active wherever a licensing regime has matured past its launch phase and the channelisation number has stopped improving. What to watch is narrow and concrete: whether legislatures grant administrative blocking powers rather than court-by-court ones, whether enforcement gets a ring-fenced budget line instead of a share of a general one, and whether regulators start publishing enforcement activity in a form that can be checked against channelisation estimates. If a government responds to a complaint like this one by relaxing licensed-market rules instead, that tells you which side of the trade-off it decided it could not afford.
Players reading this from outside the policy debate get one practical thing from it: a licence is the only part of the system that gives you a regulator to complain to, a self-exclusion register that actually holds, and audited game outcomes. Anyone gambling should use deposit and loss limits and treat the spend as a cost, never as income.