Player protection and responsible gaming in the iGaming industry have been on a rollercoaster of evolving regional compliance across markets employing a broad range of standards for over twenty-five years. Since the Isle of Man introduced the Online Gambling Regulation Act, the awareness of, and the need for, player protections have definitely been growing. Yet back in 2001, there were global platforms operating entirely without licensing, offering no responsible gaming tools,and without as much as a mention of responsible gaming on their website.Here’s the scary part... they still exist today.

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From where this piece is being written in Spain, I just Googled a well-known skin-gambling site,estimated to net over $10M per month, which is entirely unlicensed. I am able to deposit by card and use open banking, which also localises bank access to my region. Overall there are 22 payment options available across FIAT and crypto. I also hopped on my VPN, and was able to access this same site from the UK, Germany, France, Brazil, etc...

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This is why the industry cliché about over-regulation pushing players toward unregulated markets keeps appearing in webinars, panels, keynotes, and roundtables. It may be overused, but it’s grounded in reality. For instance, in Sweden, one of Europe’s most mature regulated markets, the Gambling Authority reported that around 14% of total play still occurs with unlicensed operators,showing that stricter rules alone don’t guarantee player channelisation. What a lot of people do not realise, is that those unregulated operators are not competing 1:1 on everything but friction, a lot of the time, they are already providing a more appealing iGaming experience. This is particularly true of younger generations whose expectations have been moulded by video gaming ecosystems and features, which are reflected in the unregulated operators’ offerings. It’s familiar to them, it’s rebellious and it’s cool, in contrast to the website your boomer uncle Gary won that acca on before losing it while playing the ‘Right On Groovy’ slot.

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The illegal online gambling market in the U.S. alone was estimated at $41 billion in 2023,dwarfing the legal sector in several states, a tremendous number. So while it may be a little ambitious to expect that as soon as 2026 regulators and operators will innovate in light of just how easy and appealing illicit operators can be, to anyone, but particularly Gen-z and young Millennials, it’s certainly going to be something which flashes increasingly brighter on radars as time goes by. And, as usual,when the impact on the bottom line becomes undeniable, then action will be taken. This will either bein the form of enhanced education, interest representation or dynamic and reactive compliance which aims to reduce friction for the end users, but likely all three.

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The trick is to strategically ease regulation, safely and just enough to allow for innovation that keepsup with unregulated operators’ products and features. Branding trust as part of the experience (something which banking has excelled in) all while reducing friction such that compliance becomes almost invisible, meaning that the safest players are the ones who never even know it’s there. And in the absence of immediate regulatory action, reducing friction becomes essential. In fact Sumsub datas hows that reducing verification friction can cut onboarding drop-offs by up to 30%. These effortsc ombined will be the defining factor between the operators who struggle in regulated markets, and those who truly flourish.