BETTER REGULATION
simply migrate to unauthorized operators. The outcome is predictable: monopoly does not eliminate the black market; it feeds it. Additionally, licensing concentration systems increase the risks of corruption and reduce transparency. The artificial scarcity of authorizations significantly raises their economic value, creating incentives to obtain – and retain – them through undue influence. At the same time, the absence of competition eliminates cross-monitoring mechanisms among operators, that is, the indirect oversight that competitors themselves exercise in open markets. In a monopolistic environment, there are no operators supervising each other, nor competitive pressure from consumers to discipline market behavior. The entire burden of control falls on the authority, weakening enforcement. Under these conditions, monopoly not only restricts legal supply, but also creates the perfect breeding ground for opacity, corruption, and the expansion of the black market. Consider the case of Uruguay, for example. Pursuant to Articles 244 and 245 of Law 19535 of 2017, the Uruguayan legal framework subjects online gambling to a principle of illegality and authorizes measures such as the blocking of websites, payment methods, and advertising. However, the system itself provides for an exception: since 2020, legal supply has been channeled through a single operator authorized by the State, the Banca de Cubierta Colectiva de Quinielas, which operates the website supermatch.com.uy 8 . However, empirical evidence shows a different reality. When reviewing web traffic measurement platforms such as Semrush 9 , it can be observed that Supermatch is not the only – nor necessarily the most visited – online gambling site accessible from Uruguay. The paradox is evident: despite a restrictive legal framework and the existence of an authorized operator, a significant portion of demand is channeled toward unauthorized platforms. The State collects no taxes from this activity, and users lack an effective local authority to which they can
turn in case of disputes. In other words, this model does not eliminate the black market nor succeed in capturing it; it simply tolerates it without generating public benefits.
4. Excessive or complex taxation Tax policy plays a determining role in shaping the online gambling market and in the decisions of operators and players to remain within the regulated system. Disproportionate or excessively complex tax structures not only erode the competitiveness of the formal market, but ultimately undermine the very regulatory objectives they seek to achieve. In various jurisdictions, online gambling operators face an overlapping set of tax burdens, including taxes on gross gaming revenue, on net income, on transactions, as well as licensing fees and fixed annual contributions. At the same time, players may be subject to taxes on deposits, wagers, and even on their winnings. This fragmented tax architecture often reflects legislative responses aimed at maximizing short-term revenue rather than a coherent, predictable fiscal design compatible with constitutional limits on the exercise of taxing powers, which in many cases has led to controversies resolved by constitutional courts. However, beyond questions of constitutionality, from the perspective of market ordering, it can be asserted that irrational tax structures generate predictable economic effects: they displace activity towards informality. When the tax burden exceeds reasonable thresholds, the regulated market ceases to be competitive in comparison with unauthorized alternatives that operate without such burdens. The Bolivian model constitutes an example that merits analysis. Through Law 060 of 2010, a scheme is established that combines a gambling tax applicable to the operator at a rate of 30 percent on gross revenue, together with a tax on player participation at a rate of 15 percent on the sale price – understood as the amount paid by the player to access the
8 By Resolution No. 032/2020, dated January 15, 2020, the National Directorate of Lotteries and Quinielas of Uruguay determined that gambling activities conducted over the internet shall be organized by the National Directorate of Lotteries and Quinielas, and their administration shall be carried out by the Banca de Cubierta Colectiva de Quinielas 9 Semrush, “Top Gambling Websites in Uruguay,” accessed April 5, 2026, https://www.semrush.com/trending-websites/uy/gambling
IMGL MAGAZINE | JUNE 2026
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