BEATING THE BLACK MARKET
Equally important is the concept of channelisation, or making the regulated market a more attractive alternative to the black market. A 2024 report by Regulus Partners 9 introduced a useful analytical tool, quantifying the “frictions” that drive players toward illegal operators: product frictions (restricted betting options, low return- to-player rates), price frictions (high effective tax rates reflected in worse odds), and customer choice frictions (limited payment methods, slow payouts, restrictive account management). When these frictions accumulate, even well-intentioned regulation can inadvertently create what game theory would describe as incentive-compatible conditions for choosing illegal alternatives. Reducing these frictions, without compromising player protection, represents the core challenge for regulators who wish to play the infinite game. Finally, the Courage to Lead demands that regulators resist the temptation to pursue politically visible but strategically ineffective measures. Denmark’s introduction of a statutory gambling levy in April 2025, requiring all licensed operators to fund research, education, and treatment related to gambling harm, illustrates this courage. Rather than treating harm reduction as a regulatory burden imposed from outside, it embeds it into the business model itself, aligning the interests of operators with those of the regulator and the public. This kind of structural innovation is far more aligned with an infinite game mindset than reactive enforcement measures designed primarily to demonstrate political will. Conclusion Empirical evidence drawn from the practical application of regulatory and enforcement measures across European gambling markets shows that, while the expansion of illegal gambling has in some cases been partially contained, the existing frameworks have largely failed to deliver a strategically and consistently effective response.
Considering these findings, the evidence supports a fundamental shift in regulatory perspective rather than merely adding more enforcement tools. The illegal gambling market increasingly exhibits characteristics of an ongoing, adaptive system, capable of reallocating resources and rapidly adjusting to targeted interventions. As such, addressing this trend as a finite conflict with the objective of complete eradication appears inconsistent with its reality. A more sustainable approach would treat the black market as an infinite game, in which the primary objective is not absolute elimination but the perpetuation of its existence until they decide, on their own, to withdraw. Ultimately, the available data indicate that sustained pressure through narrowly focused, strategically aligned interventions offers a more realistic pathway to reducing the impact of illegal casino markets than attempts at comprehensive suppression. The effectiveness of this approach lies not in achieving a definitive endpoint, but in maintaining regulatory resilience until unlicensed operators are progressively deprived of the financial, technological, and organisational resources necessary to continue operating at scale. The persistent focus on controlling the behaviour of illegal operators reflects a finite, reactive approach that consumes legal resources, producing only a measurable reduction in the problem. What the evidence does support is a regulatory posture built on adaptability, collaboration, and strategic patience. This means investing in multi-stakeholder coalitions that extend enforcement beyond the regulator’s own walls, pursuing channelization by making regulated markets genuinely competitive rather than merely permissible, and embracing the flexibility to pivot when legal or technological conditions change. In the infinite game, the measure of success is not whether the black market has been eliminated, but whether the regulated ecosystem has become resilient enough to outlast it.
LUIS PORTELA DE CARVALHO Partner, Lektou For more information contact luis.carvalho@lektou.com +351 911 140 262
MARTA BOTICA SANTOS Trainee Lawyer, Lektou
9 https://www.entaingroup.com/media/zh2n0i0s/regulus-report-2024-black-market-gambling.pdf
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IMGL MAGAZINE | MARCH 2026
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