Australia is at a point where something needs to be done to increase security, up regulatory enforcement, and protect players. With illegal offshore operators making up a third of all online gambling, something needs to be done.
Australia is currently facing many challenges in the online gambling sector due to an increase in illegal offshore operators.
A recent report revealed that these unlicensed gambling sites now account for about a third of the online gambling activity within the country. These findings are an urgent call for stronger regulations, consumer protection, and law enforcement.
A recent report commissioned by Responsible Wagering Australia (RWA) and prepared by H2 Gambling Capital shows the growing influence of illegal operators.
According to the report, the size of the offshore gambling market reached AU$3.9 billion in 2024. And it is expected to hit UA$5 billion by 2029.
The illegal sector has essentially doubled in size since 2019, which is by far outpacing the regulated industry. The report also shows that about one in every five dollars spent on sports wagering in Australia goes towards illegal operators. And the expansion of offshore gambling will lead to about AU$1.76 billion in lost taxes and fees over the next five years.
Some of the biggest drivers in growth have been weak enforcement, aggressive marketing from these sites, and product bans. Ultimately, it’s not just a risk to consumers but also to the economy.
There’s no disputing the rise and increase in popularity of offshore casino and betting platforms across Australia. But why is this the case?
With product bans keeping Australians away from things like online casino games, more players are driven towards foreign operators to play slots, dice games, virtual sports, and more.
Not to mention the weak enforcement, as regulators are struggling to effectively block these sites. Making them easily accessible for players. It also doesn’t help that aggressive marketing tactics create awareness and draw in the players.
With ease of accessibility via desktop and mobile devices, it has become even easier for players to bypass restrictions and access illegal sites. Ultimately, we need to look at the public demand for banned products and the limited enforcement capacity, which, combined, creates a field of opportunity for these operators.
Australia is one of the areas with the highest participation rates in the world, and online gambling is one of the most popular pastimes among locals.
While online sports betting is legal and regulated, other forms of gambling, like online casino games and poker, have been banned under the Interactive Gambling Act (2001). And the Australian Communications and Media Authority (ACMA) oversees blocking illegal sites, issuing fines, and enforcing the law.
The regulated online gambling market generates billions in annual tax revenue, and licensed operators have plenty of responsible gambling measures in place, including limiting tools and self-exclusion programs.
Despite the safeguards, players are drawn to offshore platforms that offer a wider range of games along with fewer restrictions.
One of the biggest concerns is not the economy but the impact it will have on public health, as the majority of illegal operators tend to have little to no responsible gambling tools and resources in place. This leads to an increase in problem gambling.
Another concern is how aggressive online marketing can reach younger demographics and normalise the act of gambling. Players participating in gaming action on these sites are vulnerable to fraud or exploitation.
Addiction is very serious and has been linked to depression, anxiety, and other mental health challenges. And while licensed operators are required to implement responsible gaming tools and measures, these foreign operators are outside the rules, which increases risk.
Australia is not the only country struggling with illegal gambling. Other jurisdictions also currently battling these issues include the United States, the United Kingdom, and the Asia-Pacific.
Many have strict bans in place on online gambling, yet struggle to keep illegal operators away. Digital gambling is on the rise with technology making it even more attractive to players worldwide, increasing accessibility, but also creating more risk and problems for regulators.
If the illegal market continues to expand, Australia could be looking at losing AU$1.76 billion in taxes and fees. With the current legalities in place, these funds can be used to fund public services and resources.
To address the problem, Australia will need stronger enforcement so the ACMA can effectively block these illegal sites. They should also be more active in their approach to raising awareness about the risks that come with playing at illegally operated platforms.
But most importantly, Australia will need to revisit its product bans and consider policy reform, which could mean expanding the regulated market.
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