The rising cost of compliance in Europe’s regulated gambling markets

Europe’s licensed gambling sector is still huge — €123.4bn in gross gaming revenue (GGR) in 2024, with online gambling at €47.9bn — but the cost of staying regulated is rising fast. For PSPs and acquirers working with gaming merchants, that matters because tax hikes, licence fees, supervision levies and tougher player-protection rules all feed straight into margins, channel performance and merchant survival.

1. According to the European Gaming and Betting Association (EGBA), Europe’s regulated gambling market generated €123.4bn in GGR in 2024. Online gambling accounted for €47.9bn, or 39 per cent of the total, making it the fastest-growing segment. EGBA members alone contributed €3.8bn in taxes to European economies in 2024.
2. Governments facing budget pressure have been raising gambling taxes, increasing licence fees and adding supervision costs. The stated aim is to fund public services and strengthen player protection, but the practical effect is straightforward: licensed operators face thinner margins, less room for bonuses and tighter budgets for marketing and product development.
3. The core risk is channel shift. As the regulated offer becomes less competitive, some activity moves toward unlicensed offshore operators, which do not pay the same taxes or regulatory fees and can compete on bigger bonuses, better odds and fewer restrictions. In other words, fiscal pressure can weaken channelling instead of improving tax take.
4. The UK is a clear example of the scale involved. A Frontier Economics study, commissioned by the Betting and Gaming Council (BGC), estimated that £2.7bn (US$3.6bn) is staked each year with unlicensed online operators — around 2.1 per cent of the money wagered with licensed online operators — plus a further £1.6bn (US$2.1bn) staked in illegal premises.
5. The pressure falls hardest on smaller operators, which have less room to absorb higher taxes, fees and compliance costs. That usually means more consolidation, fewer marginal brands and a tougher environment for PSPs that rely on a broad base of licensed gaming merchants.

For regulated payment providers, the key question is not whether Europe’s gambling market is large — it is — but how much of that volume stays inside the licensed perimeter as governments continue to use the sector as a revenue source. The less competitive the regulated offer becomes, the more attractive unlicensed alternatives can look, and that is where acquiring risk starts to get messy.