How fragmented regulation in iGaming affects key markets

The global iGaming industry is expanding rapidly, yet its progress is frequently hindered by fragmented regulatory frameworks. These inconsistent and evolving regulations across various markets create operational challenges for licensed operators while fostering unregulated activities in some regions. Here’s a comprehensive look at how different regions handle iGaming regulations, as highlighted in SOFTSWISS’ iGaming Trends 2025 report.

North America: Leading in regulation but facing fragmentation

United States

The US iGaming market, expected to surpass the UK in size by 2025, is driven by online casinos and sports betting.

• Legal landscape: Only seven states, including New Jersey and Michigan, allow online casinos, while 38 states have legalised sports betting.

• Taxation: Highly variable, with New Jersey taxing iGaming revenue at 15 percent, while Pennsylvania imposes a hefty 54 percent on slots revenue.

• Challenges: Operators face fragmented regulations and slow legislative progress in major states like New York and Illinois.

Canada

Ontario leads Canada’s iGaming market, with total wagers reaching CAD 18.4 billion (EUR 12.33 billion) in Q1 2024.

• Key developments: New rules limit influencer advertising to promote responsible gambling, and a centralised self-exclusion system is being introduced.

South America: Emerging giant with regulatory risks

Brazil

Brazil legalised sports betting in 2023 and online casinos in 2024, with a projected iGaming revenue of USD 4.03 billion (EUR 3.71 billion) by 2029.

• Taxation: Operators are taxed at 12 percent on GGR, while player winnings above BRL 2,112 (EUR 338) incur a 15 percent tax. Each license costs BRL 30 million (EUR 4.8 million).

• Threats: Proposed legislation could ban all online gambling, creating uncertainty for operators.

Argentina

The market is expected to grow to EUR 1.3 billion by 2024.

• Key changes: Buenos Aires mandates biometric verification for players, while federal legislation aims to limit gambling advertising.

Peru

Newly implemented regulations in 2024 include a 12 percent tax on GGR and licensing requirements for operators.

• Growth: The market is expected to grow at a CAGR of 5.97 percent, reaching USD 420.6 million by 2029.

• Europe: Mature but facing over-regulation

United Kingdom

The UK remains the second-largest regulated iGaming market globally, with projected revenues of EUR 12.68 billion in 2024. However, its regulatory landscape is tightening:

• Key rules: Slot stakes are capped at GBP 2-5, depending on age, and enhanced financial vulnerability checks became mandatory in 2024.

• Impact on players: Excessive restrictions have driven 1 in 12 UK players to black market platforms. Unregulated operators now handle EUR 3.24 billion annually, posing significant risks to player safety and tax revenues.

• Underlying factors: Stricter affordability checks, delays in verification, and limited product offerings have alienated players, making unlicensed platforms more appealing. These operators often promise anonymity and lucrative bonuses that regulated platforms cannot legally offer.

• Tax implications: The UK government risks losing up to GBP 335 million in tax revenues due to this black market surge.

Germany

With an anticipated CAGR of 5.00 percent, the market will grow to EUR 6.63 billion by 2029.

• Key restrictions: A EUR 1 stake limit per slot, a EUR 1,000 deposit cap, and advertising bans during specific hours hinder licensed operators.

Netherlands

iGaming revenue is projected to grow at 8 percent annually, but new tax rates rising from 30.5 percent to 37.8 percent by 2026 may push players toward unregulated platforms.

Asia-Pacific: Restrictive but evolving

India

India’s iGaming market, valued at EUR 2.48 billion in 2024, faces significant challenges due to its fragmented regulatory environment:

• State-level complexity: Each state enforces its own laws, making it difficult for operators to navigate. For example, Telangana and Tamil Nadu have banned real money gaming outright, while states like Goa permit limited forms of gambling.

• Taxation: High tax rates, including a 28 percent GST on player winnings, discourage players and operators.

• Black market growth: Prohibitive regulations have fuelled a surge in unregulated platforms. Many international operators exploit legal loopholes to target Indian players without accountability. These platforms often lack responsible gambling measures, posing risks to consumers.
• Opportunities: Proposed 100 percent FDI in the real-money gaming sector could attract foreign investment, but regulatory clarity is essential for sustained growth.

Japan

The market, valued at USD 7.7 billion in 2023, is projected to grow to USD 12.6 billion by 2032.

• Key issues: Offshore platforms dominate as online gambling remains illegal.

Philippines

Casino gambling is set to reach EUR 3.45 billion by 2033.

• Developments: The government banned Philippine Offshore Gaming Operators (POGOs) in 2024, citing criminal concerns.

Middle East: Emerging opportunities amid conservative challenges

United Arab Emirates (UAE)

The UAE’s gambling market is projected to generate EUR 7.82 billion annually, driven by rising tourism and gaming options such as lotteries and casino operations.

• Regulatory framework: The General Commercial Gaming Regulatory Authority (GCGRA) introduced licensing requirements covering responsible gambling, financial transparency, and local compliance.

• Developments: Wynn Resorts plans to open the region’s first major casino in Ras Al Khaimah by 2027.

• Challenges: Cultural conservatism rooted in Islamic principles may limit public acceptance of gambling, despite regulatory advances.

Africa: Growth amid regulatory hurdles

South Africa

South Africa’s iGaming market generated EUR 3.07 billion in 2024, with sports betting contributing EUR 1.87 billion (60.5 percent of revenue).

• Current status: Sports betting is regulated in most provinces, but traditional online casinos remain prohibited.

• Opportunities: The Democratic Alliance (DA), which gained influence after the ANC lost its majority in 2024, is pushing for the legalisation of online casinos through the Remote Gambling Bill.

• Challenges: Fragmented provincial regulations and a 15 percent VAT on betting transactions reduce profitability for operators.

Key takeaways

• Fragmentation drives black markets: Overly stringent or inconsistent regulations, as seen in the UK and India, push players toward unregulated platforms.

• Emerging markets offer growth: Countries like Brazil and India show immense potential but require regulatory clarity to thrive.

• Harmonisation is critical: A unified global approach could reduce operational costs and improve consumer protection.

The rise of black markets and regulatory complexities underscores the need for balanced, harmonised policies that protect players while fostering industry growth. Without such measures, the industry risks losing credibility, revenue, and consumer trust globally.

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