European gambling markets are entering a period of increased regulatory scrutiny, driven by laudable efforts to reduce gambling-related harm. However, stricter regulatory frameworks do not always produce the results policymakers hope for. When legal operators face heavy restrictions, offshore sites can become more attractive by comparison, exposing players to less protected environments.
The UK, Denmark, and Norway each represent a different position on this regulatory spectrum, offering concrete examples of how rules influence behavior.
Why channelisation matters
Channelisation refers to the extent to which licensed operators are favoured over unlicensed ones. It is something that has become a key indicator for assessing the effectiveness of regulation. A well-designed market encourages players to remain within the regulated system because it guarantees reliability, clear consumer protection and predictable oversight.
However, as restrictions accumulate, legal offerings can become less attractive, prompting some players to turn to offshore platforms that operate without the same obligations. These environments generally lack formal safeguards, making it difficult for authorities to monitor behaviour or intervene in the event of increased risks.
Norway: A strict model with limitations
Norway operates one of the most controlled gambling environments in Europe, based on a state monopoly and reinforced by strict advertising regulations, payment blocking and regular domain name interventions. Recent figures indicate a decline in offshore revenue, suggesting that these measures have helped to steer players towards the domestic offering.
However, unlicensed gambling remains significant in segments considered to be most at risk, particularly online casino games, where a significant proportion of activity still takes place outside the regulated market.
Sondre Kleven, expert in the iGaming industry, points out, “Norway shows that even the strictest restrictions do not eliminate demand. Some players simply turn to platforms where no protection is in place”.
At the same time, the growing popularity among young adults of high-risk games offered by the monopoly raises questions about product design and accessibility. Regulatory authorities also struggle to assess the true scale of the black market, as technical issues and reporting gaps limit the visibility of offshore activities.
Signals from Norway for wider European policy
The Norwegian experience offers a lesson for other European markets that are tightening their regulations. It shows how measures that appear beneficial on paper can have unintended behavioural effects when stakeholders perceive the regulated offering as too restrictive.
As Sondre Kleven points out: “When regulation focuses solely on limits rather than experience, players feel constrained rather than protected”, reflecting a sentiment that is increasingly influencing public debate.
Law enforcement agencies also face practical obstacles, ranging from incomplete data transmission to circumvention tactics. Sometimes political pressure accelerates regulatory changes before their consequences can be properly assessed. This influences how stakeholders perceive risks, which can lead to the introduction of stricter controls despite uncertainties about their long-term impact.
Denmark: From a balanced model to tighter rules
Denmark has long been considered one of Europe’s most stable gambling markets, often cited as an example of how clear licensing rules and moderate taxation can maintain a high level of sector regulation. This balance has begun to change following recent tax increases and the introduction of Spilpakke 1, a set of reforms that redefines how operators are allowed to interact with consumers.
Marketing restrictions are a key element of the package of measures, including a ban on television advertising during football broadcasts and new limits that significantly reduce the importance of affiliate revenue. Restrictions on bonuses and acquisition channels further narrow the gap between regulated and unregulated spheres, as offshore operators are not subject to similar obligations.
These measures aim to address concerns about media exposure, yet they also reduce the visibility of licensed operators at times when competition for attention is at its highest. For businesses, questions are inevitably raised about how to maintain competitiveness in a regulatory environment that increasingly restricts visibility.
For policymakers, it illustrates the delicate balance between controlling communication and preserving a healthy, channelled market. Industry observers have warned that channelisation is already weakening, pointing to early signs that players are looking at alternatives when legal brands become harder to distinguish.
The UK: High channelisation under pressure
The UK is one of Europe’s best channelled gambling markets, thanks to a well-established licensing system and a regulatory body with broad powers of control. However, as in Denmark, the system is now being challenged by a series of regulatory measures that are redefining the relationship between operators and their customers.
Affordability checks, new stake limits for online casinos and the prospect of a significant increase in taxes on online gambling are creating a more restrictive climate than many companies have faced to date.
Although these rules are intended to strengthen protection, early signs indicate that some high-rollers or privacy-conscious players are beginning to turn to unlicensed sites that do not impose the same requirements. This phenomenon is still limited, but it highlights the tension between rigorous control and the commercial conditions necessary for licensed operators to remain competitive.
Faced with rising compliance costs and shrinking operating margins, there are concerns that the UK may experience a gradual erosion of channelling, similar to the trends currently observed in Denmark. The question is how much regulatory pressure the market can absorb before players begin to disengage from the licensed system.
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