What do industry experts consider the biggest issues affecting sports betting in Europe?

LiveScore's CEO , kwiff's CEO and an iGaming consultant explore the issues hindering growth in European sports betting today.

Globally, sports betting is one of the most exciting products right now, with fans across the world engaging in gambling on football, tennis, golf and more. But in Europe, the industry’s spiritual home, regulated operators are being squeezed out with pressure coming from several different directions.

As taxation and advertising curbs combine to reduce margins for legitimate operators in Europe, the black market is growing in popularity.

The Netherlands is a great example, with a tax increase announced in 2024 and coming into effect the following year. Since then, onshore sports betting GGR has dropped significantly, while offshore GGR continues a steady rise.

So how can operators continue to grow, with techniques that made player acquisition simple in years gone by, such as large welcome bonuses and prominent advertising, no longer easy to come by?

The tax trap The current trend of governments across Europe raising gambling taxes to plug fiscal budgetary holes is wreaking havoc on the gambling industry. These policy makers remain largely unaware of the economic reality that users are pivoting to offshore operators.

iGaming consultant Henk Wolff, who has over a decade of industry experience since starting out in marketing with Belgium-based operator Blitz, insists governments see this as an easy solution. “But,” he says, “if you put the tax above the 30% threshold, you see a lot of black-market activity in that country because these operators can no longer compete.”

“The more countries try to over-profit and overdo taxes on iGaming, it’s where they’re going to lose. A good example of this will be the UK. We’ve already got this in Belgium, where the black market is pretty much dominating, and we’re seeing in the Netherlands, more than half of players are going to black market casinos.

“I understand why countries do it, but there’s a certain limit that you can push it to because of the market. We’re not like tobacco, we’re not like other entertainment products, we’re not like alcohol.

“If you over-regulate, if you increase taxes too high – there are so many studies out there. It just pushes players towards the black market and I think that’s scary. More money seems fun [to a government] but there’s a limit to what an operator can take.”

The Dutch market once looked promising for the regulated online gambling sector. But a rise in tax from 30.5 to 34.2% in 2025, followed by a further increase to 37.8% this year, changed that. LiveScore Bet, overseen by CEO Sam Sadi, had launched there in October 2021, but were forced to withdraw from that market in November 2024.

Sadi picks up the tale. “We were one of the first six licensees in the Netherlands when the market decided to regulate. We thought that would be a good opportunity, we have a million users on the LiveScore app there.

“So we said, ‘OK, great place to export this business model’, which had already been proven to work in the UK. But a year after, incredibly tight regulations came in with strict regulations around reporting, and then an increase in taxes, which effectively brought them close to 50% effective, because they calculate on GGR,” he explains.

“It would have taken maybe 10 years to turn profitable. We need to make sure that we can invest in ventures that have quicker returns on capital, so we had to exit that market.”

A year and a half after exiting the market, Sadi reflects on how it took just a year to realise how challenging it would be. He says: “The market developed the way we anticipated. Channelisation initially was around 80-90% but now it’s down to around 60%. All the top player segments and high-value customers are offshore now.

“That’s a general threat to the industry all across Europe, but especially in heavily taxed markets like the Netherlands.”

An easy decision Asked by iGB about how hard a decision it was to pull out of an initially promising market, Sadi replies: “It was one of the easiest decisions as a company, and personally.

“I embrace making decisions on maths. It’s very formulaic. So the decision was made the moment it happened.

“We know how to forecast. Our business is very predictable, and the amount of capital we have is finite. So, we have to make those decisions that if they increase tax rates to a certain point, your margin goes to a certain level. You do the maths, and then decide whether that’s the best way to invest your capital.”

Henk Wolff, who hails from the Netherlands, adds: “The Dutch market is becoming more and more difficult. They’re creating a higher barrier to entry. I think they have put themselves in a weird labyrinth and I wouldn’t recommend an operator to start there.

“It is in a silly position and with a marketing ban coming up – it’s in a tough pickle. Until that uncertainty has cleared up and they realise what they’ve done with the extremely high taxes, I wouldn’t go there.”

Wolff sums it up nicely when asked which European markets he’d avoid if launching a sportsbook this year. He quips: “The Dutch market has been squeezed like a lemon and I don’t think there’s much juice left there. I’d avoid that one like the plague.”

An ideological signal for the sector to fail The UK is a prime example of incoming tax increases placing immense pressure on the sector and its already strained profit margins. Remote gaming duty on 1 April was increased to 40% in the UK following November’s budget announcement. LiveScore Group CEO Sam Sadi, an industry veteran who founded his first sportsbook in 1999, believes the move sends an extremely negative message to the sector in terms of future regulation and the industry’s survival.

He insists: “A 40% tax increase tells the industry, ‘We have no interest in regulating you in a way you will continue to succeed’. It’s a way of saying, ‘We want that industry to shrink and we don’t mind that the consumer is no longer protected, and they go play in offshore operators’.”

“It is just an ideological signal that we don’t want strong online gambling companies that are leaders in that space in the world, which the UK has always been until just a few years ago.

“If you look at Flutter, that’s not a UK business anymore. It’s more of an American business. It’s a shame, really. I feel very hurt by these decisions, because we believed in the liberal economic philosophies of this country.

“The only thing we can do now is understand the environment we operate in. These are the margins we have, and we’re going to be operating with a handicap because offshore operators operate at 90% margin, whereas we have a 30-35% margin.”

A cautionary tale The original case of over-regulation in Europe is that of Sweden. Charles Lee, CEO of kwiff, the UK-based sportsbook known for its innovative ‘supercharged odds’ mechanic, sees it as a cautionary tale for other markets. Lee explains: “Sweden introduced around 22% tax [in July 2024] and everyone went ‘Bloody hell, why would you operate there?’

“They had a big growth spurt in the black market, so channelisation went way down. It reduced constantly, because you can’t really stop the illegal market from entering the territory.

“You could deny it’s there, which the Gambling Commission in the UK did for a number of years, until suddenly, they’re closing down hundreds of thousands of URLs. Well, if there was no black market, why are they having to close so many URLs down?”

The advertising paradox Taxation aside, advertising restrictions are also rife across Europe, further stagnating sportsbook growth. In Italy, there’s a blanket ban on printed ads and no broadcast ads are permitted between 6am and 11pm, and in Belgium, general public advertising is prohibited. This summer, a front-of-shirt sponsorship ban for gambling operators comes into force in the UK Premier League. This was a voluntary response from England’s flagship sports competition in the face of anti-gambling pressure.

For Sadi, there’s an element of hypocrisy here. “What have you exactly banned? Asian operators targeting their markets through international Premier League broadcasts?” he questions.

“Around 90% of those sponsors were foreign, and probably 90% of those are unregulated operators who have no other mass media access to their markets except going through the Premier League.

“There are not many industries that can deliver returns on a sports audience like sports betting does. It’s a direct engagement on the sports itself. Sure, everybody who watches sport may use Gillette, but it’s not [linked to] sports directly.”

Finding workarounds Lee also questions how much of a difference it’s going to make. In fact, kwiff sponsors the lower back position on the shirts of Scottish football club Motherwell. He says: “We get approached by quite a few clubs in the Championship and Premier League, but I don’t think I’ve ever seen so many different positions to advertise on a shirt that isn’t the front. Suddenly you’ve got the shoulder, the back, the lower top back…”

Sadi thinks there are bigger issues to address around restricting who sees advertising, which could be helped by age gating – something he says is easily implemented. “You need to restrict exposure for untargeted audiences and on digital platforms, you have all the means to understand who the audience is,” he explains.

“On [LiveScore‘s media platform – news and scores app], we only show betting advertising to 18 plus customers, as one of the only sports apps that makes it mandatory to declare your age. So there are things that can be done.

“My main concern is, let’s make a little bit of extra effort to stop every other reel on Instagram being ads about offshore bookmakers. Or Google displaying non-GAMSTOP casino ads on their front page next to my brand.

“If that is done, it levels the playing field a little bit, but let’s see. We’re still hopeful. The UKGC has an extra budget to fight illegal operators, and we’d like to see more of that.”

The black market beneficiary This combination of high tax rates and advertising restrictions is undoubtedly creating a structural advantage across Europe for the illegal market. Sadi provides the relevant case study of Turkey. He says the offshore markets went from about $500 million to $2 billion a year, and the onshore market is about a billion. “Turkey banned online gambling in 2007, then regulated sports betting only, the year after,” the LiveScore Group CEO laments.

“Last I checked, the onshore market feeds the offshore market, because the onshore market is sponsoring everything and educating people about sports betting.

“It creates that market, but it’s an uncompetitive product due to high taxes. So [bettors] start there and then realise they can access an offshore operator that gives incomparably better service and odds, plus they have casino, poker, every other vertical you can imagine. So they create the market, and then offshore operators benefit from it.”

Sadi expects 25-30% of the UK market to be offshore within the next two years, based on the trajectory of other countries. He says the Netherlands has lost around 30% to illegal operators since regulating, while Germany has lost around 80% already.

“Germany has proven what happens if you increase taxes even further or introduce limits or requirements for casino games like lower RTPs. The market is offshore.”

‘They can’t stop the black market advertising‘ Lee describes the illegal markets in Germany and the Netherlands as “booming”. He believes once the black market opens up, it’s hard to control because offshore operators are “savvier” than governments when accessing players.

The kwiff CEO gives some great anecdotal evidence, recounting: “They currently advertise on UK Premier League football shows. There are gambling operators without licenses doing that today, advertising on billboards around stadiums.

“I was at Crystal Palace vs Chelsea recently. A Chinese gambling operator that doesn’t have a UK licence was advertising on a billboard in the stadium.