What the Gambling Industry Really Sells: How to Beat the Black Market

The “Black Market” Buzzword No Longer Impresses

The gambling industry’s approach to discussions with regulators, lawmakers, or publicly touting its strengths has largely boiled down to a straw man fallacy. Almost every argument from the legal market in debates about regulation comes down to claiming that proposed changes, unfavorable to operators, will benefit the black market. Black market, offshore operators – these are buzzwords meant to spark lawmakers’ imaginations, deterring them from bad ideas or nudging them toward better ones.

In reality, these arguments often held water, and scaring people with the black market frequently passed the test in defending legal operators’ interests. But there were also plenty of moments when the industry’s alarmist cries about offshore operators flooding the market were a bit overblown, lazily tossed on the table as an ace to shut down any talk of change. So it’s no shock that we’re slowly reaching a point where, like the boy who cried wolf, when the wolf actually shows up, nobody will rush to help the industry.

Operators’ fears of offshore influence are, of course, valid, and fighting the black market feels more like chopping heads off a Curaçao-based hydra. The legal market obviously needs care to protect the interests and tax revenues of the country that legalized it on specific terms. In an ideal world, lawmakers and regulators would stand arm-in-arm with the legal industry against the black market. But we know damn well that’s not how it works.

Licensed entities fall victim to restrictions far harsher than their unregulated counterparts. The simple reason? Imposing a fine on legal firms is way easier because the regulator knows exactly which door to knock on and where to find it.

Given this risk, the communication from licensed firms needs to hit the bullseye and focus on what matters most. Pulling out the scary, terrifying black market bogeyman is starting to lose its punch. Regulators have seen it enough to think it looks spooky, but can’t quite see how it could actually attack them.

Let’s Play with Open Cards

Time to play with open cards, but it’ll definitely take more effort. A key step seems to be agreement within the industry itself, which has a knack for digging pits under each other. Land-based casinos fight online ones, and national monopolists square off against an open, regulated market. The whole message gets muddied this way.

Sure, it’s pointed out that the state budget loses out on black market activity, but this gets tangled up with numbers showing financial losses from cannibalization between online and brick-and-mortar casinos and comparisons of tax revenues from state monopolies versus open markets. This blurs the hardest-hitting argument. The financial one.

For lawmakers, who often don’t have the gambling industry high on their priority list and would rather steer a mile clear of any changes favoring legal bookmakers or online casinos, this turns into a skirmish between sides with clashing interests, all fighting for profits. Each claims that protecting their interests is somehow best for the state treasury.

So maybe it’s not all that surprising that public discourse sometimes spawns proposals, occasionally reaching the form of bills, that are outright irrational and populist, like those calling for a total gambling ban.

Let’s be real. The gambling industry, by its nature, which carries addiction risks, is a headache for lawmakers and regulators, and it’s hard to kid ourselves that it’ll stop being one. Trying to dodge the “gambling” label or rank it from most to least “friendly” isn’t the way to go.

The way forward is playing with open cards and mastering clear, consistent communication of the legal, regulated market’s edge over the black market alternative. After all, the debate isn’t about whether gambling should exist or not. It’s about whether the state wants any oversight over it. The legal gambling industry can deliver that oversight.

How to Beat the Black Market?

For the message to be consistent, the legal market should differentiate itself from the black market in every way possible. In the long run, it definitely doesn’t help when providers supply products to both legal and illegal casinos, or operators function in both regulated and unregulated markets. This blurs the differences that are supposed to stand out.

In the end, as we said at the start, the legal industry can’t position itself as superior to the black market in terms of product. Truth be told, offshore operators can often offer players more since they don’t have to worry about regulations or bear tax costs.

What most sets the legal industry apart from the only black market alternative is safety, and that difference should be bluntly communicated and highlighted at every turn. It’s in this aspect that legal operators should widen their lead over offshore rivals. These kinds of arguments should reach not just lawmakers but players too.

We need to say: yes, we operate in the gambling industry, but we do it in a regulated way, in line with the country’s laws. Our key argument and the crux of our edge over offshore operators lies in this: we provide players with responsible gaming tools, run educational efforts, launch social campaigns to combat addiction, guarantee fast, safe, and hassle-free withdrawals at any time, and never target our products at minors. That’s it, and that’s everything. The message should be precise and not diluted by other arguments.

We’d love not to have to add this, but it needs to ring loud and clear. Responsible gaming and safety can’t become more buzzwords thrown around in communication to check a box. Words must be backed by concrete actions so every operator can point to a slew of examples from their own work to support each of these claims. It should be in the industry’s interest to embrace a kind of self-regulation. Public opinion about the gambling industry is a painstakingly built house of cards. One slip, and the whole thing comes crashing down.