The Price of Losing Control: why channelisation matters in gambling regulation

Black-market gambling is ultimately a test of regulatory effectiveness. Where legal products are unavailable, overly restrictive or uncompetitive, some consumers will migrate to illegal supply beyond the reach of consumer protection, AML controls and regulatory oversight.

The Price of Losing Control, prepared by Vanguard Overwatch for Entain Australia & New Zealand, examines this challenge through the lens of channelisation: the extent to which consumers remain within the regulated market.

Drawing on evidence from Australia, New Zealand, Great Britain, Sweden, Belgium, Finland and Japan, the paper considers the role of product restrictions, advertising, payments, affiliates, digital platforms and enforcement in shaping black-market growth.

It also draws on Australia’s illicit tobacco experience as a warning of how difficult it can be to recover regulatory control once an illegal market becomes entrenched.

The paper concludes with seven practical recommendations for governments and regulators, including better measurement of black-market activity, stronger action on payments and cryptocurrency, greater accountability across the commercial ecosystem, and regular review of whether existing regulatory settings are supporting or undermining channelisation.