iGaming: What is Online Gambling, Trends, and Future Prospects

The iGaming history dates to the mid-1990s, when the expansion of internet access into homes and workplaces opened new opportunities for gambling. Western markets were among the first to embrace this shift, as nearly all traditional forms of gambling became available online. Today, with the rise of advanced platforms and technologies, players can access a wide range of gambling options anytime, anywhere.

The iGaming industry is a dynamic and multifaceted ecosystem comprising various stakeholders, including operators, platform providers, aggregators, payment service providers, and affiliates. The core iGaming types include online casinos, online sports betting, online slots, and online lotteries. Additionally, online card games (excluding poker, which is often classified as a casino product), and hybrid gambling formats have gained traction.

These hybrid formats incorporate elements of gamification, where outcomes are influenced by both chance and player engagement. Examples include fantasy sports betting, e-sports betting, skin betting, and loot boxes. The classification of these products within the iGaming sector remains a topic of ongoing debate, underscoring the industry's complexity and evolving nature.

A key factor in the growth of the iGaming market has been the introduction of flexible licensing frameworks. These offshore, multi-jurisdictional licenses empower operators to expand their activities globally, particularly in regions lacking local licensing systems.

Referred to as "gray" operations, flexible licenses are issued by jurisdictions that adopt a more lenient regulatory approach to gambling. Unlike countries with stringent regulations or outright bans, these jurisdictions allow operators to conduct business across multiple territories.

Many mature markets with a high Human Development Index (HDI) and advanced legal systems recognize the benefits of a balanced yet adaptable approach to gambling regulation. While larger nations often lag in updating their legislation, smaller jurisdictions—especially in the Caribbean and Asia—are quicker to respond to industry trends. This agility enables offshore platforms to offer a wider range of products, challenging national operators and regulatory bodies.

Most countries that regulate the online sector (and therefore acknowledge its existence through specific legislation) adopts local licensing procedures. This includes nearly all European nations, much of Latin America, Asia, Canada and the U.S. A smaller group of jurisdictions restricts all types of iGaming via state monopolies or tender-based licensing (as Scandinavian countries), and even smaller number of jurisdictions completely ban online operations (e.g., Chile, Cuba, Ecuador, the Cayman Islands, and many Arab countries).¹

It is important to note that accurately measuring the full iGaming market size is nearly impossible. This is due to the fact that some countries regulate gambling, others prohibit it, while some lack regulations or do not publish data openly. As a result, market size figures vary depending on the country and region.

While the regulated iGaming market can be roughly estimated due to large licensed operators being required to publish financial reports, pay taxes, and license fees, the offshore market remains shrouded in secrecy. Estimating the size of the offshore market is challenging; however, data from H2 Gambling Capital suggests that the offshore market accounts for approximately 13% of the total European online market.

The size of the black market can be inferred from data provided by regulators in licensed countries. For instance, in Germany, the black market generated between €400 million and €600 million in gross gaming revenue (GGR) in 2023, defined by the regulator as player losses, compared to the legal market’s €13.7 billion for the year. Of this, €3.0 billion was generated online.

In the UK, the regulator estimates that ~€3,2 billion is staked annually on the online black market, which is equivalent to 2.1% of the amount staked remotely with regulated operators. Of this amount, around ~€311 million comes from those who exclusively use black market operators, ~€514 million from those using social media and messaging platforms, and ~€2.3 billion from those who “multi-home” with both black market and UK-regulated operators.

Similarly, in Australia, the regulator reported that the total offshore wagering market in 2022 was ~€658 million. After excluding the grey market activity of ~€326 million GGR, this implies a black market wagering GGR of approximately ~€332 million. This suggests that the offshore market represents 15% of the total Australian online wagering market.

In the United States, the illegal market accounted for ~€38 billion in GGR in 2022, ~€37.5 billion in 2023, and ~€26.7 billion in the first six months of 2024. By this measure, the illegal market could reach ~€55 billion in GGR by the end of 2024.

While the online sector is regulated well and worldwide, it is important to understand the difference in types of regulations. Whereas white, locally licensed online operations can vary depending on the country, offshore market provides for an internationally recognizable license.

There are several mature and trust-worthy flexible licenses, which are known and secured worldwide:

Known for its quick approval process and affordability, Curaçao has one of the oldest e-Gambling regulations, dating back to 1993. Curaçao licenses were among the most popular, with approximately 20,000 betting websites operating under its license in 2023. However, its regulatory framework is currently changing and becomes more challenging.

While the old master license system is gone, the new framework offers clearer licensing categories, a stronger regulatory body, and more credibility for operators. This change is making Curacao’s gambling license more appealing for businesses looking for a trustworthy and globally accepted legal framework. New rules can further increase player trust and improve the stability of Curacao-licensed casinos, making them more attractive in a competitive market. While costs have risen, the benefits outweigh the challenges: operators now get better protection, easier rule following, and access to a prosperous crypto-friendly gambling ecosystem.

A European Union member, Malta was the first EU country to regulate online gambling. Known for its stricter oversight compared to Curaçao, Malta remains a leading hub for online gaming.

Recent legislation in 2023 further strengthened its position by protecting Maltese license holders from legal actions that conflict with local gambling services. Though it has its challenges: strict regulations, detailed audits, and high costs. But the rewards make it worthwhile. Holding this license signals credibility, access to global markets, and easier partnerships with banks, game providers, and payment systems. According to research, Malta’s iGaming industry can reach ~US$ 361.20 million in 2025, driven by such trends as mobile gaming, crypto casino payments, and personalized player experiences. The Malta gaming license gives operators a strong competitive edge, offering trustworthy regulations and recognition across Europe.

A smaller but increasingly popular jurisdiction, Anjouan offers quick and affordable licenses. This jurisdiction is also seen as an alternative to Curaçao for start-ups seeking global reach.

Anjouan is a budget-friendly and flexible alternative. This small but emerging licensing jurisdiction is gaining traction for its quick approvals, low fees, and tax-free benefits. It’s not yet a dominant force in the gaming industry, but Anjouan’s B2B and B2C licenses offer global reach, which makes it an attractive option for operators looking to scale. Anjouan’s online gaming license provides a simplified entry into the market without excessive bureaucracy. With 0% tax on gaming revenue, fast processing times, and crypto-friendly regulations, it’s becoming a strong competitor to traditional licenses.

To the date, the primary challenge of iGaming market is the difference between local and flexible licensing. Flexible gambling licenses remain pivotal in the iGaming industry, enabling operators to access multiple markets while bypassing strict national regulations. However, governments in tightly regulated jurisdictions increasingly perceive offshore licenses as a threat, implementing domain blocks, financial restrictions, and legal measures to curb their influence. The reason of such strict approach includes lost tax revenue, insufficient consumer protection, and regulatory evasion. Players face unregulated environments with no payout guarantees or responsible gambling policies, while the absence of AML/KYC compliance raises the risk of money laundering.

Nevertheless, flexible licenses continue to drive industry growth by offering accessibility and innovation. Offshore jurisdictions that actively reform their regulations to enhance credibility, player security, and compliance with international standards will retain their relevance. Those that fail to adapt will face stricter international restrictions.

The evolving nature of flexible licensing aligns with the increasing regulation of new forms of gambling with gamification tools. There is no global consensus on whether hybrid forms of gambling require regulation. The market for skin betting, loot boxes, fantasy sports, and other types of hybrid gambling is growing, attracting an increasing number of players worldwide. The mechanics of such games share similarities with traditional online gambling, leading more countries to interpret the unregulated aspects of these emerging verticals in their own way. As example, countries like the Netherlands and Germany already classify skin betting and loot boxes as gambling when winnings can be converted to real money, while for example China enforces a complete ban.

We anticipate the market of hybrid gambling to evolve rapidly and became regulated as another form of iGaming. The current trend toward localized regulation will concern all online verticals as well, since many operators now prefer to obtain national licenses to ensure compliance and market access. Offshore flexible licenses are evolving, adapting to global regulatory trends and industry demands. Despite ongoing debates and regulatory hurdles, the future of iGaming continues to thrive, presenting diverse opportunities for both operators and players. As more countries embrace this global trend, the market is set for further growth, making it a critical area for future development and investment.

In the coming years, we expect continued growth in local licensing regimes, driving further legalization and regulation of gambling worldwide.