According to new research, Danish gamblers who intentionally play on unlicensed sites seek higher bonuses, bigger payouts, and more games. The findings highlight the importance of gambling regulations that foster a competitive industry. “Channelization”—or ensuring players choose regulated sites over unregulated ones—is a hot topic in European markets, but one that US regulators haven’t yet given enough attention.
The study, Online Gambling in Denmark: Survey of Danes’ gambling habits on websites with and without a gambling license, interrogated Danes’ online gambling habits.
The Danish Gambling Authority (DGA)—also known as Spillemyndigheden—and Statistics Denmark collaborated on the study. It is the first research out of Denmark to look specifically at unlicensed gambling sites.
Good news for the DGA: most residents who gambled online (87.6%) chose regulated sites, citing their credibility, control, and supervision. Participants also noted the importance of being able to play in Danish on sanctioned sites.
However, when players chose unlicensed sites, it was primarily added game options, higher payouts, and better bonuses that beckoned.
Spillemyndigheden highlighted those drivers in a Jan. 16 release summarizing the findings:
More than half of the players who have gambled on unlicensed sites in the past year have done so deliberately. When asked why they have done so, they mention that the sites provide other types of games as well as higher refund and bonuses.
Study Examines Drivers of Unlicensed Gambling
European regulators have long been concerned with channelization. In the younger US market, the American Gaming Association (AGA) has stressed its importance, but there hasn’t been as much fuss about it from policymakers. At least not yet.
The AGA advocates for a two-pronged strategy. Obviously, cracking down on illegal gambling is one component of that. But, since new offshore sites will keep popping up, if regulators anywhere want players to choose the safer legal option, they must ensure policies allow a competitive gambling product. For that reason, the AGA opposes policies—like the federal sports betting excise tax—it feels impede operators from being competitive.
Denmark liberalized its online casino and sports betting market in 2012, allowing anyone to apply for a license.
Pre-liberalization, online gambling still occurred, but it mainly took place on illegal gambling websites. With commercial regulation, Denmark aimed to transition that spending to licensed sites with more player protections.
While largely successful, some unlicensed providers still target the Danish public. As a result, some Danes end up gambling on unsanctioned sites, whether they realize it or not.
Understanding what draws them, said researchers, is critical to understanding the gambling market.
As noted, the online survey showed most Danes aged 15 and up gambled with licensed providers.
Most gambling takes place on websites with license to offer gambling in Denmark. These are sites which the Danish Gambling Authority supervises and which must follow the Danish legislation.
The study considered a pool of 30,070 individuals, receiving a response rate of 25.2%. Researchers discovered that 21.7% had gambled online during the previous year, implying over 1 million gamblers in the total Danish population. They collected the study data between Nov. 24, 2022, and Jan. 15, 3023.
Players Knowingly Gambled on Illegal Sites
When it comes to gambling on unlicensed sites, a few findings stand out.
Of the Danes who gambled online, 3.8-4.5% (41,000+) played on unlicensed platforms. More than half of those did so knowingly. However, 8.6% were unaware of whether the sites they used were licensed.
Noted previously, of those who knowingly played on unlicensed sites, 37% did so for access to activities unavailable on regulated sites. At the same time, for 32%, better-perceived odds and higher winnings were the draw, while 26% cited better bonuses.
Further, 19% of players were there for different payment options, like cryptocurrency.
When used, players turned to unlicensed sites primarily for online casinos, sports betting, and skin betting.
Alarmingly, despite a legal age limit of 18 to gamble, 15.2% of participants between 15-17 reported gambling online in the past year.
Researchers hypothesized this gambling happened on unlicensed sites with less stringent age requirements. They also floated the possibility that the younger teens used an account belonging to family or friends.
But, according to the study, 21% of participants who used unlicensed sites noted age restrictions as the reason, while 17% desired anonymity.
Also troubling, 23% of players who used illegal platforms did so after self-excluding from regulated sites.
When questioned about how they came across the unregulated platforms, 68.2% used the internet. However, 66.3% found the sites through YouTube, TikTok, and Snapchat content. Unsurprisingly, nearly half of unregulated users were also under 30.
Notably, for the first time, Spillemyndigheden fined an unnamed Twitch streamer over unlawful gambling advertising last summer.