The Product gap – and how to close it.

The scale of the problem

In 2024, illegal operators captured 71% of Europe’s online betting and casino market: €80.65 billion in gross gaming revenue, according to Yield Sec’s research for the European Casino Association. The unregulated market is now more than double the size of the legal one, which generated €33.6 billion over the same period.

The picture is more acute the further east you look: illegal operators control 82% of online gambling revenue. In Western Europe the figure is 72%. Yield Sec identifies more than 6,200 illegal operators targeting European consumers and estimates that 81 million Europeans engaged with illegal services in 2024. The tax cost to EU member states is roughly €20 billion a year.

The industry is responding; payment blocking, DNS blocking, advertising bans and enforced exits are working in markets that deploy them with conviction. But enforcement alone will not close this gap. Our question is the operator-side answer: what regulated operators can do, inside the rules they already operate under, to keep more customers in the regulated market.

Enforcement is necessary, but not sufficient

The clearest case study is Norway. Through payment blocking, DNS blocking, advertising restrictions and enforced exits, the Norwegian regulator drove illegal-market revenue down 18% in 2024, while the player base grew 11%. Enforcement works, and it works at scale.

The product gap, however, is real. The Nordic lottery’s head of responsible gaming has put it bluntly: “It doesn’t help if you have the best responsible gaming framework or measures in the world if no one wants to play with you” (The World from PRX, September 2025). Norwegians continue to defect to international operators because the regulated product still trails on some dimensions. Enforcement creates the space; product must fill it.

The real channelization lever

Players do not think in terms of regulated versus unregulated. They play where the product feels best, and they think in terms of four things: product, pricing, speed, rewards. “Regulated” is a word that exists in our heads as an industry, not in theirs.

If we want to keep customers, we have to build a product they want to stay in. Two of those concerns, pricing and rewards, are shaped by tax and regulatory cost structures operators do not entirely control. The other two, product and speed, are within our gift. They are also where the most ground has been ceded. We organise our thinking into four pillars.

Pillar one: Frictionless experience

Most customers do not leave a regulated operator at the bet slip; they leave during onboarding, before they have ever placed a bet. Verification is non-negotiable. KYC, affordability and source-of-funds checks are legal obligations and the right ones. But the experience around verification is almost entirely within our remit, and for many operators, it still feels like a compliance audit rather than the start of a relationship.

The levers are well understood: risk-based verification where the regulator permits; modern ID via eID, open banking and biometric liveness rather than passport-photo uploads; in-app explainability rather than silence; and disciplined test-and-measure on every form field. At Bally’s Intralot we believe onboarding is where the biggest under-served conversion gains still live. In our own product work, changes to form-field structure alone, without touching KYC, have moved onboarding conversion by 20%.

Once a verified customer is in the app, bet placement, settlement latency and withdrawal speed are the next battlegrounds. The best unregulated operators settle bets in seconds and withdraw in minutes. “One to three working days” for a regulated withdrawal is, in 2026, an operational choice, not a compliance requirement.

Pillar two: Sports experience

When players defect, two answers come up: “more choice” and “more excitement.” Both map directly to product features regulated operators can build inside the rules.

“More choice” is market breadth: long-tail leagues, esports as a first-class category, niche sports, broader market lists per event. Regulated operators often hold the superior official data partnerships, the opportunity is to sweat those assets and deliver depth and personalisation pure offshore cannot.

“More excitement” is in-play depth and bet construction. Live betting cannot feel like an after-hours mode. Bet builders and same-game multis cannot be buried three taps deep. Cash-out, partial cash-out and edit-bet should feel like a live trading terminal, not an afterthought.

Players’ expectations are set not by other sportsbooks but by Duolingo, Uber, Spotify and Netflix. The regulated sportsbook that feels closer to those products than to a 2015 bookmaker is the one that holds the customer.

Pillar three: The broader ecosystem

In isolation, the sportsbook is a commodity. The odds compile, market list and screen layout are broadly the same across operators. Retention lives in the ecosystem around it and this is where lottery operators have structural advantages no offshore operator can replicate.

Most sit on the most valuable sports-betting acquisition channel in their market: millions of verified, trusted customers with consent and a relationship already in place. They have thousands of physical retail points creating continuity between coupon, phone and television. They have years of cross-product behavioural data. And they fund hospitals, sport, the arts and education, a social-purpose signal offshore cannot manufacture. “You played with us, and here’s what we built with the proceeds” is a depth of loyalty no cashback mechanic touches.

Pillar four: Trust as a feature

This is the one thing regulated operators can offer that unregulated operators cannot and the one many of us still apologise for instead of selling. Responsible gambling tools too often sit in silo’d sections of the product or tucked away in the footer. Used well, they are a quality signal to regulators, partners and customers.

A deposit cap should feel like a personal goal. A reality check should read as attentiveness. Transparency about restricted markets builds trust; silence breeds suspicion. And the persistence promise no offshore operator can credibly make; “we will be here tomorrow, our licence is audited, our obligations to you outlast any campaign”, is one of the regulated sector’s strongest commercial assets, if we choose to sell it.

A dual approach

The product playbook above is available to any regulated operator that chooses to invest in it. At Bally’s Intralot we work with operators across Europe on exactly this playbook, and our view borne out by that work, is that product alone will not close the gap. Closing it takes operators and regulators pulling different levers at once.

Enforcement is the regulator's lever, and Norway has demonstrated it works at scale. Product is the operator's lever, and it remains under-pulled across most regulated jurisdictions. Neither, on its own, closes the €80 billion gap. Together, they can make a real impact.

At Bally’s Intralot we believe the regulated market does not have to be the inferior choice. It can be the best choice, but only if we build it that way.