Regulatory
Grey Market
Definition
Operating in a jurisdiction where the legal framework is unclear or doesn't specifically address online gambling. Contrasted with black market (explicit prohibition) and white market (clear licensing).
Key takeaways
- A grey market is a jurisdiction where the law on online gambling is unclear, between licensed white markets and prohibited black markets.
- Grey-market revenue is a disclosure issue for listed operators, a diligence concern for payment partners and a heavily negotiated point in M&A.
- Grey markets are shrinking as countries choose licensing, as Brazil did in 2025, or prohibition, as India did for online money games in 2025.
Why it matters
Grey market activity is one of the central commercial and regulatory tensions in modern iGaming. Many operators have historically generated meaningful revenue from jurisdictions where the legal status of online gambling is genuinely ambiguous: no explicit prohibition, no licensing framework, no enforcement against incoming operators. For listed companies, grey market revenue is a disclosure and risk issue; for banking and payment counterparties, it's a diligence concern; for jurisdictions opening regulated frameworks, it's the starting point for designing market entry economics.
The grey market is shrinking as more jurisdictions introduce explicit licensing or prohibition. Brazil's 2024-2025 regulated launch converted the largest grey market in Latin America to a licensed one. India went the other way: the Promotion and Regulation of Online Gaming Act 2025, passed by Parliament in August 2025, prohibits online money games, whether of chance, skill or both, together with their advertising and payment processing. Listed operator disclosures around grey market exposure (typically described as "dot.com markets" in earnings) are scrutinised by investors and regulators. The treatment of grey market revenue in M&A diligence is one of the most negotiated topics in iGaming deals.
Sources
- Promotion and Regulation of Online Gaming Bill, 2025 (backgrounder, 21 August 2025) - Press Information Bureau, Government of India
Frequently asked questions
Is grey market activity legal?
Depends on the specific jurisdiction. Grey market by definition means the legal status is unclear. Operators argue that absence of prohibition means activity is permissible; some regulators argue that absence of licensing means activity is prohibited. Court rulings in specific jurisdictions can shift the categorisation over time.
Can listed operators serve grey markets?
Yes, with disclosure. Listed operators typically disclose grey-market revenue exposure and the trend has been toward reducing grey-market dependence as more markets formalise. Banking and payment relationships often impose limits on grey-market activity even when the operator's own licence framework permits it.