Four states a market can be in
Before anything else, you need vocabulary for what kind of market you are looking at, because the same country can be described four different ways by four different people with an interest in the answer.
Regulated and open. A licensing framework exists, it is open to applicants, and a licensed operator can lawfully offer and advertise its products to residents. The number of licences may be unlimited or capped, and the framework may cover all verticals or only some.
Regulated and closed. A framework exists but access is restricted: a state monopoly, a fixed number of concessions awarded by tender, or a requirement to partner with a domestic entity. The market may be very large and entirely unavailable to a new entrant except through acquisition or partnership.
Prohibited. Offering gambling to residents is unlawful. Enforcement varies enormously, from active domain blocking, payment blocking and prosecution to a statute nobody has enforced in a decade. Prohibition with weak enforcement is where the largest grey markets sit.
Unregulated. No framework addresses online gambling at all, usually because the law predates it. Nothing explicitly permits it and nothing explicitly forbids it, and the position frequently depends on how a general gaming statute is read.
The fourth category is where careless language causes real damage. "Unregulated" and "grey" are used interchangeably in industry conversation and they are not the same thing, which matters because banks, payment providers, listed-company auditors and acquirers all ask the question and expect a precise answer.
Grey markets, and the honest version of the argument
A grey market is one where an operator licensed elsewhere accepts customers from a jurisdiction that has not licensed it, on the basis that the activity is not clearly prohibited, or that prohibition targets the customer rather than the operator, or that the operator's own licence permits it.
The case made for it is that the customer chose to play, that the operator applies its home licence's protections, and that the alternative for that customer is an operator with no protections at all. Some of that is true.
The case against is that the operator has no legal footing if the position changes, has no recourse if payments are blocked, and is exposed to enforcement if the jurisdiction later decides to act on its past activity. The regulatory direction of travel over the last decade has been consistently against grey activity, and a national regulator can treat an applicant's history of unlicensed supply as a suitability question in its own right. The Netherlands is the clearest example: since 1 April 2022 the Kansspelautoriteit weighs illegal online gambling offered to Dutch residents more heavily when it assesses a licence application, and takes into account at least all such offering in the previous eight years.
That last point is the one that matters commercially and the one most often missed. Grey revenue today can disqualify you from a licence tomorrow, in a market you have not yet decided to enter, and the assessment can look back years. The strategic question is not only whether grey activity is lawful now, but whether it forecloses the markets you will want in three years.
Listed operators face an additional constraint. Investors and analysts track how much revenue comes from markets where the operator holds a local licence, and some listed operators report the figure in their interim reports. Betsson, for example, reported that 76% of its revenue in the second quarter of 2026 came from locally regulated markets, up from 66% a year earlier, and named the higher gaming taxes that follow as a key reason for lower profitability. A company's grey exposure is therefore priced, whether or not it is enforced against.
Channelisation: the number the whole debate turns on
Channelisation is the share of total gambling activity in a jurisdiction that takes place with licensed operators. It is the single most useful measure of whether a regulatory framework is working, and it is the number every serious market entry analysis has to engage with. Sweden's government defined it, ahead of the 2019 re-regulation, as the share of total turnover on the competitive part of the market that takes place with Swedish-licensed operators, and Spelinspektionen estimated it at 84% for 2025: 96% for betting but 81% for online casino.
The logic is straightforward and the consequences are not. A framework exists to deliver consumer protection, tax revenue and crime prevention, and all three are delivered only over the licensed share. A jurisdiction with excellent rules and 50% channelisation is protecting half its market, taxing half its market, and leaving the rest to operators with no obligations at all.
Channelisation responds to a small number of levers, and understanding them tells you how a market will behave after entry.
Tax rate. Above a certain level, licensed operators cannot offer prices competitive with unlicensed ones, and customers move. Where that level sits depends on the vertical and the margin structure.
Product restrictions. Limits on stakes, bonuses, live betting, product types or deposit levels each create a gap between the licensed and unlicensed offer. Individually reasonable restrictions can compound into a licensed product that a serious customer will not use.
Marketing restrictions. If licensed operators cannot advertise, customers cannot easily tell which sites are licensed, and the informational advantage of being licensed disappears.
Friction. Verification, affordability checks and deposit limits are protections, and each one is also a reason a determined customer looks elsewhere. This is the genuine tension at the centre of gambling policy and it does not have a clean answer. In Spelinspektionen's 2025 player survey, the main reasons Swedes gave for gambling outside the licensed system were being, or having been, self-excluded through Spelpaus.se, better winning chances on unlicensed sites, and demand for games not offered on the Swedish market.
Enforcement. Domain blocking, payment blocking, advertising enforcement against unlicensed brands, and action against affiliates promoting them. Switzerland's Gambling Act, for example, requires access to unauthorised online gambling offers to be blocked, using blocklists kept by the regulators. Without enforcement, everything above is a self-imposed handicap on the licensed sector.
Estimates of channelisation vary widely and are produced by parties with interests, so treat any single figure as a claim rather than a fact and ask who produced it and how. The methodology usually matters more than the number. Sweden shows the spread: for 2025, Spelinspektionen's player survey put channelisation of the competitive market at 89% and its internet-traffic estimate at 78%, and the regulator settled on 84%. The industry association BOS and the operator ATG publish their own measurements using similar methods, and the regulator notes that their different assumptions have a large effect on the results.
Licence structures you will encounter
Vertical-specific licences separate casino, sports betting, poker, bingo and lottery, each with its own application, fee and conditions. An operator wanting the full product set needs several. Great Britain, for example, has a remote operating licence for each type of gambling activity.
B2C and B2B licences. Most mature frameworks license the customer-facing operator and, separately, the suppliers of games, platform and critical services. B2B licensing has expanded significantly and is now the point at which several jurisdictions exert control over the supply chain. Great Britain issues a separate remote gambling software licence to businesses that manufacture, supply, install or adapt gambling software.
Concessions and tenders. A fixed number of licences awarded through a competitive process, often with a term, a minimum investment commitment and a substantial up-front payment. Entry is possible only in the award window, which may be years apart. Switzerland's Gambling Act, for example, has the Federal Council fix the number of casino concessions, which normally run for 20 years.
Monopoly and partnership models. A state operator or a small set of domestic incumbents, with foreign participation only as a supplier or joint-venture partner.
Land-based linkage. Some frameworks grant online licences only to holders of land-based licences, or to partners of them, which converts market entry into an acquisition or partnership question. Switzerland works this way: since 1 January 2019 its casinos have been able to offer online gambling through a licence extension granted by the Federal Council, plus a Federal Gaming Board permit for each game, and no one without a casino concession can offer casino games online.
Federal and state layering. Where gambling is regulated sub-nationally, each state or province is a separate market with its own licence, tax, product rules and timeline, and a national strategy is really a sequence of state strategies.
What a licence actually obliges you to do
A licence is not a permission slip; it is an ongoing relationship with continuing obligations, and underestimating the running cost is a common entry error.
Expect, in most mature frameworks: a local corporate entity or registered presence; named individuals approved for key roles, with personal suitability assessment; technical systems certified by an accredited testing house and, in several markets, connected to a regulator's own reporting infrastructure; segregation and protection of customer funds; local data hosting or mirroring in some markets; anti-money-laundering and responsible gambling frameworks meeting local rules rather than your existing ones; periodic reporting, frequently monthly; audit rights; and payment of fees and gaming duty on a local basis.
Each of those has a cost and a lead time. The certification alone has its own lead time, and it is per-game as well as per-platform in several markets: in Switzerland a casino must submit a certificate from an accredited conformity assessment body before it may run an online game, and hold a Federal Gaming Board permit for each game. Reporting links can be as demanding: Dutch licensees must record near real-time play data in a separate control database that the Kansspelautoriteit and other supervisors can access.
The go, wait or never framework
Reduced to its essentials, a market assessment answers one of three questions.
Go. The market is accessible, the economics work at the prevailing tax and cost structure, the timeline is tolerable, and the compliance burden is within the organisation's capacity.
Wait. The framework is being written, a tender window is expected, a tax rate is under review, or the current terms make the economics marginal. Waiting is an active position that requires monitoring, not an absence of decision.
Never, or not as we are. Entry requires a partner, an acquisition or a licence class the operator cannot obtain. This is a legitimate and underused conclusion, and reaching it early saves a great deal of money.
The remaining lessons build the analysis that produces one of those three answers: the legal position, the economics, the application, the technical and operational build, the launch, and the ongoing obligation that starts the day the licence is granted.