The recent study from the International Betting Integrity Association (IBIA), titled “The Availability of Sports Betting Products: An Economic and Integrity Analysis,” carried out by H2 Gambling Capital and in association with entities in Brazil, Canada, Australia, and the Netherlands, delves into an issue central to the global betting industry. Utilizing data from 12 jurisdictions where sports betting is regulated, the report evaluates the impact of different regulatory approaches—restrictive vs. liberal—on consumer protection, sports integrity, effective regulatory oversight, and the generation of tax revenues.
The correlation discovered by the research is compelling: a liberal sports betting market significantly increases the rate of channelisation—the percentage of wagers placed with legally regulated operators. Markets that provide a multitude of betting products steer consumers away from black markets, thereby fostering a legally compliant betting environment.
“For too long there has been speculation about the effects of betting restrictions on consumers,” comments Khalid Ali, IBIA’s Chief Executive. “This study provides concrete evidence that strict regulations do not deter betting; they simply push bettors towards unregulated sectors.”
Enhancing this perspective, David Henwood of H2 notes, “Offshore sites often lure customers with their expansive offerings that surpass what’s available legally. The data underscores this truth, challenging the mistaken belief that more regulation equals less illicit betting.”
The global sports betting market is substantial, projected to be valued at a total of $94 billion in gross win for the current year, and is expected to rise to $132 billion by 2028. A striking $93 billion of that figure is anticipated to originate from online bets.
Evidence from the IBIA study reveals that markets with fewer restrictions, such as Great Britain with a channelisation rate of 97%, and Italy at 93%, far outpace those with more stringent control, like Australia and Germany, which fall behind with rates of 75% and 60%, respectively.
This contrast becomes particularly stark when examining the recent policy shift in Ontario, Canada. Having introduced an online sports betting licensing system, Ontario incurred a channelisation rate of 69% in 2022 and is expected to skyrocket to 92% by 2024. This is a sharp contrast to the rest of Canada where predictions suggest as much as $2 billion in sports betting gross gaming revenue could remain untaxed between 2024 and 2028 due to offshore betting.
The IBIA investigation anticipates that various countries could benefit financially from liberalization. Australia could see an uplift in tax revenues of $1 billion over five years if it fully legalized in-play online betting. Germany could gain an additional $400 million in tax revenues, and the Netherlands could enjoy a $118 million increase if it expanded access to secondary football betting markets.
Brazil, a nation with a deep affinity for football—which accounts for over 85% of its betting gross win—is on the cusp of realizing this potential. Having legalised sports betting, it stands to benefit substantially from a liberal market encompassing a wide spectrum of betting products. Conversely, the failure to offer such liberty could push an estimated $18 billion annually towards offshore operators, resulting in $1 billion in lost tax revenue from 2025 to 2028.
On a more granular level, football betting’s global dominance, responsible for 56% of the regulated market’s gross win, underscores the importance of product availability within sports betting. The study indicates that areas with limited football betting options, like Portugal and Germany, lag significantly in channelisation rates compared to Italy. Tennis betting also holds substantial weight, especially in Europe. However, some jurisdictions have banned ITF Tour betting over concerns of integrity, a move that the IBIA suggests may impede channelisation.
The insights from the report are not only academic but carry real implications for policy-makers worldwide, illustrating that liberalizing betting markets may pave the way for enhanced economic benefits and bolstered integrity within the sports and betting ecosystems.
