Gambling Monopolies vs Open Markets: Which Model Works Better?

Few debates divide gambling regulators more than the question of whether governments should operate gambling themselves or allow private companies to compete under licence. Both systems have been successful in different parts of the world, yet each comes with its own advantages and challenges.

Supporters of state monopolies argue that gambling should not become a highly competitive commercial industry. Instead, they believe governments can better protect consumers by limiting advertising, controlling the number of available products, and directing profits towards public services rather than private shareholders. 

Countries such as Finland and Norway have traditionally followed this approach. For decades, gambling profits have helped fund sports clubs, cultural programmes, scientific research, healthcare initiatives, and charitable organisations. In Norway, Norsk Tipping transferred more than NOK 7 billion to socially beneficial causes in recent years, illustrating how gambling revenue can be reinvested into society.

However, monopolies face growing challenges in the digital era. Today's players can access thousands of international gambling websites within minutes, making it difficult for a single state operator to satisfy every consumer preference. If the regulated market offers limited games, slower innovation, or less competitive promotions, some players simply migrate to offshore platforms.

Open Commercial Markets: Key Takeaways

Open commercial markets take a different approach. Rather than limiting gambling to one operator, governments issue licences to multiple companies that meet strict regulatory standards. Countries such as Georgia, Spain, Denmark, and the Canadian province of Ontario have embraced competition while maintaining strong oversight through licensing, taxation, anti-money laundering rules, and responsible gambling requirements.

Competition often produces clear benefits for players. Operators invest heavily in better mobile apps, faster withdrawals, larger game libraries, improved customer support, and responsible gambling tools. Governments also benefit from licence fees, corporate taxes, and increased investment. Ontario provides a striking example. Just two years after launching its regulated online gambling market, the province recorded more than CAD 82 billion in wagers and over CAD 3 billion in gross gaming revenue during the next fiscal years, making it one of the fastest-growing regulated markets in North America.

Why Channelisation Matters More Than Strict Laws

When regulators evaluate whether gambling laws are working, they rarely begin by asking how many licences have been issued or how much tax revenue has been collected. Instead, one of the first figures they examine is channelisation. Put simply, it shows whether players are choosing the regulated market that governments have worked to create.

A high channelisation rate usually indicates that licensed operators offer competitive products while providing the safeguards regulators expect, such as identity verification, responsible gambling tools, secure payment processing, and consumer protection. A low channelisation rate suggests that many players are bypassing domestic regulations altogether in favour of offshore platforms.

Many European regulators aim for channelisation rates of at least 90%, believing this level provides meaningful consumer protection without eliminating competition. Denmark is frequently cited as one of the strongest performers, with channelisation exceeding 90% across most regulated gambling products. Sweden initially achieved similarly high levels after opening its licensed online market in 2019, although regulators have since reported lower rates for online casino gambling, helping to explain recent proposals for stronger enforcement against unlicensed operators.

Channelisation has become increasingly important because it measures regulatory effectiveness rather than regulatory ambition. A country may have extremely strict gambling laws, but if a significant share of players continues using offshore websites, the intended consumer protections become largely ineffective. Conversely, a well-designed licensing system with strong player safeguards may achieve higher channelisation by giving consumers little reason to look elsewhere.

Finland: When a Monopoly No Longer Fits the Digital Age

Finland spent decades operating one of Europe’s best-known gambling monopolies through Veikkaus. The model was designed to limit commercial pressure, reduce gambling harm, and direct profits towards public causes. For land-based gambling and lotteries, this approach worked for many years.

Online gambling changed the calculation. Finnish players could easily access international sites with larger game libraries, stronger bonuses, and more payment options. As a result, offshore activity grew, and policymakers became concerned that the monopoly was no longer keeping enough players inside the supervised system.

The Finnish government has now decided to replace the monopoly for online betting and online casino games with a licensing system. Parliament adopted the new Gambling Act in December 2025, and the competitive market is scheduled to launch on 1 July 2027. Veikkaus will still keep exclusive rights over lotteries, scratch cards, and many land-based products, but online gambling will move to licensed competition.

Finland’s case shows that a model can be well-intentioned and still become outdated. The goal is not deregulation, but better channelisation: bringing players back from offshore sites into a market where regulators can actually protect them.

The Netherlands: When Liberalisation Moves Too Fast

The Netherlands opened its regulated online gambling market on 1 October 2021. The aim was to replace offshore play with licensed platforms and create a safer, taxable market. In that sense, the reform was initially successful. Dozens of operators entered the market, and Dutch players gained access to legal online betting and casino products.

The problem was visibility. After launch, gambling advertising increased sharply. By September 2022, 22 companies had received licences, and more than €200 million had reportedly been spent on online gambling advertising since legalisation began. Public criticism followed, especially over exposure among young adults and vulnerable groups.

The government responded with tighter rules. Untargeted online gambling advertising was banned from 1 July 2023, including TV, radio, and public-space advertising. Sports sponsorships were given a transition period, with the full ban taking effect from 1 July 2025. The Dutch case shows that opening a market is not the final step. Regulation must continue after launch, especially when operators compete aggressively for attention.

Italy: Can Advertising Bans Backfire?

Italy is one of Europe’s most interesting examples because it has a large regulated gambling market but one of the strictest advertising regimes. The 2018 Dignity Decree introduced a broad ban on gambling advertising and sponsorships. The goal was to reduce gambling harm and limit exposure to betting promotions.

The policy had clear social intentions, but it also created debate. Critics argue that when licensed operators cannot advertise, players may find it harder to distinguish legal brands from illegal ones. This can weaken channelisation, especially online, where unlicensed sites can still reach players through social media, foreign websites, affiliates, and search traffic. At the same time, Italian football and sports organisations lost a major sponsorship category that had previously brought significant funding into the sector.

Italy’s experience does not prove that advertising bans are always wrong. It does show that every protective measure has trade-offs. If legal operators become less visible than illegal ones, a rule designed to protect players may unintentionally make the market harder to supervise.

The Rise of Player Protection

One of the biggest changes in gambling regulation over the past decade has been a shift in priorities. Governments are no longer focused solely on deciding whether gambling should be legal or illegal. Instead, they are asking how to make gambling safer for the millions of people who already participate each year. As a result, regulators have introduced a range of tools designed to reduce gambling-related harm without preventing responsible adults from enjoying gambling as entertainment.

One of the most common measures is self-exclusion. Players can voluntarily block themselves from licensed gambling websites for a chosen period, making it impossible to open new accounts or place bets. Sweden's national Spelpaus system is one of the best-known examples. Since its launch in 2019, more than 120,000 people have registered for self-exclusion, illustrating how widely these tools are being used.

Deposit limits have also become increasingly common. Germany introduced a default monthly cross-operator deposit limit of €1,000 for most licensed online gambling products, although higher limits may be available following additional affordability checks. Similar systems have since appeared in several other regulated markets.

Artificial intelligence is also changing how operators identify risky gambling behaviour. Licensed companies increasingly analyse playing patterns in real time, looking for indicators such as unusually long sessions, rapidly increasing deposits, repeated cancelled withdrawals, or significant changes in betting behaviour. When these patterns are detected, operators may contact the player, recommend responsible gambling tools, or temporarily restrict account activity.

Advertising has become another major focus. Countries including Belgium, Italy, Spain, and the Netherlands have all introduced tighter restrictions on gambling marketing during the past decade. While the exact rules differ, the overall objective is similar: reduce exposure among minors and vulnerable individuals while allowing licensed operators to continue advertising responsibly.

Together, these measures demonstrate that modern gambling regulation is becoming increasingly proactive.

Technology Is Rewriting the Rulebook

Technology has also been actively reshaping gambling.

Twenty years ago, most gambling took place in betting shops, lottery retailers, or land-based casinos. Today, smartphones have become the primary gambling device for millions of players worldwide. Industry research estimates that well over half of all online gambling revenue now comes from mobile devices, with many operators reporting that mobile users account for more than 70% of website traffic.

The growth of digital payments has created new regulatory challenges. Instant bank transfers, digital wallets, and cryptocurrencies allow players to move money internationally within seconds. While these technologies improve convenience, they also require stronger anti-money laundering controls, identity verification, and transaction monitoring.

Cybersecurity has become equally important. Licensed operators now invest millions of dollars annually in encryption, fraud prevention, and data protection to comply with increasingly demanding regulatory standards. As cyber threats continue evolving, governments regularly update technical requirements that operators must meet before receiving or renewing a licence.

Is There a Perfect Gambling Model?

Countries continue adjusting their gambling laws as technology evolves, consumer expectations change, and new evidence becomes available. Brazil recently introduced comprehensive online gambling regulation after decades of uncertainty, while Germany continues refining its licensing framework as regulators gain more experience with the digital market. Even mature jurisdictions such as Sweden and the Netherlands regularly update advertising rules, consumer protection measures, and financial monitoring requirements.

Perhaps the biggest lesson is that gambling regulation is no longer static. Successful markets are those willing to adapt. Governments that monitor industry trends, respond to technological change, and strengthen player protection are generally better equipped to balance economic opportunities with social responsibility.

Whether a country permits one operator or one hundred, the same objective remains: creating a gambling environment that is transparent, secure, and fair for consumers while limiting opportunities for illegal operators to thrive. As online gambling continues expanding across the world, flexibility (not ideology) is likely to become the defining feature of successful regulation.