Facts on regulation
Redefining “Reasonable”: How iGaming Operators Are Rewriting Strategy Under Europe’s New Rules
From new Dutch renewal tests and UK platform changes to Italy’s costly concessions and AI‑enabled monitoring, iGaming operators are redesigning compliance strategies—staying onshore where it pays, and redirecting growth to more attractive regulated markets.
Intro
Redefining “reasonable measures” is no longer an abstract regulatory project. Since 2020, successive AML packages, responsible‑gambling reforms, and licensing updates across Europe have turned it into a hard operating constraint: new licensing tests, tighter AML and safer‑gambling duties, and more intrusive supervision now dictate which markets remain viable, how platforms are built, and how brands position themselves against a still‑powerful offshore sector. The operator response combines portfolio reshaping, investment in compliance and regtech, and more assertive lobbying over what “reasonable” should mean in practice, with some groups doubling down on core European markets and others quietly redirecting new growth to regimes with more straightforward rules and more predictable economics.
Compliance is now a core part of iGaming strategy—not just a box to tick.
Examples from Italy, the UK and the Netherlands – three regulated markets redefining what “reasonable measures” mean for iGaming operators.
New rules, new operating strategies
In the Netherlands, the Kansspelautoriteit (KSA) has tightened its online licensing framework ahead of the first five‑year renewal wave in 2026. Rules adopted in September 2025 and due to apply from 1 January 2026 require every applicant for a new or renewed remote licence to submit a detailed exit plan, explaining how Dutch operations would be wound down if authorisation is revoked or not extended, including treatment of player balances, data, and marketing. Operators must also provide a comprehensive AML risk assessment under the WWFT and show they have complied with previous court rulings; the KSA has underlined that the original five‑year term was chosen so behaviour in the first licence period can feed directly into renewal decisions.
In Great Britain, the 2023 white paper High stakes: gambling reform for the digital age and subsequent Gambling Commission measures are reshaping online business models. New online slot stake limits, stricter game design and information rules, and stronger expectations around affordability and data‑driven risk management are being phased in from 2024, on top of existing licence conditions and AML guidance. Several groups have responded by consolidating multiple UK‑facing brands onto shared technology platforms, centralising KYC/AML modules and player‑risk engines so that a single compliant stack can serve several licences. Sub‑scale brands and high‑risk VIP programmes have been closed or sold, as operators prepare for gambling‑duty changes from 2026, which are expected to further compress margins and increase the value of efficient, centralised compliance.
Italy’s reform of its online concessions shows how licence economics can act as a filter. New nine‑year licences come with substantially higher upfront fees and increased GGR tax rates, alongside detailed technical and local‑presence obligations. Legal and commercial commentary suggests this structure favours larger, technologically advanced operators that can absorb higher fixed compliance and tax costs, while making it harder for smaller firms to justify their own concessions and nudging some towards B2B or affiliate roles instead.
The true cost of “reasonable measures” sits in licences, systems and people—not just in headline fees.
The layered cost of “reasonable measures”
Behind these changes lies a thicker cost base with three main layers: licensing and legal, technology and people.
On the licensing side, headline fees are only the starting point. Operators must fund corporate structuring, legal advice on evolving rules, periodic audits, and mandatory contributions or levies in each jurisdiction. In Malta, for example, industry estimates suggest that the true annual cost for an established operator can be several times higher than the published licence fee once regulatory contributions, compliance salaries, and ongoing obligations are included, far above the headline number that often attracts newcomers. Comparable Tier‑1 licences elsewhere show the same pattern: once legal, audit, and required local services are added, the all‑in cost of a serious onshore presence is a multiple of the advertised fee.
Technology is the second major layer. Post‑2020 expectations across the EU and UK now routinely include robust KYC and identity verification, transaction‑monitoring systems for AML and fraud, centralised safer‑gambling platforms, and jurisdiction‑specific reporting interfaces to regulators. Each additional market adds integration work with local payment providers and data‑protection constraints; compliance has become a continuous engineering project, with teams adapting log formats, APIs and risk models as regulators refine what they consider acceptable evidence and oversight.
The third layer is people and know‑how. Skilled compliance professionals—money‑laundering reporting officers, responsible‑gambling leads, data‑protection officers—command premium salaries, particularly in tightly regulated jurisdictions such as the UK, Netherlands and Sweden. Global AML and responsible‑gaming guidance now requires staff to understand European AML directives and national transpositions, sanctions regimes, emerging transaction‑monitoring typologies, and cross‑border information‑sharing, which necessitates continuous in‑house and external training. Operators are expected to provide induction training, regular refreshers, and continuing professional development for key roles; supervisors in several markets examine training records and organisational charts when assessing whether “reasonable measures” are in place.
The result is that, in many European operations, the share of operating expenses devoted to compliance—licences, systems, staff and training—has increased materially since 2020, even as the regulated online market continues to grow in absolute terms.
AI is playing an increasingly central role in multi‑market compliance and responsible‑gambling monitoring
Turning obligations into workflows: AI and regtech
To cope with complex, multi‑jurisdictional expectations without unlimited headcount, operators are increasingly turning to AI‑driven tools and outsourced infrastructure—some built in‑house, others provided by specialist B2B vendors. Several tier‑one groups have developed behavioural‑risk engines and case‑management systems that apply machine‑learning models to player data, flagging outliers, prioritising cases and standardising documentation across markets.
Alongside these internal systems sits a growing ecosystem of external solutions. Vendors now offer behavioural‑monitoring and scoring tools, AI‑enabled responsible‑gambling contact systems, and turnkey platforms that bundle KYC/AML modules, configurable limits and case‑management workflows. These give operators ways to keep pace with divergent regulatory expectations without building every component themselves. As supervisors become accustomed to near‑real‑time analytics, resilient infrastructure and automated documentation—whether developed internally or bought in—purely manual, reactive approaches to risk look progressively less defensible
Channelisation paradox and offshore reach
Even as regulated operators spend more on compliance and technology, recent data underline the scale of the offshore and unlicensed market. A 2024 study for the European Casino Association by Yield Sec estimates that unlicensed operators captured roughly 71% of online gambling gross gaming yield across the EU‑27—about €80.6bn out of an estimated €114.3bn market—leaving 29% to licensed brands. The same work suggests that around 92% of gambling‑related digital content seen by EU consumers was linked to unlicensed operators, and that roughly 81 million Europeans engaged with illegal services in 2024.
Academic research on channelling and taxation shows that average channelisation into regulated markets increased markedly between 2015 and 2021 and finds no simple, linear relationship between higher tax and lower channelisation at the European level. But it also highlights that specific combinations of high tax, restrictive product rules and advertising limits can depress onshore capture for some verticals, notably online casino, and that national outcomes vary widely.
Sweden illustrates the policy struggle. The Gambling Authority estimates that online channelisation has plateaued in the mid‑80s in percentage terms, below the government’s 90% target, while trade‑body figures suggest that a significant slice of play still occurs outside the licensed system. State‑linked incumbents ATG and Svenska Spel describe unlicensed gambling as a “breeding ground for money laundering” and back measures such as DNS and IP blocking, and a shift from a “directional” to a participant‑based test, so that any site accessible to Swedish players falls under domestic law.
The 2025 Isgren inquiry proposes criminalising almost all unlicensed provision and promotion and extending liability to payment providers via a presumption that Swedish residents are involved unless proven otherwise.
BOS, the Swedish Trade Association for Online Gambling, representing private online operators, has challenged proposals such as a total bonus ban, arguing they would entrench incumbents, weaken player protection by pushing customers offshore, and fail to address “the elephant in the room”: low channelisation.
Licences, markets and compliance have become core strategic pieces in the iGaming boardroom.
Financial and strategic consequences
Tighter rules, higher fixed costs and persistent offshore competition are having tangible financial effects. Recent tax and fee measures—Italy’s more expensive online concessions, the Netherlands’ higher gambling tax, Nigeria’s new remote‑operator duties and Great Britain’s duty changes scheduled from 2026—have all increased the fiscal burden on licensed operators. Combined with higher spending on legal support, technical systems and specialist staff, this is squeezing margins, particularly in low‑margin verticals such as sports betting and in smaller markets where fixed costs are spread over limited revenue. In the Netherlands, new licence‑renewal rules explicitly link AML risk assessments, documentation and past enforcement history to continued access to the remote market. At the same time, the debate over “Bill 55” in Malta has added uncertainty to legal‑risk calculations for cross‑border operations.
Strategically, many operators now treat licences as portfolio assets. In some jurisdictions, they double down: consolidating brands, investing in AI‑enabled compliance, and actively engaging in consultations to defend and refine their operating environment. In others, they limit exposure, pivot to B2B supply roles or direct new investment to jurisdictions such as Brazil, Mexico, Colombia and Peru, where recently introduced or updated licensing frameworks combine KYC and responsible‑gambling duties with tax and product conditions that are widely seen as more predictable or competitive than in some mature European states. These newer regimes are not regulation‑light—most embed AML and player‑protection rules from the outset, often drawing explicitly on European precedents—but for incremental capital, the perceived balance between risk, compliance cost, and growth potential can still look more favourable.
Associations, negotiation and what “reasonable” means next
Industry associations have become central to the negotiation over “reasonable measures”. In Sweden, Svenska Spel and ATG argue that stricter rules—including a total bonus ban and DNS blocking—are needed to protect consumers and sustain trust in the licensing system, while BOS, the Swedish Trade Association for Online Gambling, maintains that such measures would undermine competition and worsen channelisation.
Across Europe, EGBA draws on channelisation and offshore‑market data to argue for proportionate, evidence‑based regulation that keeps licensed offers attractive as a key tool against illegal operators. In parallel, operators and suppliers present AI‑driven monitoring and richer data‑sharing as reasons to adopt more targeted, risk‑based approaches in place of blunt stake, bonus or advertising bans.
The emerging equilibrium is unstable but recognisable. Regulators continue to tighten expectations in response to political and public‑health pressures; operators respond by reallocating capital, investing in compliance architectures and pushing back where they see overreach.
For operators, the lesson of 2020–2025 is that compliance is now a central strategic variable: a layered cost base, a domain of technological differentiation and a key part of the negotiation over how much of Europe’s online gambling will be both regulated and truly onshore. For regulators, the challenge is to keep tightening standards where evidence demands it without hollowing out the licensed market in favour of the offshore operators “reasonable measures” were meant to contain.
Further reading & Key Sources
SIGMA – Illegal gambling turnover exceeded €80 billion in 2024 https://sigma.world/news/illegal-gambling-turnover-exceeded-e80-billion-in-2024/
High stakes: gambling reform for the digital age (UK Government, 2023) –
https://www.gov.uk/government/publications/high-stakes-gambling-reform-for-the-digital-age/
Channelling and taxation in European online gambling markets (2025) – https://pmc.ncbi.nlm.nih.gov/articles/PMC11699665/
EXPLORE ARTICLE SERIES
Redefining Reasonable: Regulatory Transformation in Global iGaming
Article 3 of 4 in a series exploring ”European gambling regualtion in focus”: Redefining “Reasonable Measures”: How iGaming Operators Are Rewriting Strategy Under Europe’s New Rules
From new Dutch renewal tests and UK platform changes to Italy’s costly concessions and AI‑enabled monitoring, iGaming operators are redesigning compliance strategies—staying onshore where it pays, and redirecting growth to more attractive regulated markets.
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Redefining Reasonable: Regulatory Transformation in Global iGaming – a four part series
