From domain blocking to financial control - how digital infrastructure is reshaping the balance of power in the gambling market

Combating the illegal gambling sector has become one of the key priorities for all developed countries where gambling is legal. Regulatory measures typically focus on technical solutions such as blocking illegal websites and platforms, prohibiting unlawful advertising and strengthening player protection requirements. However, despite these efforts, illegal operators continue to function and thrive. As a result, regulatory initiatives are increasingly shifting toward monitoring and restricting financial flows, which constitute the primary lifeline sustaining illegal gambling activities.

The experience with illegal gambling platforms has provided a valuable lesson for the entire country: traditional approaches to combating illegal gambling have proven ineffective against modern technologies designed to circumvent restrictions. While proactive domain blocking demonstrates the state's firm position, in practice it has proven to be a short-term measure with limited impact. Blocked domains are replaced within days, and the same illegal operators quickly resume attracting players through mirror networks, offshore infrastructure, VPN services, and public DNS systems. Formally, the number of websites may decrease, but for the player very little changes, the illegal product remains accessible within a few clicks, while aggressive advertising continues to encourage participation. As a result, the state expends resources on localized and short-lived victories that fail to address the issue systematically.

This is why shifting the focus toward digital infrastructure aimed at monitoring financial flows is not merely a matter of regulatory rhetoric but a necessary evolution of public policy. The key metric is no longer the number of blocked domains, but rather the ability to oversee and control business processes associated with gambling activities. The state's role is evolving from a reactive approach of continually "pulling weeds" to a proactive strategy that establishes effective mechanisms for restricting the shadow market by cutting off its financial lifelines.

The implementation of an online monitoring system, the recording of every wager, payout, and refund, as well as granting tax authorities access to primary transactional data, provides the government with the ability to observe the market in its entirety. These mechanisms address not only the symptoms but also the root causes of the problem: if a transaction does not pass through a regulated channel, it is considered illegal and should therefore be subject to blocking.

Under a model where the financial flows of illegal operators are effectively controlled, mirror websites lose their strategic value. If a mirror site redirects a player to a platform where funds cannot be deposited or withdrawn, the very essence of gambling on that platform is eliminated. This, in turn, leads to an immediate loss of advertising profitability for such operators and a rapid decline in user traffic.

Offshore financial instruments can also be monitored and restricted. Offshore infrastructure enables operators to avoid local regulation only when it retains access to payment channels within a given jurisdiction. It is precisely these payment channels that should become the focus of government oversight.

As a result, businesses that are not integrated into the monitoring system and do not operate transparently face a clear choice: either rely on increasingly risky and expensive methods of servicing customers which raise the cost of participation for players and erode the illegal sector's primary competitive advantage over licensed operators, or exit the market altogether.

This creates the foundation for a more mature and transparent gambling market. Operators wishing to conduct business legally are provided with clear rules of engagement: transparent reporting, transaction monitoring, and robust player protection requirements. For players, this means greater security, reduced fraud, reliable payouts, and access to regulatory recourse. For the state, it translates into increased budget revenues and reduced social risks associated with unregulated gambling activities.

Nevertheless, meaningful change will not occur automatically. Effective digital infrastructure requires not only technological solutions but also a comprehensive policy framework. Legislative amendments, strong interagency coordination, close cooperation with financial institutions, international information-sharing regarding sanctioned networks, and effective enforcement mechanisms are all essential components. Preventive measures including restrictions on gambling advertising and public awareness campaigns about gambling-related risks will also remain critically important.