Offshore online gambling market costing Australians billions, according to report
Responsible Wagering Australia, which represents Bet365, PointsBet, and Betfair among others, has called for a crackdown on offshore betting as it was revealed that bettors lose AU$3.9 billion (US$2.5 billion)1 AUD = 0.6446 USD
2025-11-21Powered by CMG CurrenShift a year to illegal sites.
In a report commissioned by Responsible Wagering Australia, gambling consultancy H2 Gambling Capital found that Australia’s offshore betting market had more than doubled since 2019, with Australians set to lose out on as much as AU$5 billion (US$3.2 billion)1 AUD = 0.6446 USD
2025-11-21Powered by CMG CurrenShift by 2029.
Additionally, H2 argued that offshore gambling now accounts for 36% of all online betting in Australia.
The report noted that this could result in the loss of almost AU$800 million (US$516 million)1 AUD = 0.6446 USD
2025-11-21Powered by CMG CurrenShift in tax revenue and product fees to the sports and racing sectors over the next five years.
Speaking about the report’s findings, Responsible Wagering Australia Chief Executive Kai Cantwell said Australian consumers are the primary victims of illegal sites.
“Unlike licensed operators, who use data to identify and support at-risk customers, illegal sites use it to target vulnerable Australians and minors with high-risk offers and exaggerated bonuses,” he said.
The report highlights growing concerns over Australians bypassing onshore protections such as BetStop, suggesting that around half of offshore gamblers are registered on the self-exclusion system.
Better odds, bonuses, and access to banned products appear to be key drivers for Australians to access offshore sites.
Cantwell called for stronger national enforcement and coordination between stakeholders to prevent illegal sites from undermining consumer safety.
Earlier in the week, Australian lawmakers and gambling advocates also called upon the government to follow through with plans to ban gambling advertisements.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
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The Backstory
Why the offshore surge is under scrutiny
Australia’s growing offshore wagering problem is not unfolding in isolation. Across the region and in U.S. states, regulators and industry groups are wrestling with the same forces: faster digital adoption, cross-border access to gambling products, and policy gaps that push consumers to unregulated sites. The latest warning from an industry-backed report that Australians are losing billions to illegal platforms lands amid a wider debate over how to keep betting dollars — and consumer safeguards — onshore. The stakes are evident in tax leakage, weakened integrity controls, and pressure on lawmakers to choose between tighter enforcement and broader legalization.
Neighbor moves: New Zealand’s hard line
One of Australia’s closest neighbors is testing a more aggressive response. New Zealand amended its Racing Industry Act to block offshore operators from taking wagers from its residents, a ban that took effect on June 28. The move backs TAB New Zealand’s monopoly and its 25-year operating partnership with Entain. Authorities estimate that between NZ$180 million and NZ$200 million flows to offshore sites annually with little benefit to local sport and racing. Under the new framework, Entain is set to pay NZ$100 million to TAB New Zealand, with NZ$20 million earmarked for Sport NZ and the rest distributed to racing codes, reinforcing the policy goal of keeping value in the domestic ecosystem. Regulators have told operators to exit the market and expect compliant firms to do so. The country’s stance, detailed in New Zealand bans offshore sports betting, offers a contrasting model to Australia’s current settings by marrying enforcement with a locked-in revenue pathway for sports and racing.
U.S. lessons: legalization gaps create gray markets
The U.S. experience shows how policy deadlock can feed unregulated activity even when public appetite for betting is established. In Oklahoma, a Senate panel heard that the absence of legal sports wagering is costing the state millions as residents turn to neighboring jurisdictions and illegal operators. “Sports betting is happening now in Oklahoma” came the message from industry advocates, who argued that formal markets deliver transparency and tax receipts that shadow channels do not. The stalemate hinges on tribal compacts that grant exclusive gaming rights, leaving officials to weigh potential damages if terms are disturbed. The debate, outlined in Legislative gridlock on sports betting is costing Oklahoma millions, mirrors a core dilemma facing Australia: policy drift can allow offshore bookmakers to grow market share, undermining licensed operators and consumer protections.
Illinois, by contrast, shows how persistent legislative pushes can keep digital gambling on the agenda even with entrenched opposition. Lawmakers in Springfield have floated online casino bills alongside sports betting, with supporters arguing that igaming could expand the tax base while critics warn it could cannibalize revenue from casinos and venues reliant on video gaming terminals. As reported in Illinois igaming still a possibility according to one state lawmaker, backers say late-session compromises remain possible. For Australia, the takeaway is that calibrated legalization paired with strong guardrails can shift consumers to regulated channels, but coalition building with retail stakeholders is often the price of passage.
Behavioral risk: bans do not stop access
Enforcement alone rarely seals off the market. In Mississippi, where mobile sports betting remains illegal except on casino property, a University of Mississippi survey found that nearly 60% of college students who gambled in the prior year reported placing online bets with “legal” sportsbooks anyway. Respondents described using tools like virtual private networks to skirt restrictions or asking friends and family to place wagers. The study, summarized in Mississippi students bet online despite ban, according to study, estimated that up to 6% of student bettors met the criteria for problem gambling, with 10% at moderate risk, underscoring the public health dimensions of digital access. For Australia, where offshore sites dangle better odds, bonuses, and products banned at home, the Mississippi findings reinforce a pattern: determined consumers will find workarounds, which can erode the effect of advertising restrictions or self-exclusion tools when the alternative is a click away.
Integrity and safety: sport under pressure
Sports bodies have responded by tightening data controls and discouraging risky bet types. The NCAA says social media abuse tied to sports betting during this year’s March Madness fell even as overall abuse fluctuated across men’s and women’s tournaments. The organization credited surveillance partnerships and its ban on high-risk prop bets after extending a data deal with Genius Sports. The snapshot, in March Madness sports betting abuse down 23%, according to NCAA, highlights how leagues are trying to insulate athletes from the sharpest edges of wagering culture. That track mirrors Australian concerns that offshore sites exploit data to target vulnerable customers while evading responsible gambling duties. When bettors migrate offshore, regulators lose visibility into patterns that help flag harm, and leagues lose footing to enforce integrity safeguards that depend on trusted data flows.
What comes next for Australia
The policy options arrayed abroad sketch a spectrum. New Zealand’s outright ban on offshore operators, backed by a single regulated outlet and earmarked payments to sport and racing, is a clean assertion of control. U.S. states offer iterative models, where legalization, tax design, and product limits evolve to bring players onshore while funding enforcement and treatment. Evidence from Mississippi warns that prohibition without practical barriers leaves ample room for evasion, especially among digital natives. Meanwhile, governance around sport integrity is shifting toward data-centric interventions that require cooperation from licensed books.
For Australia, the immediate pressure points are enforcement, harmonization, and incentives. Stronger national coordination could tighten site blocking and payment interdiction against illegal operators. Targeted advertising curbs may reduce exposure to high-risk offers, but without accessible regulated alternatives, bettors may keep crossing borders online. Aligning consumer protections — from self-exclusion tools that work across markets to standardized affordability checks — could raise the cost of going offshore while preserving choice onshore. And as New Zealand’s model shows, tying revenues directly to sport and racing may help build the political coalition needed for tougher measures.
The trajectory is clear. Where policy signals are coherent and consistent, consumers and capital follow. Where gaps persist, offshore sites fill the vacuum. The bill for Australia, measured in lost taxes and weakened safeguards, will keep rising until the incentives point decisively toward regulated play.
