Australia is confronting a steep expansion of unlicensed offshore gambling, with new data showing that unregulated websites are drawing billions of dollars away from the licensed sector.
The analysis, conducted by H2 Gambling Capital for industry association Responsible Wagering Australia (RWA), estimates annual offshore losses at A$3.9bn and forecasts that the figure will approach A$5bn before the end of the decade.
According to the research, offshore operators now account for 36% of all online gambling undertaken by Australians.
That shift carries major fiscal consequences, as governments are projected to forfeit almost $2bn in tax revenue over the next five years.
Meanwhile, sporting bodies and racing codes face their own financial pressures, with product fee shortfalls expected to total roughly A$800m across the same period.
RWA said the growing reliance on offshore platforms leaves individuals exposed to risks that the regulated system is designed to prevent.
Australian-licensed operators must comply with strict requirements around customer verification, behavioural monitoring, and harm-prevention tools.
None of those guarantees apply when consumers use websites that operate outside regulatory oversight.
RWA CEO Kai Cantwell said the environment surrounding illegal offshore providers differs sharply from the legal framework that applies domestically.
He noted that many of these sites operate from jurisdictions that offer minimal scrutiny, creating conditions where customers can lose access to their funds without meaningful avenues for remedy.
Cantwell said this lack of accountability undermines the protections Australian regulators have built over many years.
The study also highlighted challenges linked to BetStop, Australia’s national self-exclusion register which was launched three years ago.
Researchers found that half of the Australians who wagered on offshore sites were listed on BetStop at the time.
This demonstrates that self-excluded individuals can still access gambling products outside the country’s regulatory perimeter.
Cantwell said this gap reduces the effectiveness of one of Australia’s key harm-minimisation measures and shows how easily offshore channels can be reached.
RWA also pointed to commercial disparities that enable illegal platforms to draw in customers.
Without tax obligations, integrity requirements or contributions to safer gambling initiatives, offshore operators can offer incentives that licensed companies cannot legally match.
These include high-value bonuses and elevated odds, as well as access to online casino games and live in-play wagering. Survey responses indicated that these offerings are significant drivers of offshore gambling participation.
The research further notes that illegal operators rely heavily on influencer marketing and affiliate promotions to create an impression of legitimacy.
Nearly half of surveyed users said they struggled to distinguish between legal and illegal websites, a nuance that offshore promoters exploit to attract new customers.
RWA said these tactics contrast with the data-driven safeguards used by licensed operators to detect and support individuals showing signs of risky behaviour.
Regulators continue to block illegal domains, but the Australian Communications and Media Authority has acknowledged limitations in its enforcement toolkit.
RWA said a broader, multi-industry response involving regulators, financial institutions, digital platforms and sporting partners is needed to disrupt offshore networks and reduce the harms linked to unregulated gambling.
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