Frank Schuengel, eGaming Licencing Specialist at Manavia Limited, highlighted the global shift away from grey markets in the iGaming sector. “These days, more and more countries are introducing their own licences,” Schuengel said, attributing this trend to governments realising the financial benefits of regulation.
In his speech at the ASEAN Gaming Summit in Manila, Philippines, Schuengel said that while some nations have successfully implemented effective regulatory frameworks, others have struggled. Schuengel praised the Philippines’ balanced approach, describing it as a “good example to follow for other Asian nations and certainly other nations around the world.”
Schuengel warned that poorly designed regulations risk driving operators and players into unregulated markets. He cited Colombia’s proposed 18 percent Value Added Tax (VAT) on deposits as an example of a measure that could push consumers towards grey market operators.
“Most operators are happy to play by the rules,” Schuengel explained, adding that “nobody wants to be in the shadows” if compliant business practices are viable. He emphasised that governments must strike a balance: “If we can’t make money, we can’t be compliant.”
Schuengel noted a shift in enforcement tactics, with authorities increasingly targeting suppliers rather than relying on ineffective URL blocking. “In the olden days, they’d block your URL, which is, of course, utterly pointless,” he said, recalling how South Korea and Australian regulators would celebrate blocking websites even as new ones rapidly emerged.
Instead, regulators are now putting pressure on suppliers to avoid working with unlicensed operators. “Suppliers think twice if they want to lose a legal market for continuing to supply operators that shouldn’t be there,” Schuengel said.
The iGaming industry faces heightened media scrutiny, which Schuengel welcomed as a positive development. “It’s a good thing because it calls out bad players,” Schuengel remarked.
He warned that operating in unregulated markets is becoming increasingly risky and expensive. “There are still operators targeting the Philippines when they shouldn’t,” he said, noting that this type of activity will likely decline as regulations tighten.
Meanwhile, Schuengel observed that while the B2C grey market is shrinking, the B2B sector is thriving. He highlighted the growing demand for B2B licences, such as those offered in the Isle of Man, which provide legitimacy and reassure clients that software suppliers are compliant. “B2B areas are definitely growing. The B2C grey market is dying,” he added.
Schuengel also identified some emerging licencing hubs, particularly in regions filling voids left by stricter regulations. He pointed to Anjouan, an autonomous island in the Indian Ocean, as a rising jurisdiction with minimal requirements and affordable licencing fees. Although some question Anjouan’s status as a legitimate jurisdiction, Schuengel observed that many game providers and banks now accept its licences. “Many lawyers agree that it has sufficient legal certainty that a real country would have,” he added.
As the iGaming industry evolves, Schuengel stressed that compliance and finding the right regulatory environment will be key for operators seeking long-term success.
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